With political parties using farm loan waivers just as a poll sop, the agrarian distress is deepening.
Hours after Chief Minister H.D. Kumaraswamy announced a farm loan waiver of ₹ 34,000 crore, K.C. Bhadraiah, a farmer from Kachigere village in Mandya, committed suicide. Bhadraiah, 60, had a debt of ₹ 5 lakh, and the waiver, announced on July 5, was provided for loans only up to ₹ 2 lakh.
In the last four years, Karnataka has witnessed more than 3,700 farmer suicides. Relief provided by loan waivers is small and temporary as private loans—availed at exorbitant interest rates up to 21 per cent—far exceed those availed from cooperatives and nationalised banks.
The loan waiver announced by the JD(S)-Congress coalition government has triggered a political battle in Karnataka. The BJP has been demanding a “total” loan waiver, including that of private loans, although the BJP-led Central government is against farm loan waivers as a policy. Leader of opposition in Karnataka, B.S. Yeddyurappa, said the JD(S) came to power promising total loan waiver. “But now they are misleading the farmers with a token waiver,” said Yeddyurappa.
The total outstanding farm loans in Karnataka stand at ₹ 1.4 lakh crore. Of this, only ₹50,000 crore was availed from cooperative and nationalised banks. Moreover, of the 75 lakh farmers in the state, only 50 lakh have access to cooperative and nationalised banks. The rest are out of the formal credit system. “The greater burden is the private loan,” said Cooperation Minister Bandeppa Kashempur. “We will soon crack down on the informal credit system that is fleecing farmers.”
This story is from the September 23, 2018 edition of THE WEEK.
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This story is from the September 23, 2018 edition of THE WEEK.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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