Karnataka Budget 2018: Kumaraswamy waives off all farm loans

Bengaluru, July 5 : Karnataka Chief Minister HD Kumaraswamy announced farm loan wavier amounting to Rs 34,000 crore as he  presented the first budget of his Congress-JD(S) coalition government in the Vidhana Soudha on Thursday.

Kumaraswamy  waived off  all defaulting loans up to December 31, 2017. Kumaraswamy, who also holds the finance portfolio said,”I have decided to waive all defaulted crop loans of farmers up to 31 Dec 2017 in the first stage.I have decided to credit the repaid loan amount or Rs 25000 whichever is less.”

The previous waiver had cost the state exchequer Rs 8,165 crore.

“Farmers who repaid the loan within time,as an encouragement to the non defaulting farmers, I have decided to limit the loan amount to Rs 2 lakhs. Due to this crop loan waiver scheme, farmers will get the benefit of Rs 34,000 crore,HD Kumaraswamy said while presenting the budget in Vidhana Soudha.

To facilitate the farmers to avail new loans action will be taken by the government to issue clearance certificate by waiving the arrears form the defaulting account. For this purpose, Rs 6500 crore is earmarked in 2018-19 budget, he said.

As agreed by the coordination committee of the alliance partners, the budget will have details of the loan waiver for the distressed farmers reeling under crop losses due to consecutive droughts or floods in the recent years.

“Farm loans equivalent to Rs 10,000 crore are likely to be waived along with interest on them, as decided at a special meeting the Chief Minister held with Cooperation Minister Bandeppa Khashempur and Agriculture Minister N.H. Shivashankara Reddy on June 25 here,” recalled the official.

 

Congress president Rahul Gandhi said, “On the eve of the Karnataka Budget, I’m confident our Congress-JDS coalition Government will act on our commitment to waive farmer loans and to make farming more profitable.”

The Kumaraswamy-led JD(S) is expected to fulfill the promise he made during the campaigning of waiving farm loans borrowed both from cooperative and nationalised banks.

Though Congress Legislature Party leader and former Chief Minister Siddaramaiah told Kumaraswamy to present a Supplementary Budget since he had presented the Budget for this fiscal on February 16, the Chief Minister secured Congress President Rahul Gandhi’s approval to present the full Budget as the head of the coalition government.

“I am bound by the people’s verdict to present the full budget after the May 12 Assembly polls, in which about 100 new legislators were elected and expect me to present programmes and policies of the new government,” Kumaraswamy told reporters here on June 19.

“A decision to waive crop loans farmers raised from state-run banks will be taken after the central government responds to the chief minister’s letter for its concurrence,” added the official, preferring anonymity.

The proposed write-off will be in addition to a similar waiver the previous Congress government declared on June 21, 2017 for over 22-lakh farmers who borrowed crop loans up to Rs 50,000 each from the cooperative banks.

The previous waiver cost the state exchequer Rs 8,165 crore in fiscal 2017-18.

To free the distressed farmers from the debt burden, the state government has decided to conduct a survey of agriculture borrowers with details of loans availed from which institutions, including cooperatives, regional and state-run banks.

According to the state agriculture department’s estimates, of the 74-lakh farmers across the state, 25-lakh of them don’t take institutional loans but borrow from private sources, including moneylenders at a high interest rate and get caught into debt trap.

In a related development, opposition BJP leader B.S. Yeddyurappa sought a White Paper on the state’s finances ahead of the Budget presentation, alleging that loans and bills amounting to Rs 2.38-lakh crore were outstanding.

“The coalition government should first present a White Paper on the state’s finances, which are under stress due to mismatch between revenue collection and expenditure,” Yeddyurappa told reporters here.

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