Banking News

crop loans: Karnataka CM Siddaramaiah announces waiver of interest on crop loans at coop banks


Chief Minister Siddaramaiah on Friday announced that the government would waive off interest on medium and long crop loans disbursed by cooperative banks to farmers. The government was doing this in spite of the ruling Congress making no such promises in its manifesto before the assembly polls in May this year, he added, on the last day of the winter assembly session in Belagavi.

“The Congress government has decided that the entire interest on farm loans will be waived off, if the principal of medium and long-term loans in cooperative banks is paid,” he said.

The BJP members, however, were not happy with the government writing off only the interest portion and urged the chief minister to waive the entire loan amounts. The CM hit back at the Opposition BJP, quetioning its own conduct with regard to farmer issues while in power. The previous BJP regime, the CM said, did not release a single rupee toward the farm loans. Taking a dig at former CM BS Yediyurappa, Siddaramaiah said the BJP had in fact pledged to write off farmers’ crop loans of up to Rs 1 lakh before the 2018 elections, but had reneged on its word after coming to power.

“Heavy rains had damaged a lot of crops back in 2019. However, in Shimoga, Yediyurappa [the CM at that time] had said the government did not have a machine to print notes to pay as much money as asked,” he taunted.

While the Congress manifesto does not explicitly mention loan waivers for this year, the party had promised to “offer reasonable compensation during droughts and famines for loss of produce, and postpone recovery of distressed loans.” The party has also promised to increase the ceiling of interest free soft loans to farmers from Rs 3 lakh to Rs 10 lakh.

The government has been under pressure from various farmer organisations over the last few months to waive off farmers’ loans with the state having received its lowest rainfall since 1973. The government has declared 216 out of 236 taluks as drought-hit, and has estimated the loss due to drought at about Rs 33,770 crore.


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