Karnataka planning to waive agricultural loans

Under pressure to check the suicide-spree among farmers in the State, the coalition Government is Karnataka is seriously considering a proposal to provide one-time waiver of all outstanding agricultural loans obtained by farmers from co-operative banks.

Already, the JD (S)-BJP Government in the State has announced a waiver of agricultural loans upto a maximum of Rs 25,000 obtained from co-operative banks. But, the continuing suicide-spree of debt-ridden farmers, which claimed more than 320 lives since January 2007, has forced the Government to think aloud about providing a one-time relief by waiving all outstanding agricultural loans obtained from co-operative banks.

Addressing a farmers’ rally in Hassan on Sunday, Chief Minister H D Kumaraswamy said wishes to fully liberate the farmers from the debts they owed to co-operative banks. Under the instructions of JD (S) supremo and former Prime Minister H D Deve Gowda, the coalition Government will formulate a scheme to mop up funds to off-set the impact of the loan waiver on co-operative institutions, he said.

Though the State Government has waived loans upto Rs 25,000, Kumaraswamy regretted that the measure had not helped arrest the suicide-spree among farmers. The loan waiver will benefit poor weavers and fishermen, besides the farmers, he said.

He also appealed to the Federal Government to take decision to waive agricultural loans obtained from nationalized banks also. The co-operative banks come under the purview of the State Government while the nationalized banks are governed by the Federal Government rules, he pointed out.

Meanwhile, Kumaraswamy’s gesture to waive the entire outstanding agricultural loans obtained by the farmers from co-operative banks has found favour even with its coalition partner BJP, which is scheduled to take over the Chief Minister’s mantle during October this year.

Speaking to reporters in Bangalore, Deputy Chief Minister and Finance Minister B S Yediyurappa, who is tipped to assume the Chief Minister’s post in October, said the BJP is committed to providing complete waiver of outstanding agricultural loans.
He also said a BJP legislature party meeting has convened in Bangalore on June 21 in the presence of the newly appointed party leader in charge of Karnataka Yeshwanth Sinha to formulate a code of conduct for the party legislators after the scheduled transfer of power.