Karnataka: Kumaraswamy announces farm loan waiver scheme of Rs 34,000 crore in first budget

Karnataka Chief Minister HD Kumaraswamy on Thursday announced a Rs 34,000 crore loan waiver for farmers. The waiver is capped at Rs 2 lakh. Kumaraswamy made the announcement while presenting the first budget of the newly-formed coalition government of the Janata Dal (Secular) and the Congress.

Agriculture

The total budget for 2018-2019 is Rs 2.13 lakh crore, of which 16% will be set aside for the loan waiver scheme.

“I have decided to waive all defaulted crop loans of farmers up to December 31, 2017, in the first stage,” Kumaraswamy, who also holds the finance portfolio, was quoted as saying by ANI. “Farmers who repaid the loan within time, as an encouragement to the non defaulting farmers, I have decided to credit the repaid loan amount or Rs 25,000, whichever is less.”

Kumaraswamy also announced the formation of a farmers’ advisory committee and allocated Rs 50 crore for a zero-capital natural farming project, modelled on a similar project in Andhra Pradesh. The government will focus on making farming productive and ensuring they get good prices, he said. To this effect, he announced a grant of Rs 5 crore for start-ups to come up with innovations in agriculture.

Increase in taxes

The farm loan waiver will be funded by raising the excise duty, the chief minister said, according to The New Indian Express.

The budget proposes an increase in the price of petrol by Rs 1.14 and of diesel by Rs 1.12. It also proposes the tax on consumption of electricity to be increased from 6% to 9%, according to The Times of India.

Education

The Kumaraswamy government allocated Rs 26,800 crore for the education department. This will include a package to repair schools, beginning new English-medium schools, setting up new monitoring mechanisms in the institutions.

Sports will be introduced as a subject in higher classes, the chief minister said. He also announced that a university for sports will be set up in Tumakuru and a Homeland Security University in Shivamogga district. The government will also set aside Rs 3 crore for a tourism university at Hampi.

Tourism

Kumaraswamy announced that Rs 20 crore will be allotted to maintain the environment in Belur, Hampi and Vijayapura. The government also plans to introduce two-year diplomas for tour guides.

He added that the government will also explore tourism opportunities at Ramanagara, his constituency, besides setting up an arts and crafts village. Rs 80 crore will be earmarked for investments in the industry.

Welfare

The budget allocates Rs 350 for Chief Minister’s Matrushri scheme. Under this scheme, Rs 1,000 will be transferred monthly to the bank accounts of pregnant women three months before and after the delivery, he said, adding that it will be implemented from November 1.

The government has also allotted Rs 5 crore for research on people with 21 types of disabilities.

He also reduced the provision for free rice under former Chief Minister Siddaramaiah’s Anna Bhagya scheme to 5 kg from 7 kg.

Kumaraswamy’s Janata Dal (Secular), in its election manifesto, had promised to waive all farm loans, totalling Rs 53,000 crore, within 24 hours of taking charge of the government. However, several reports over the last few months have claimed that the Congress held up the process.

In May, the chief minister met representatives of farmers from 30 districts to seek suggestions on the loan waiver scheme and promised to announce the farm loan waiver scheme in 15 days. He had claimed that he was trying to convince the Congress.

On Wednesday, Congress President Rahul Gandhi said the budget would focus on farm loans. “This budget is an opportunity for our government to make Karnataka a beacon of hope for farmers across India,” he wrote on Twitter.

Coalition government

Following the Assembly election in mid-May, the Bharatiya Janata Party’s BS Yeddyurappa was initially sworn in as the chief minister but resigned two days later as his party, despite being the largest, did not have the numbers to prove its majority. The Congress and the JD(S) forged a post-poll alliance to form the government, and JD(S) Karnataka chief HD Kumaraswamy took oath as the chief minister on May 23.