Fulfilling his election promise, HD Kumaraswamy announces farm loan waiver scheme of Rs 34,000 crore in maiden budget


Karnataka Chief Minister HD Kumaraswamy on Thursday presented his JD(S) and Congress coalition government’s maiden Budget for fiscal 2018-19 announcing a loan waiver scheme for farmers, at a cost of Rs 34,000 crore. Waiving farmers’ loan was a key poll promise of his party, the JDS.

Kumaraswamy, who also holds the Finance portfolio, presented full-fledged Budget for 2018-19 in the Assembly despite being adviced to present a Supplementary Budget by the Congress Legislature Party leader and former Chief Minister Siddaramaiah, reported IANS.

The former CM had presented the Budget for this fiscal on February 2016. Though, Kumaraswamy secured Congress President Rahul Gandhi’s approval to present the full Budget as the head of the JD(S) and Congress coalition government.

The total budget is Rs 2.13 lakh crore, of which 16% will be set aside for the loan waiver. Although, the government will cap limit at loans of Rs 2 lakh.

“I have decided to waive all defaulted crop loans of farmers up to December 31, 2017, in the first stage. 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,” ANI quoted Kumaraswamy.

In other major announcements, Kumaraswamy announced that excise duty will be increased to generate funds for the farm loan waiver. He proposed an increase in petrol prices by Rs 1.14 and diesel by Rs 1.12. The Karnataka chief minister also proposed an increase in tax on consumption of electricity, from 6% to 9%.

Kumaraswamy’s JDS, 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.

On Wednesday, Gandhi had taken to twitter to say that 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.

In this year’s May assembly elections, no single party was able to secure an absolute majority, prompting the Congress and the JDS to join hands to keep ‘communal’ BJP at bay.