Will crop loan waiver in K'taka be an exercise in futility?

siddaramaiah-budget (File) Karnataka Chief Minister Siddaramaiah | Agencies

The Karnataka government's decision to help around 22 lakh farmers who availed loans from cooperative banks is not expected to benefit the majority of farmers in the state as most have loans in the range of Rs 1-3 lakhs. To source the rest of the money, they will to approach private money lenders and other sources. Many experts also say that since the assembly elections in the state is just a few months away, it is being looked as an electoral stunt. Also, since the loan waiver is applicable only for those farmers who availed loans from the cooperative banks, those indebted to other banks will not benefit at all.

"A crop loan waiver of up to Rs 50,000 per farmer will not solve the problem of majority of farmers as most of them have taken loans in the range of Rs 1-3 lakhs and they will be forced to approach private money lenders, which will be put them in more trouble. If Chief Minister Siddaramaiah still wants to help the farmers, he should waive off the complete crop loan amount and not restrict it to Rs 50,000 per farmer. When other states like UP, Maharashtra and Punjab are allowing a much higher waiver, Rs 50,000 waiver will not at all serve the purpose of farmers in Karnataka,” Kurbur Shanta Kumar, the president of the Sugarcane Growers’ Association (SGA) told THE WEEK.

Some experts also believe that this move will benefit only a very small section of the farmers in Karnataka as many of them are not members of cooperative societies. “I feel it is nothing more than a political stunt as the assembly elections are round the corner. This move will benefit only a very miniscule section of farmers who are members of the cooperative banks and will not be of any help to the larger farming community,” said Rame Gowda, a political expert and a former farmer leader of Karnataka.

It is a known fact that Karnataka has been reeling under drought for the last few years and farmers were having a tough time. As per media reports, 80 per cent of farmers have taken crop loans from nationalised and commercial banks. The rest have availed financial aid from cooperative societies and banks. Incidentally, majority of loans are in the range of Rs 1-3 lakhs even from the cooperative societies and banks. Reports also say that Karnataka has an accumulated debt of Rs 2.4 lakh crore in the last four years and this step will exert more stress on the state finances.

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Topics : #Karnataka

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