Karnataka govt waives Rs 34,000 cr farm loans

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Chief Minister HD Kumaraswamy on Thursday waived farm loans of Rs 34,000 crore, providing relief to the farmers of the state.

The budget proposed to waive farm loans totalling Rs 34,000 crore, with Rs 2 lakh per farmer family.

According to the budget for fiscal year 2018-19, “Waiver of all defaulted crop loans of the farmers made upto 31-12-2017 in the first stage. Apart from this, to help the farmers who repaid the loan within time, as an encouragement to the non-defaulting farmers, it is decided to credit the repaid loan amount or Rs.25,000 whichever is less to each of the farmer’s account.”

“To limit the loan waiver amount to Rs. 2 lakh per family. Due to this crop loan waiver scheme, farmers will get the benefit of Rs.34,000 crore. The families of Government officials and officials of the co-operative sector, farmers who have paid income tax for the past 3 years and other ineligible farm loan recipients will be outside the purview of this loan waiver scheme.”

“To facilitate the farmers to avail new loans, action will be taken by the Government to issue clearance certificate by waiving the arrears from the defaulting account. For this purpose, Rs.6500 crore is earmarked in 2018-19 budget. Apart from this, the previous Government has waived loan of Rs.8,165 crore made by farmers in co-operative banks and out of this, Rs.4,165 crore had been released during the previous year. Allocation has also been given to pay the remaining Rs.4,000 crore in this budget.”

The budget, however, proposes to tax people by:

  • Increasing petrol price by Rs 1.14 per litre and diesel Rs 1.12 per litre.
  • increase in excise duty on Indian made foreign liquor by 4 per cent
  • Power tariff will also be increased by 20 paise per unit.

Kumaraswamy, who holds the finance portfolio of the state told the legislators that the overall size of the state budget would be Rs 2,13,734 crore.

Budget allocation for other important sectors are:

  • Education- Rs 26,581 crore
  • Water resources- Rs 18,142 crore
  • Urban development- Rs 17,727 crore
  • Energy- Rs 14,499 crore
  • Social welfare- Rs 14,123 crore
  • Public Works Department (PWD)- 10,200 crore