K'taka announces crop loan waiver for farmers

Facing mounting pressure from farmers and opposition parties, the Karnataka government on Wednesday announced crop loan waiver of up to Rs 50,000 per farmer, that will cost Rs 8,165 crore to the state exchequer.

The waiver will help 22,27,506 farmers who had obtained loans from cooperative banks, Chief Minister Siddaramaiah said in the Assembly.

Karnataka has become the fourth state this year to take such step following Uttar Pradesh, Maharashtra and Punjab. The state is headed for polls Assembly polls next year.

"Farmers are in distress. They have been demanding loan waiver. We have to respond to farmers even though it will have an impact on the state's finances," Siddaramaiah said.

He said that in the interest of the agriculture sector, the government has decided to come to the rescue of 22,27,506 farmers and waived their crop loans or short-term loan from cooperative banks outstanding till Tuesday, by Rs 50,000 on each farmer, irrespective of the loan amount.

"Unlike in Uttar Pradesh, the order to this effect will be issued immediately," he added.

Karnataka has been reeling under successive years of drought, with the last two years being described as "severe" by the government.

Siddaramaiah had been under constant attack from the opposition BJP, which has accused him of "dilly dallying" on loan waiver.

But he had put the onus on the NDA government at the Centre, saying it had to take the initiative to waive loans borrowed from nationalised and grameen banks which came under its ambit.

Of over Rs 52,000 crore crop loan or short-term loan obtained by farmers, 80 per cent (about Rs 42,000 crore) has been obtained from nationalised and grameen banks and 20 per cent (Rs 10,736 crore) from cooperative banks.

Raising the political pitch, BJP state President B S Yeddyurappa had also announced a state-wide agitation, culminating in a stir in Bengaluru.

While making the announcement on Wednesday Siddaramaiah demanded that the Centre should now come to the rescue of farmers by waiving the loan obtained from nationalised and grameen banks. MPost