Loan waiver seen as Karnataka Congress poll-vault plan

Jun 22, 2017, 08:14
Loan waiver seen as Karnataka Congress poll-vault plan

The Centre or states take over the liability of farmers and repay the banks.But only certain loan types, categories of farmers or loan sources may qualify.

Over 22 lakh farmers who availed up to loans of Rs 50,000 will be benefited by the announcement.

Even without factoring in the loan waivers, the gross state development loans issued by the state governments are to rise from Rs 3.8 lakh crore in 2016-17 to Rs 4.5 lakh crore in 2017-18, according to an Icra estimate.

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A loan waiver just before election year should paint the Congress in good light in the state.

Siddaramaiah said that exposure to cooperative banks is only 20 percent whereas the rest of the farm loans have been taken from grameen, nationalized and other banks, which are under the jurisdiction of the central government.

Bank stocks, including Karnataka Bank and Federal Bank, continued to remain under pressure falling by up to 2 per cent today after the Karnataka government announced crop loan waiver.

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Siddaramaiah also said the Centre will now have to come to the rescue of farmers by waiving the loan obtained by them from nationalised and rural banks. With this, credits worth Rs 8165 crores will be deferred, which will profit around 22,27,506 farmers all around the state.

Stringent conditions laid down by the government will make several farmers ineligible for farm loan waiver says Congress. We have been fighting for the farmers' cause since last two years but the government is not bothered about addressing their grievances.

Claiming victory over the ruling Congress, main opposition Bharatiya Janata Party (BJP) urged the government to increase the loan waiver limit up to Rs 1 lakh. A sharp slowdown in lending to the farm sector could shave 1 percentage point off the system loan growth, it estimates. Prime Minister Modi and BJP national president Amit Shah would be forced to focus their time and energy to retain Gujarat than win Karnataka.

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The farmers, to some extent can heave a sigh of relief following the decision taken by Siddaramaiah government. One of the condition was that farmers with four wheelers will not be eligible for the advance loan, This norm has been revised and to say that farmers own who any vehicle up to Rs 10 lakh will be eligible for this instalment.

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