Bengaluru: Has Karnataka chief minister H.D. Kumaraswamy taken on more than he can chew by promising to waive all the loans taken by farmers, weavers and, sericulturists in the state?
While on winning the vote of confidence in the legislative assembly on Friday he said he would discuss the matter with his coalition partner, the Congress, before taking a decision on the loan waiver, going by official sources, the move could leave the state in a financial crisis if implemented.
Should the government write off loans taken by farmers from state cooperative societies it would have to say goodbye to Rs 38,000 crore and that would be only one component, they reveal. “If the loans taken from commercial banks are added to this, the amount will run up to Rs 80,000 crore. If we factor in loans taken by cotton and silk weavers, and sericulturists as well the amount involved will touch Rs 90,000 crore. If this huge amount of money is waived off the state could plunge into a severe financial crisis,” warns an officer.
Despite such misgivings, the finance department is collecting data from various states like Uttar Pradesh and Maharashtra on their loan waiver to help Karnataka with its own scheme. “We will study their models first and then fix a period for which the farmers’ loans should be waived. After that we will collect data from commercial banks and societies. So we need at least a month to come up with all the information the government needs,” says an officer.
