Karnataka govt waives co-op farm loans

Karnataka govt waives co-op farm loans

Karnataka govt waives co-op farm loans
Bowing to pressure from Opposition parties, Chief Minister Siddaramaiah on Wednesday announced waiver of short-term crop loans to the tune of Rs 8,167 crore availed by farmers from co-operative banks in the state.

About 22.27 lakh small farmers who had availed up to Rs 50,000 loan from co-operative banks will benefit from the government’s gesture. All outstanding loans as on June 20 this year will be waived. However, Siddaramaiah, who also holds the finance portfolio, did not disclose how he would mobilise resources to implement it.

The ruling Congress has been under intense pressure to write off farm loans after the governments of Uttar Pradesh, Maharashtra and Punjab waived farm loans recently. Opposition parties, the BJP and the JD(S), in Karnataka had been demanding a loan waiver and had even threatened to go on agitation. The chief minister, however, had maintained that his government is ready for waiver if the Centre waives farm loans taken from nationalised banks.

Siddaramaiah appears to have relented after a nudge from Congress vice-president Rahul Gandhi. The Congress leader had asked the chief minister to bail out farmers during his recent visit to Bengaluru.

Karnataka has been reeling under drought for the past two years. As many as 139 taluks have been declared drought-affected by the government. Crop loans were last waived in 2013 by the BJP government headed by Jagadish Shettar. About Rs 3,600 crore was written off by the Shettar regime.

Centre’s turn

“We have waived co-operative farm loans. The Centre should now come to the rescue of farmers who have obtained loans from nationalised banks and rural banks. I demand that the Centre waive short-term loans worth Rs 42,000 crore availed by farmers from nationalised banks and rural banks...Otherwise, the BJP will not have the moral right to speak a word about farmers,” Siddaramaiah stated after announcing the loan waiver in the Assembly.

The farmers have taken altogether Rs 52,000 crore in short-term crop loans in Karnataka. Of this, Rs 10,736 crore are from co-operative societies and the remaining from nationalised banks and rural banks. This means that about 80% farmers who have availed loan will benefit if the Centre takes a similar decision. Hence, the Centre has more responsibility in this regard, he added.