Loan waiver scheme spares defaulters

The chief minister has spared defaulting loanee farmers, while choosing to toss a few crumbs at prompt repayers of farm loans.

Kumaraswamy waived all defaulted crop loans of farmers taken till December 31, 2017 in the first stage.

However, to “encourage” and “help” farmers who have repaid loans within time (non-defaulting farmers), he has decided to credit the repaid loan amount, or Rs 25,000, whichever is less, to the accounts of the farmers. A total of 44.89 lakh farmers will benefit under this scheme, which runs into Rs 34,000 crore.

Kumaraswamy said there were large landholding farmers who had borrowed loans exceeding Rs 40 lakh. “As it was felt that it was not right to waive higher value crop loan, I have decided to limit the loan amount to Rs 2 lakh,” he said.

Families of government officials and officials of the co-operative sector, farmers who have paid income tax for the past three years and other ineligible farm loan recipients will not be considered under this scheme.

The government will issue clearance certificate to facilitate the farmers to avail new loans, by waiving the arrears from the defaulting account. For this purpose, Rs 6,500 crore is earmarked in the 2018-19 budget.

The previous government has waived loan of Rs 8,165 crore made by farmers in co-operative banks. Of this, Rs 4,165 crore had been released during the previous year. Allocation has also been given to pay the remaining Rs 4,000 crore in this budget.

However, according to a release issued by the Chief Minister’s Office, the total amount to be waived stands at Rs 37,159 crore. The total amount borrowed by 44.89 lakh farmers from public sector, private, regional rural and cooperative banks is Rs 55,328 crore.

Of these, 27.67 lakh farmers have repaid their previous crop loans promptly. They will be given an incentive/compensation of Rs 6,893 crore (Rs 25,000 each).

The outstanding amount in the overdue category is Rs 30,266 crore, belonging to 17.32 lakh defaulting farmers.

Kumaraswamy appealed to his Cabinet colleagues to adopt austerity measures.

“A big challenge of fulfilling the promise of farmers’ loan waiver is before our government. Our first priority is to mobilise the necessary resources to fulfil this. We have already started working towards collecting resources. I have started austerity measures from the Chief Minister’s Office itself to cut down unnecessary expenditure. I am confident that my ministerial colleagues will follow my footsteps,” he said.

He said the government would not allocate Rs 34,000 crore at once. The amount will be paid to the banks in four annual instalments. This year, the government will be paying Rs 10,500 crore to the banks. “In the next three years, the entire amount will be paid. But for now, bankers have agreed to write off all the farmers’ debt,” he added.