In a surprise move that the Opposition BJP termed a “definite pointer” to early polls in the State, Chief Minister Siddaramaiah announced crop loan waiver of up to ₹50,000 for farmers who have taken loans from State-run cooperative banks, as on June 20.
Speaking in the Legislative Assembly on the last day of the ongoing session, Mr. Siddaramaiah turned the tables on the BJP by hitting out at the Centre for not taking a decision on waiver of crop loans taken from nationalised banks and regional rural banks (RRB). The BJP had repeatedly been demanding farm loan waiver in the State.
The Chief Minister further reiterated that the order to implement the decision would be issued in a day or two and this would make Karnataka the first to implement it, though BJP-ruled Uttar Pradesh and Maharashtra, and Congress-ruled Punjab had announced similar farm loan waivers.
Reacting to the announcement, BJP Chief Ministerial candidate B.S. Yeddyurappa, in a statement, said, “This move of the Chief Minister is a definite pointer to elections in December. There is no doubt about it.”
The announcement comes amid speculation that the Congress government is considering advancing Assembly polls in the State, instead of waiting till April-May 2018.
Despite the Reserve Bank of India’s caution against waiver of loans, Mr. Siddaramaiah said: “I am announcing the loan waiver scheme in the interest of agriculture and in the interest of small farmers.”
Estimated to cost the State exchequer ₹8,165 crore, the waiver will benefit 22,27,500 farmers who took interest-free short-term loans from cooperative banks in the State. Mr. Siddaramaiah said farmers have availed of around ₹52,000-crore worth crop loans, of which only around ₹10,736 crore was from cooperative banks; the rest are from nationalised commercial banks and RRBs during 2016-17.
The entire Opposition, comprising the BJP and JD(S), welcomed the decision as joy erupted among the Congress members in the House.
