BENGALURU: The reduction in the National Bank for Agriculture and Rural Development (NABARD) funding to Karnataka this year would impact interest-free loans provided to farmers. Cooperation Minister KN Rajanna said Karnataka got Rs 2,340 crore, which is over 58 per cent less than last year’s Rs 5,600 crore.
Speaking to the media in Bengaluru, Rajanna said this year, they had asked for Rs 9,200 crore and were hoping to get much more than last year’s funding. On the contrary, the state received just Rs 2,340 crore, which will impact the interest-free loans provided to farmers, who may have to approach private money-lenders.
He said if farmers do not get institutional finances, they will go to private money-lenders to take loans at higher rates of interest.
The NABARD was giving funds at a subsidised rate of interest of 4.5 per cent to the state. Along with those funds, Apex Bank, district banks and Primary Agriculture Credit Societies (PACS) used to give interest-free loans to 35 lakh farmers, he said. Of that, Rs 1,200 crore interest subsidy was given by the state government on behalf of farmers.
Rajanna and Agriculture Minister N Chaluvarayaswamy urged the Centre to direct the NABARD to consider the state government’s request for Rs 9,200 crore funding. Rajanna said they have written to the Centre and would try to meet Prime Minister Narendra Modi and Union Finance Minister Nirmala Sitharaman after November 26, to request them to consider the state’s demand.
“They have not given any reason for the drastic reduction in the funding. NABARD officials told us that the RBI has reduced their general Line of Credit, so they reduced it (funding to Karnataka),” Rajanna said.
Chaluvarayaswamy said Union ministers and Parliamentarians from Karnataka should take it up with the Centre. The agriculture minister said the reduction in NABARD funding will have an impact on food production. The state government is giving Rs 3-5 lakh interest-free loans, and Rs 10-15 lakh at a 3 per cent rate of interest, he said.
The ministers hit out at the Centre for the funding reduction, while giving tax waivers and other benefits to big corporates.