The share of agri and allied sector in the gross NPAs of scheduled commercial banks is only 9-13%, shows latest data
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.
In order to generate revenue for the massive loan waiver, the State has decided to increase excise duty on both fuel and alcohol, apart from the raise in road tax.
The budget proposes a hike in power tax from 6% to 9%. Petrol prices will increase by Rs 1.14 and diesel by Rs 1.12 per litre. H D Kumaraswamy announced farm loan waivers up to Rs 2 lakh too.
Policies like farm loan waivers are impacting asset quality of the agricultural sector and is also expected to affect state finances adversely, says a report.
Finance Minister Arun Jaitley today ruled out any waiver of farm loans and said the Centre will adhere to fiscal targets.