Ahead of budget, K'taka farmers question slow implementation of loan waiver scheme

In the first budget announced by the coalition government, Chief Minister HD Kumaraswamy announced the details of a loan waiver scheme to counter the agrarian crisis in Karnataka. The total expenditure for the scheme was pegged at Rs 34,000 crore with loans from both cooperative and commercial banks being waived off. The announcement followed an election promise made by Kumaraswamy. 

Six months on, the coalition government has written off loans worth Rs 1,611 crore borrowed by 3.28 lakh farmers till January 30, as per Governor Vajubhai Vala's address at the beginning of the Assembly session on Wednesday.  That’s less than 5% of the total expenditure announced for the scheme in the 2018 budget. 

The slow pace of the implementation of the loan waiver scheme has come into sharp focus ahead of the second budget to be presented by Kumaraswamy on Friday. It also comes at a time 100 out of 175 taluks in Karnataka have been affected by drought in the kharif season (June to October) while 156 taluks have been affected by drought in the rabi season (October to January). This means that currently only 20 taluks in the state are not affected by drought, further aggravating the crisis plaguing farmers in the state. 

What farmer leaders say

Kurubhara Shantakumar, a farmer leader from Mysuru said that the farm loan waiver scheme had benefited a fraction of the famers it was intended for in Mysuru and its neighboring districts.  "The conditions applied on the loan waiver scheme meant that around 20% of the farmers in our area are able to avail the scheme. It is also moving along at a very slow pace so we don't know when the waiver will actually be implemented," he says.

Meanwhile Inamathi YB, a farmer leader from Hubballi told TNM that the loan waiver has been implemented for customers of two banks so far  - State Bank of India and Canara Bank. "In Dharwad, two banks have waived off loans worth Rs 50,000 so far but the rest of the waiver is yet to come through. In the past, the Siddaramaiah government had announced a similar waiver of Rs 50,000 from cooperative banks. If you combine both, my debt reduces but there is still a deficit of 2 lakhs. So can you really call it a loan waiver?," Inamathi asks. 

The situation is similar in other parts of the state. The delay in the disbursing of the loan waiver scheme has been linked to delay in collecting data about farmer loans. The process was initiated in July 2018 but it was only in January that the loan-waiver implementation began. The information about the scheme has also been made available online.

Several other states including Rajasthan, Madhya Pradesh and Chhatisgarh have followed up with loan waiver schemes of their own. The ‘Pradhan Mantri Kisan Samman Nidhi’ scheme, a direct income support scheme for small farmers, was also announced by the central government last week.   

But in spite of the urgency injected by the state government into implementing the loan waiver scheme in the past month, questions have been raised against the scheme, particularly since the rate of tax on petrol and diesel was hiked when the scheme was announced. 

This time around, Kumaraswamy has indicated that he wants to announce a budget directed at all sections of the society. All eyes will be on the budget on Friday to see whether it lives up to the promise.