In the maiden budget of the Congress-JDS coalition government in Karnataka today, chief minister HD Kumaraswamy announced a farm loan waiver scheme worth Rs 34,000 crore. Farmers whose borrowings are less than Rs 2 lakh will get a waiver of up to Rs 25,000 each. Amid farmer suicides and protests, the loan waiver scheme was promised ahead of the assembly elections.
With the waiver scheme imposing a huge burden on the exchequer, proposals were announced by the chief minister to gain from additional resources. The proposals include an increase in the tax rates on petrol and diesel which will make them costlier by Rs 1.14 and Rs 1.12 a litre, respectively. Tax on electricity consumption was also proposed to be increased from 6 to 9 percent. A hike in additional excise duty on Indian-made liquor by 4 percent was also proposed across the board on all 18 slabs.
Meanwhile, further benefits were announced for farmers. Kuramaswamy said that it was decided to waive defaulted crop loans made up to December 2017 in the first stage. This would facilitate farmers to take new loans and Rs 6,500 crore had been earmarked for the purpose in the 2018-19 budget. To the farmers who had repaid loans on time, the repaid amount or Rs 25,000 (which is lower), will be credited to farmers' accounts.
The families of the government and cooperative sector officials, farmers who have paid income tax in the past three years and other ineligible farm loan recipients were not be included in the loan waiver scheme.