Karnataka’s maiden budget reveals Rs 34,000 crore farmers’ loan waivers

The JD(S)-Congress alliance government of Karnataka has revealed its maiden budget where Rs 34,000 crore farmers’ loan waivers were announced.

For the benefit of small and marginal farmers, who have been financially hit by four years of drought over the past five years, Chief Minister HD Kumaraswamy on Thursday announced a mega farm-loan waiver worth Rs 34,000 crore.

“I have decided to waive all defaulted crop loans of farmers up to December 31, 2017, in the first stage,” Kumaraswamy said in the assembly. As an encouragement to the non-defaulting farmers, the government has also decided to credit the repaid loan amount or Rs 25,000 (whichever is less) directly to the accounts.

The fuel prices in the state will also cost more as the CM has proposed to increase the tax by 2%. This means the petrol price will be increased by Rs 1.14 per liter and diesel by Rs 1.12 per liter.

Exeliter duty on Indian made liquor will also be increased by 4%. The CM informed that the Karnataka gross state domestic product (GSDP) in 2017-18 grew at 8.5% as against 7.5% in 2016-17.

READ ALSO: Will farmers get relief TODAY? Karnataka budget presentation

In the run-up to the recent assembly polls, Chief Minister Kumaraswamy had promised to waive farm loans borrowed both from cooperative and nationalized banks within 24 hours of coming to power.

Kumaraswamy, who also holds the finance portfolio, had earlier cited coalition compulsions and the need for studying the financial condition of the state as the reason for the delay in the announcement of loan waiver. He has also announced the continuation of all welfare programmes of previous Congress government.

The Congress-Janata Dal (Secular) coordination committee constituted to oversee the smooth functioning of the government had on Sunday approved the common minimum programme, which includes the waiver of farm loans, the creation of one crore jobs and allocation of Rs 1.25 lakh crore for irrigation over the next five years.

It also included construction of 20 lakh houses for homeless families in the state in the next five years, along with the implementation of a universal health policy, ‘Arogya Karnataka’ of the previous government, among others.

The budget comes amid coalition worries and debate over whether there was a need for a full-fledged fresh budget as the government would continue almost all the flagship schemes of the previous government.