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Karnataka govt. has announced the launch of Crop / Farm Loan Waiver Scheme (Karj Mafi Yojana) for farmers. In the 1st phase of Karz Mafi scheme, govt. will waive off all the crop loans upto Rs. 2 lakh of defaulter farmers till 31 December 2017. This Farm / Crop Loan Waiver Scheme will cost Rs. 34,000 to the state government.
Even the state govt. is going to repay Rs. 25,000 or full loan amount (whichever is lower) to all the farmers who have repaid their loans on time. This repayment amount will serve as encouragement for all non-defaulting farmers.
Update – Karnataka Farmers Loan Waiver Scheme for Nationalised Bank loans is started on 25 August 2018.
The state govt. has earmarked Rs. 6,500 crore for this scheme in 2018-19 budget. Govt. will issue clearance certificates to the defaulter farmers whose loans have been waived off. This will make farmers eligible for taking a new loan from banks.
Karnataka Farm Loan Waiver Scheme Eligibility
The state govt. fixes the maximum principal loan amount to be waived off at Rs. 2 lakh. In his maiden budget speech, CM gives hints that the farm loan waiver scheme will be applicable on the loans taken from Nationalised and co-operative banks. However, there are certain restrictions on who could avail this loan waiver scheme benefits:-
- Families of officials of the cooperative sector are not eligible.
- All the families of government officials and other ineligible farm loan recipients are not allowed to take the benefits of this scheme.
- Farmers who have not paid income tax for past 3 years are also not eligible.
CM HD Kumaraswamy announced that a new Farmers Advisory Committee will be formed. He also allocated Rs. 50 crore for zero-capital natural farming project (on lines of AP Model).
Implementation of Karnataka Farm Loan Waiver Scheme
This would be done by increasing taxes and rising the prices of petrol and diesel. Govt. says that the Excise Duty will be increased to generate funds for Farm Loan Waiver Scheme.
Karnataka Budget 2018-19 proposes an increase in petrol prices by Rs. 1.14 and diesel by Rs. 1.12. Moreover, the budget also proposes that the tax on electricity consumption will also be increased from 6% to 9%.
Previously, Siddaramaiah govt. had started a loan waiver scheme for farmers who have taken loans from co-operative banks with an allocation of Rs. 8,165 crore. Out of this amount, Rs. 4,165 crore have already being paid to the farmers. The existing govt. will pay the remaining amount separately to all such co-operative banks.