The Karnataka State Government on Wednesday announced that money towards farm loan accounts, which qualify as beneficiary under the ambitious farm loan waiver scheme in commercial banks, will be released in one-go.
The announcement is a departure from the decision to pay the money in four instalments when the scheme was launched in 2018.
So far, of the estimated Rs. 8,550 crore required to fund various types of loan accounts in commercial banks, the government has already released Rs. 3,930 crore towards 7.49 lakh accounts.
The announcement would mean that the Government will have to release about Rs. 4,620 crore to complete the waiver process in commercial banks of which about Rs. 1,219 crore is ready for disbursal. Net amount to be released by the Government would be Rs. 3,397 crore.
In the cooperative sector, the farm loan waiver is almost complete with government releasing Rs. 8,759 crore towards loan accounts of 18.70 lakh farmers.
Chief Minister H.D. Kumaraswamy, who has come under attack by the Opposition over the delay in payment of money to loan accounts over the last few months took to Twitter on Wednesday to make the announcement. He also tagged Tuesday's government order issued in this regard, and a copy of the loan waiver certificate to be issued to the farmer.
The latest move is set to benefit those farmers with regular loans, restructured loans and loans that are overdue, in commercial banks immediately. The government- however- said that the decision on waiver of NPA loans and payment of interest on such loans from January 1, 2018, will be notified later.
The Janata Dal (Secular)-Congress coalition government had earmarked Rs. 6,500 crore towards the loan waiver in 2018-2019 budget. Mr. Kumaraswamy in his budget presented for the financial year 2019-2020 earlier in February has earmarked Rs. 6,500 crore and Rs. 6,150 crore for commercial bank and cooperative sector loan waiver respectively.
Though Mr. Kumaraswamy had indicated earlier that the loan waiver could be completed much before the scheduled four instalments, the decision on Tuesday evening came after reports emerged that nearly 14,000 farmers- ineligible for the farm loan- had briefly benefitted due to errors committed by the banks. The government has asked banks to return Rs. 59 crore that had been credited towards farmers loans. The issue, however, had caused embarassment to the Government, and Mr. Kumaraswamy had to clarify the situation.
