Kumaraswamy to present maiden budget today; farm loan waiver likely

The previous waiver cost the state exchequer Rs 81.65 bn in fiscal 2017-18

Karnataka Chief Minister H D Kumaraswamy will on Thursday present his coalition government's maiden Budget for fiscal 2018-19, an official said on Wednesday.

"Kumaraswamy will present the full-fledged Budget for 2018-19 of the JD(S) and Congress coalition government in the Assembly as he holds the Finance portfolio," the official in the CM's Office told IANS.

Though Congress Legislature Party leader and former Chief Minister Siddaramaiah told Kumaraswamy to present a Supplementary Budget since he had presented the Budget for this fiscal on February 16, the Chief Minister secured Congress President Rahul Gandhi's approval to present the full Budget as the head of the coalition government.

"I am bound by the people's verdict to present the full budget after the May 12 Assembly polls, in which about 100 new legislators were elected and expect me to present programmes and policies of the new government," Kumaraswamy told reporters here on June 19.

As agreed by the coordination committee of the alliance partners, the budget will have details of the loan waiver for the distressed farmers reeling under crop losses due to consecutive droughts or floods in the recent years.

"Farm loans equivalent to Rs 100 billion are likely to be waived along with interest on them, as decided at a special meeting the Chief Minister held with Cooperation Minister Bandeppa Khashempur and Agriculture Minister N H Shivashankara Reddy on June 25 here," recalled the official.

The loans were borrowed by farmers across the state from district cooperative banks and state cooperatives.

"A decision to waive crop loans farmers raised from state-run banks will be taken after the central government responds to the chief minister's letter for its concurrence," added the official, preferring anonymity.

The proposed write-off will be in addition to a similar waiver the previous Congress government declared on June 21, 2017, for over 2.2 million farmers who borrowed crop loans up to Rs 50,000 each from the cooperative banks.

The previous waiver cost the state exchequer Rs 81.65 billion in fiscal 2017-18.

To free the distressed farmers from the debt burden, the state government has decided to conduct a survey of agriculture borrowers with details of loans availed from different institutions, including cooperatives, regional and state-run banks.

According to the state agriculture department's estimates, of the 7.4 million farmers across the state, 2.5 million of them don't take institutional loans but borrow from private sources, including moneylenders at a high-interest rate and get caught into a debt trap.

In a related development, opposition BJP leader B S Yeddyurappa sought a White Paper on the state's finances ahead of the Budget presentation, alleging that loans and bills amounting to Rs 2.38 trillion were outstanding.

"The coalition government should first present a White Paper on the state's finances, which are under stress due to mismatch between revenue collection and expenditure," Yeddyurappa told reporters.