Karnataka: CM Kumaraswamy announces farm loan waiver scheme of Rs 34,000 crore in first budget

Newly elected Karnataka Chief Minister HD Kumaraswamy has announced a loan waiver scheme for farmers, at a cost of Rs 34,000 crore, but will cap the limit at loans of Rs 2 lakh. The coalition government of the Janata Dal (Secular) and Congress presented its first state budget in the Assembly on today.

The total budget is Rs 2.13 lakh crore, of which 16% has been set aside for the loan waiver.

“I have decided to waive all defaulted crop loans of farmers up to December 31, 2017, in the first stage,” Kumaraswamy, who also holds the finance portfolio, said, ANI reported. “Farmers who repaid the loan within time, as an encouragement to the non defaulting farmers, I have decided to credit the repaid loan amount or Rs 25,000, whichever is less.”

I have decided to waive all defaulted crop loans of farmers up to 31 Dec 2017 in the first stage. Farmers who repaid the loan within time,as an encouragement to the non defaulting farmers, I have decided to credit the repaid loan amount or Rs 25000 whichever is less: Karnataka CM pic.twitter.com/VeRUhM3DT5

— ANI (@ANI) July 5, 2018

Excise duty will be increased to generate funds for the farm loan waiver, he added, according to The New Indian Express. The budget proposes an increase in petrol prices by Rs 1.14 and diesel by Rs 1.12.

“It also proposes the tax on consumption of electricity to be increased from 6% to 9%, according to The Times of India. I have decided to waive all defaulted crop loans of farmers up to 31 Dec 2017 in the first stage. Farmers who repaid the loan within time,as an encouragement to the non defaulting farmers, I have decided to credit the repaid loan amount or Rs 25000 whichever is less”

Kumaraswamy’s Janata Dal (Secular), in its election manifesto, had promised to waive all farm loans, which totals upto Rs 53,000 crore, within 24 hours of taking charge of the government. However, several reports over the last few months have claimed that the Congress held up the process.

Kumaraswamy met representatives of farmers from 30 districts in May, to seek suggestions on the loan waiver scheme and promised to announce the farm loan waiver scheme in 15 days. He had claimed that he was trying to convince the Congress.

On Wednesday, Congress President Rahul Gandhi said the budget would focus on farm loans. “This budget is an opportunity for our government to make Karnataka a beacon of hope for farmers across India,” he wrote on Twitter.

On the eve of the Karnataka Budget, I’m confident our Congress-JDS coalition Govt will act on our commitment to waive farmer loans & to make farming more profitable.

This budget is an opportunity for our Govt. to make Karnataka a beacon of hope for farmers all across India.

— Rahul Gandhi (@RahulGandhi) July 4, 2018