Kumaraswamy announces partial farm loan waiver

Bengaluru: The Karnataka Government-led by Chief Minister HD Kumaraswamy on Thursday announced a partial loan waiver of Rupees 34,000 cr.

This will benefit farmers whose loans are less than Rs 2 Lakh.
The Kumaraswamy-led JD(S) had resolved to waive farm loans borrowed both from cooperative and nationalised banks within 24 hours of formation of a full-fledged government of their party.

“I had resolved to waive all types of crop loans of farmers taken for agricultural activities within 24 hours of formation of a full-fledged government of our party,” Kumaraswamy said while presenting the budget.

“I had discussions with government officials, nationalized banks, officers of the co-operative sector and the farmers with regard to the crop loans of the farmers. As a result of this discussion, I have decided to waive all defaulted crop loans of the farmers made upto 31-12-2017 in the first stage,” he added.

The Chief Minister announced a farm loan waiver at the cost of Rs 34,000 crore and decided to limit the loan amount to Rs 2 lakhs. The state has decided against waiving off higher value crop loan.

He said, “I have decided to limit the loan amount to Rs 2 lakhs. Due to this crop loan waiver scheme, farmers will get the benefit of Rs 34,000 crore.”
Apart from this, to help the farmers who repaid the loan within time, the Chief Minister has decided to credit the repaid loan amount or Rs.25,000 whichever is less to each of the farmer’s account.

He said, “Farmers who repaid the loan within time, as an encouragement to the non defaulting farmers, I have decided to credit the repaid loan amount or Rs 25000 whichever is less.”

“To facilitate the farmers to avail new loans, action will be taken by the government to issue clearance certificate by waiving the arrears form the defaulting account. For this purpose, Rs 6500 crore is earmarked in 2018-19 budget,” said Kumaraswamy.

Kumaraswamy on Thursday presented the first budget of his Janata Dal (Secular)-Congress coalition government in the Vidhana Soudha.

“It is a new experience for me as a finance minister. I have taken up this as a challenge to give a surplus budget,” Kumaraswamy had told ANI on arriving at Karnataka’s Vidhana Soudha earlier today.

On July 1, the Congress-JD(S) coordination committee was constituted to oversee smooth functioning of the government to approve the Common Minimum Programme, which includes waiver of farm loans, creation of one crore jobs and allocation of Rs. 1.25 lakh crore for irrigation over the next five years.

According to media reports, financial experts and some government officials have already expressed concern over the impact of loan waiver on the state’s finances.