Karnataka Chief Minister Siddaramaiah on Monday requested Prime Minister Narendra Modi to waive the crop loans availed by farmers from commercial, private and Regional Rural Banks (RRBs).
In a letter informing him about the state government waiving the crop loan availed through co-operative banks, he pointed out that 80 per cent of the agricultural loans in Karnataka are availed from commercial Banks and RRBs and 20 per cent are availed from co-operative banks.
"In view of the persistent demand from farmers and farmers' organisations and also from legislators from all parties, the state, despite its financial constraints, has waived the short term crop loan upto a maximum of Rs 50,000 per farmer out of the cooperative bank loans outstanding as on 20.06.2017," Siddaramaiah said in a letter.
Noting that this relief would not bring succor to all the farmers, he said "I fervently appeal to you to waive similar loans availed by the farmers from Commercial Banks, Private Banks and RRBs.""This will go a long way in mitigating the hardship of the farmers and helping them to undertake normal agricultural operations in the current kharif season," he added.
Karnataka, which is headed for Assembly polls next year became the fourth state this year to take such step following Uttar Pradesh, Maharashtra and Punjab.
The loan waiver was announced by Siddaramaiah on June 21 on the floor of the assembly, and a government order to this effect was issued on June 23. However, Finance Minister Arun Jaitley had recently said that the Centre was not considering any proposal for farm loan waiver, and it intends to adhere to the Fiscal Responsibility and Budget Management (FRBM) Act and fiscal deficit targets.
Central government's non committal over loan waiver is being used as by Congress party in the state to target the BJP, by calling it "anti farmer".
The Chief Minister in his letter has pointed out that crop loans waived by the state government is worth Rs 8165 crore pertaining to 22,27,506 farmers, which amounts to 76 per cent of the outstanding short term loans of co-operative societies.
Karnataka has been facing consecutive years of drought for last six years and it has been severe in the last two years.
As on March 31, about 51 lakh farmers of Karnataka have availed Rs 52,744.28 crore of crop loans, of this 28.73 lakh farmers have availed Rs 42,007.47 crore loans from Commercial Banks and RRBs and 22.27 lakh farmers have availed Rs 10,736.81 crore of loans from Co-operative banks.