Karnataka CM H D Kumaraswamy’s new farm loan waiver plan raises more questions

HD Kumaraswamy announced a new scheme to incentivise all running crop loan up to Rs 1 lakh in cooperative banks.

Published: 13th July 2018 02:00 AM  |   Last Updated: 13th July 2018 01:09 PM   |  A+A-

Karnataka Chief Minister HD Kumaraswamy (EPS| Nagaraja Gadekal)

By Express News Service

BENGALURU: For anyone who had hoped for clarity on how the government would raise funds for the massive loan waiver promised to farmers, Chief Minister H D Kumaraswamy’s response on the floor of both houses came as no help.  Even as the opposition, as well as those in the government, are skeptical about raising funds for the Rs 34,000 crop loan waiver, Kumaraswamy announced a new scheme to incentivise all running crop loan up to Rs 1 lakh in cooperative banks. 

While assuring the opposition as well as the media that his government was in talks with banks to ensure the process was smooth, the Chief Minister provided no clarity on where the funds would come from, despite being repeatedly questioned by the opposition. “How will banks give ‘Debt-free’ certificates to farmers if the loan is not repaid fully? Will the RBI allow nationalised banks to take payment in installments? This is impossible,” B S Yeddyurappa said accusing the Kumaraswamy government of lying and cheating farmers. 

“It may be impossible for you, but it is possible for me,” H D Kumaraswamy responded to Yeddyurappa. The government, Kumaraswamy claimed, had held three meetings with banks so far to chalk out a plan. The estimated overdue crop loans in nationalised banks such as Canara Bank, SBI and Vijaya Bank, Kumaraswamy said, stands at Rs 10,528 crores. The government is also pinning its hopes on banks such as SBI that had encouraged ‘settlement’ to cut down the burden on the exchequer.   “We are hopeful that the revenues we receive from fuel, excise and power will reduce the burden. We have seen that our actual receipts have been better than predicted,” said a minister in the government. 

Rejecting claims of the opposition that the loan waiver announced in the recent budget will only benefit farmers from South Karnataka region, Kumaraswamy gave a breakup of his waiver district-wise. “Belagavi will get Rs 2,670 crore in the waiver,” Kumaraswamy said pegging it to be the largest beneficiary. 

However, the final numbers will be clear on July 24 when the state government holds a meeting with bankers.

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