Karnataka orders waiving crop loans in one go

Karnataka will waive crop loans in commercial banks at one go, the State government has said in an order.

This includes restructured loans (Rs 2,812 crore), overdue loans (Rs 3,057 crore) and incentive for regular loans (Rs 720 crore) in nationalized banks. In an order, the Revenue Department has said payments, subtracting the money already paid, will be credited to the bank accounts of eligible farmers in a single instalment.

The crop loan waiver is Chief Minister HD Kumaraswamy’s pet scheme, his poll promise that has been implemented “after mounting much pressure on officials,” in his own words. Originally, the waiver was to be implemented over a four-year period.

The government, however, is yet to take a stand on what it will do with crop loans that have become non-performing assets (NPA). There are 1.08 lakh NPA loans worth Rs 965 crore.

So far, the government has paid Rs 3,930 crore toward 7.49 lakh crop loan accounts in commercial banks. In cooperative banks, the government has paid Rs 4,830 crore for 11.20 lakh accounts. The crop loan waiver scheme involves crediting Rs 25,000 into the accounts of farmers who have a regular loan and crediting upto Rs 2 lakh in the accounts of those who have restructured loans.