HD  Kumaraswamy to work on loan waivers; not empty promises

Kumaraswamy is hoping to raise resources to fulfil his promises by plugging the misuse of subsidies on foodgrains being distributed to Above Poverty Line (APL) card families.
Chief Minister H D Kumaraswamy during the ongoing Assembly Session at Vidhana Soudha in Bengaluru on Tuesday | Nagaraja Gadekal
Chief Minister H D Kumaraswamy during the ongoing Assembly Session at Vidhana Soudha in Bengaluru on Tuesday | Nagaraja Gadekal

BENGALURU: Set on the course to deliver on his prime poll promise of farm loan waiver, Chief Minister H D Kumaraswamy is not banking on borrowing alone to script a success story for his maiden budget to be presented on July 5. Kumaraswamy is hoping to raise resources to fulfil his promises by plugging the misuse of subsidies on foodgrains being distributed to Above Poverty Line (APL) card families, tapping huge funds which are lying dormant under various schemes and deferring ‘Raitha Belaku’ programme.

Though Kumaraswamy’s farm loan waiver is said to entail an expenditure of about Rs 30,000 crore, the immediate burden is likely to be much less as the loan waiver scheme will come with a few conditions and will not happen in one shot. The waiver will spill over to more than one budget, sources close to the Chief Minister said.

Kumaraswamy is said to have identified a few options to tap the resources without hurting the interests of the ‘aam aadmi’.

“Plugging the huge misuse of subsidies being provided on foodgrains being distributed to APL card families is under consideration. There are more than 2.10 lakh APL card holders in the state, but most of these families are not buying foodgrains from fair price shops due to poor quality of grains being distributed through the Public Distribution System. The foodgrains find their way to hotels and fair price shop owners are reaping the benefit. The government is mulling to make better use of this subsidy amount,” sources in the Finance Department said.

The ‘Raitha Belaku’ programme announced by former CM Siddaramaiah in his budget could also help Kumaraswamy. The programme seeks to provide Rs 5,000 cash aid per hectare for farmers depending on rain-fed farming. The scheme is unlikely to take off as the preparatory work of identifying the beneficiaries has not been done even as the sowing has been completed for Kharif crop in most parts of the state.

The Rs 7,400 crore Welfare Fund for Unorganised Workers is another source the Kumaraswamy government is looking at as part of its financial jugglery to meet the budgetary challenge. However, a Supreme Court order against the diversion of the fund is being seen as a hurdle, a senior official who is part of the budget preparation said.

With scope for states to levy new taxes severely curtailed under the GST regime and even the option of increasing the excise duty on liquor ruled out after an 8 per cent hike in the Siddaramaiah budget of March 16, Kumaraswamy has no option but to depend on borrowing and jugglery of allocations made for various sectors, said economist and visiting professor at Institute of Social and Economic Change, Abdul Aziz.

However, for those worried about fiscal discipline, Kumaraswamy has assured that he will meet the challenge without violating the  Karnataka Fiscal Responsibility Act. Karnataka’s fiscal deficit at Rs 35,127 crore is 2.49 per cent of the GSDP well below the 3 per cent limit and total liabilities of 2,86,790 crore is estimated to be 20.36 per cent of GSDP which is within the limit of 25 per cent, Aziz said.

Loan waiver is a continuation of Cong programme: Moily

Bengaluru: Even as CM Kumaraswamy is preparing the ground to announce farm loan waiver in his first budget on Thursday, Congress maintains that it is the continuation of its government’s programme. “Loan waiver will also be a continuation of our programme. We have done that in the past and they will be doing it now,” said former CM M Veerappa Moily, who headed the five-member committee that drafted Common Minimum Programme. “Farm loan waiver is a commitment made by both the parties. We have capabilities to work out loan waiver scheme that will not impact any welfare programme started by the Congress government,” he said.

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