Drought-hit Karnataka waives interest on farm loans

The Karnataka government Thursday waived interest on farm loans availed from state cooperatives by around 1.5 million farmers reeling under severe drought across the state.

"The waiver, which will cost the exchequer Rs.3,500 crore, will benefit the farmers to cope with the drought situation across the state arising out of deficit rainfall during this monsoon season," state Education Minister V.H. Kageri told reporters after a cabinet meeting here.

Bowing to pressure from lawmakers of the ruling Bharatiya Janata Party (BJP) and opposition parties and farmers' organsations, Chief Minister Jagadish Shettar had announced in the assembly in July that the government would be waiving interest and rescheduling loan repayments in light of the drought gripping south, central and northern parts of the state.

"The state government has written to the central government to share the burden of interest waiver to the farmers in view of the grim situation in the agriculture sector as rainfall has been below normal for the second consecutive year," Kageri said.

Leader of Opposition Siddaramaiah of the Congress criticised the state government Wednesday for not issuing the waiver order despite the chief minister announcing it on the floor of the house.

The cabinet also approved the rural roads development programme in 189 assembly segments across the state at a cost of Rs.2,160 crore.

"The government will develop 50 km of rural roads in each of the 189 constituencies," Kageri said.

The government also decided to construct 6,867 houses for the economically weaker sections and distribute 130,471 housing sites by the state-run Karnataka Housing Board (KHB) at a cost of Rs.7,888 crore.

The government has decided to allow Udupi Power Corporation Ltd (UPCL) to import 1.5 million tonnes coal for its 600 MW second unit thermal power plant in Udupi district in the coastal region.

"The cabinet decision allows the firm to import coal with higher ash content of up to 12 per cent as against 4.75 per cent earlier," Kageri said.