Karnataka waives crop loan up to Rs 50000 per farmer

Making an announcement at the Legislative Assembly this afternoon, Chief Minister Siddharamaiah said that the State will waive off loans up to Rs. 50,000 taken by farmers from all Co-operative, Agricultural and other Co-operative Banks.

The move announced in the state Assembly will help about 22,27,506 farmers who have obtained loans from cooperative banks. Many other states charge for electricity from farmers, whereas in Karnataka, the government pays on behalf of the farmers.

A source close to a cooperative bank said short term political considerations are trumping sound economic dense.

The Chief Minister further reiterated that the order to implement the decision would be issued in a day or two and this would make Karnataka the first to implement it, though BJP-ruled Uttar Pradesh and Maharashtra, and Congress-ruled Punjab had announced similar farm loan waivers.

Opposition BJP and JD (S) are seemingly anxious as they feel denial of loan waiver was the biggest weapon they had with them against the Congress government in the next elections. It is expected that the loan waiver scheme will benefit more than 22 lakh farmers in the state of Karnataka.

The move comes amid the Siddaramaiah-led Congress government facing enormous pressure to dole out loan waivers to farmers after Uttar Pradesh, Maharashtra and Punjab made similar announcements.

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But he had put the onus on the NDA government at the Centre, saying it had to take the initiative to waive loans borrowed from nationalised and grameen banks which came under its ambit. Congress attacked the government and said that it is not serious about resolving the hardships of farmers. "We also give farmers incentives on milk production", he said.

Following pressure from farmer groups, the state government on Tuesday chose to revise the criteria under which the Rs 10,000 loan advance will be given to prepare for the upcoming agricultural season.

After the announcement, Siddaramaiah in a tweet addressed to Prime Minister's Office (PMO), appealed PM Narendra Modi to take cognizance of the situation and waive off farmer loan from commercial banks. "We have got FRBM Act (Fiscal Responsibility and Budget Management Act) and fiscal deficit target, we intend adhering to it", he said.

"The government has laid down several conditions like setting up a cut-off date and waiving only loans up to one lakh rupees".

The total farm loans in Karnataka stands at over Rs1.16 trillion. BS Yeddyurappa was wanting to sit on a quick for three days in July, looking for a farmer loan waiver.

  • Megan Austin