Karnataka waives Rs 8,165 cr in farm loans, cites weak monsoon for decision

Asks Centre to waive of farmer loans from nationalised and commercial banks

Karnataka joined states such as Uttar Pradesh, Punjab and Maharashtra to announce part waiver of farmer loans taken from cooperative banks, as the ruling Congress gears up for elections next year.

The loan waiver of Rs 8,165 crore that would benefit 22,27,506 farmers is limited to Rs 50,000 each farmer for loans availed till June 20.

Chief Minister Siddaramaiah, who also holds the finance portfolio, has so far maintained that waiving of loans would be a disservice to honest people who repay loans. But three consecutive years of drought and a weak monsoon this year has forced him to change track.

He said there was not  enough inflow of water into Krishna Raja Sagar and Kabini dams ever since Monsoon hit the Kerala coast in the last week of May.

"If you compare to Northern Karnataka, monsoon activity in Southern Karnataka has collapsed," he said.

Siddaramaiah also asked the Centre to waive off crop loans of Karnataka farmers worth about Rs 42,000 crore taken from nationalised and commercial banks. The state said farmers have taken a total  loan of Rs 1,16,006 crore, of which short term loans stood at Rs 52,000 crore. The farmers had taken loan of Rs 10,736 crore from cooperative institutions.

He took the decision on the back of three consecutive years of drought - the worst in four decades and under pressure from farmer groups and the opposition Bharatiya Janata Party, which has taken similar decisions in Maharashtra and Uttar Pradesh.  

"Despite the crisis, the farmers in our state have not taken to protests. But we had to waive loans of upto Rs 50,000 considering that our farmers are struggling due to three consecutive drought years," said Siddaramaiah.

The crucial 2018 assembly elections in the state that could see an aggressive BJP look at reclaiming power in its gateway to the South also played a part in Siddaramaiah take the decision to waive the farmer loans. Siddaramaiah, who had earlier hinted of retiring from active politics after his term ended,  has been tasked to lead the Congress to do a repeat this time.

In 2013, Siddaramaiah mobilised the Ahinda (the Kannada acronym for minorities, backward classes and dalits) votes to claim the state defeating the BJP. The BJP lost power due to corruption charges of its main leader B S Yeddyurappa and overt influence of the Reddy brothers in decision making that hurt the image of the party. Yeddyurappa,  who was acquitted of corruption charges, leads the party's campaign in the state. Janata Dal (Secular), the party formed by former Prime Minister H D Deve Gowda  will also give a tough  fight to Siddaramaiah in a three cornered fight.