BENGALURU: Ahead of the legislature session starting from Monday, the State Government on Saturday announced a waiver of interest on medium and long-term loans taken by farmers from cooperative societies. According to the government order, Rs 466.14 crore interest amount that is overdue on Rs 560.11 crore loans taken by 92,525 farmers has been waived off.
The farmers, who clear the principal amount by March 31, 2020, need not pay the interest component of the loan, while the State Government will pay the cooperative societies. The waiver will be applicable to loans that are due as on January 31, 2020 and taken from primary agriculture credit cooperative societies, district central cooperative banks, primary agriculture and rural development cooperative banks and LAMPS (Local Area Multi-Purpose Cooperative Societies). The government order has made it clear that it will not apply to loans taken from nationalised banks, regional cooperative banks or other financial institutions.
Cooperatives give long-term loans to farmers for income generation and asset creation, like putting up a cattle-shed, sprinklers for irrigation, organic farming, sericulture and other activities. It will not apply to loans taken for non-agriculture activities and also loans obtained by self-help groups. Government sources said that these loans were overdue for the last many years the and a large number of farmers were willing to clear their loans if the interest was waived off. The government decision will benefit over 40,000 farmers.
The previous JDS-Congress coalition government headed by HD Kumaraswamy had waived off short-term crop loans. In July 2018, the state government had done away up to Rs 1 lakh short-term loans taken by farmers from credit cooperative societies.
However, due to floods and drought, farmers were unable to clear their loans and it had become difficult for societies to give them fresh loans. To help farmers clear their earlier loans and also to avail fresh loans, the government has taken the decision, the sources said. The rate of interest on long-term loans is decided every year by the State Finance Department based on a report from the Cooperatives Department.