Karnataka CM seeks Centre's help to roll out Rs 40,000cr farm loan waiver

Source: PTI | By Sajjad Qazi | Published on 19th July 2018, 2:06 PM | State News |

Bengaluru: Karnataka Chief Minister H D Kumaraswamy today called on Union Agriculture Minister Radha Mohan Singh and sought financial help for implementing the Rs 40,000 crore farm loan waiver scheme announced by the state government.

In its state budget on July 5, Janata Dal (Secular)–Congress coalition government had announced a loan waiver of Rs 34,000 crore, which jumped to Rs 40,000 crore after the state last week decided to waive all crop loans of Rs 1 lakh in cooperative banks availed till July 10, 2018.

In the meeting with Union Agriculture Minister here, Kumaraswamy said that the Karnataka government has taken a "drastic" step to waive farm loans taking into account the farmers' distress during the last eight years.

"The cost (of loan waiver) would be upwards at Rs 40,000 crore. I have requested assistance from the Government of India for the same," he said in a representation made to the Union Minister.

To ensure that cooperatives are able to function effectively, the chief minister demanded for increase in the quantum of concessional refinance which National Bank For Agriculture And Rural Development (NABARD) provides from the current 40 per cent to 75 per cent of the ground level disbursement.


"This will help us to provide timely and needy credit to small and marginal farmers," he said.

To ensure farmers get credit at lower rate, the chief minister said that the government should raise the subsidy from 2 per cent to 3 per cent on crop loans for cooperatives.

With regard to minimum support price (MSP) of crops, Kumaraswamy asked the Centre to consider C2+FL formula while fixing the price instead of current A2+FL formula.

He also suggested the central government to fix MSP for horticultural crops like tomato, onion and potato.

Among other demands, the chief minister demanded the Centre to give a special financial package of Rs 2,477.26 crore for losses incurred by arecanut and coconut growers in the state.

Coconut has been affected in 1.37 lakh hectare and arecanut in 95,352 hectare and the total loss is pegged at Rs 9,909.6 crore in the state, he added.

"The state has prioritised farmer welfare in all its programmes and simultaneously initiated concerted efforts to achieve the goal of doubling farmers income by 2022," the CM informed in the meeting. The state has been perennially affected by drought with six out of last eight years being declared as drought years and farmers have endured adverse effect of severe successive droughts, he added.

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