Karnataka cabinet gives nod to waive-off Rs 301-bn loan of 2.3-mn farmers

Those pressurising farmers for repayment will have to pay a penalty upto Rs 100,000 and face a one-year jail term, said Karnataka CM

The Karnataka cabinet on Friday gave its approval to waiving Rs 301.63 billion farm loans in respect of nationalised or commercial banks, as announced in the budget.

"The State government had announced loan waiver in the budget. We have already issued a GO (Government order) on cooperative bank farm loan waiver. In the same way in today's meeting we approved waiving of loans from nationalized banks, and issued a GO," Chief Minister H D Kumaraswamy said.

This waiver of Rs 301.63 billion to benefit about 2.3 million farmers also includes interest to be paid by the government to nationalised banks, he said, adding they had agreed to four instalments, but were not ready to leave the interest.

The government has limited the loan amount to Rs 200,000 in this waiver. This also includes waiving of existing loan up to Rs 25,000, he said.

The Chief Minister said repayment to nationalised banks would be done in six instalments, for which government has already earmarked Rs 65 billion for the current year.

Earlier this month the cabinet had given its nod to waiving Rs 94.48 billion existing farm loans in respect of cooperative banks, and had issued a GO in this regard.

The state government also announced a debt relief to landless agricultural labourers, small farmers and those from weaker sections, as one-time relief.

Pointing out that the debt relief act was brought in the state earlier in 1976 and 1980, the Chief Minister said on Friday the cabinet decided to recommend to the President to issue a similar ordinance now, across the state."

On the debt relief, he said under this ordinance one who has obtained a loan can be relieved from repayment, but it would not be applicable to loans obtained from micro finances and other institutions that comes under RBI's rules and acts.

It further states that small farmers should not have land more than two hectares, annual income should be less than Rs 1,25,000 and also that one should not have any income from agriculture sources.

Also, those pressurising farmers for repayment will have to pay a penalty upto Rs 100,000 and face a one-year jail term.

Kumaraswamy also said that he has written to the Prime Minister, Home Minister and Defence Minister, requesting for Rs 20 billion relief to flood and landslide affected regions of the state, including Kodagu district.

He said the Chief Ministers Relief Fund has received Rs 251.6 million and that government employees had contributed one day's salary, amounting to Rs 1.02 billion.