Karnataka government to waive all farm loans in one go

Bengaluru: Following reports of the loan-waiver gaffe, Chief Minister H. D. Kumaraswamy-led Karnataka government has decided to waive all eligible farm loans taken from nationalized banks in one go.

On Wednesday, an order by the state government was issued after reports came to fore that money credited into bank accounts of 13,988 farmers was withdrawn by banks after farmers were found ineligible for loans during an audit.

The news rattled that state government, with affected farmers alleging that the Kumaraswamy dispensation government had deposited money only to win votes and withdrew it after losing in the recently concluded Lok Sabha polls.

The Kumaraswamy-led JD(S) government, after coming to power in 2018 had announced partial farm loan waiver amounting to Rupees 34000 cr in its inaugural budget session. The amount for each loan waiver was limited to 2 lakhs which was to be paid initially in four installments.

The new announcement means the government has to release about Rs 4,617 crore at one time to complete the process in commercial banks.