News Karnataka
Thursday, December 07 2023

Siddaramaiah Govt waives Rs 296.52 crore farm loan interest

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Bengaluru: In a major relief to the distressed farmers, the state government has waived the interest of medium and long term loans borrowed from cooperative banks for the current financial year. Even the installment for this year would be deferred to next year and the interest amount of Rs 296.52 crore is being borne by the government.

Ganesh Chaturthi gift : State Govt waives housing scheme dues-1Speaking to media here on Wednesday in Bengaluru, cooperatives minister Mahadev Prasad said that due to drought in the state, the government has tried to help farmers. As high as 96% of those who have availed interest free Rs 3 lakh loans from cooperative institutions have already paid it back. Those who availed medium and long-term loan are facing hardship. So, the interest for this financial year would be waived and farmers can pay this year’s installment by next year, he said.

The cooperative banks have also been directed not to issue notices to farmers to repay loan installments and interest for the current year.

The minister however ruled out complete waiver of crop loan as it would be a big burden on the state treasury.

“The Union government cutting down refinance for farm loans by the cooperative sector and directing Apex banks to deposit Statutory Liquidity Ratio money in National Security Schemes has affected cooperative institutions especially during a drought. Even the IT initiative to deduct 10% TDS from deposits earning over Rs 10,000 interest annually has made cooperative deposits less attractive,” he added.

Till last year, the Union government used to refinance 50% of farm loans through NABARD and the cooperative sector used to lend interest free short term loans to farmers. However, the Centre has decided to cut the refinance from 50% to 40%. This curtailed the lending power of cooperative institutions by Rs 1500 crore. Besides, a direction to the Apex bank for depositing SLR with National Security Schemes has blocked another Rs 3000 crore for the cooperative sector, Mr Mahadeva Prasad said.

The major decision comes at a time when farmers are facing hardship due to severe drought conditions in 136 taluks across the state. The farmer suicides have become a big headache for CM Siddaramaiah who has been facing criticism within and outside the party.

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