Karnataka govt to write off Rs25,000-cr farm loans, hike fuel tax

Petrol price will be increased by Rs1.14 per litre and that of diesel by Rs1.12 per litre, Kumaraswamy said while presenting the state budget for Karnataka.

The tax rate on petrol will be increased to 32 per cent from 30 per cent while that on diesel will be raised to 21 per cent from 19 per cent at present, he said.

In his maiden budget, Kumaraswamy hinted that the loan waiver will be for farmers who have taken loans from all nationalised and co-operative banks. However, he said the loan waiver will be in effect for only those farmers who have defaulted on payments to the banks up to 31 December 2017.

Further, all government officials and officials of the co-operative sector, farmers who have paid income tax for the past three years and “other ineligible” farm loan recipients will be outside the purview of this loan waiver scheme.

“However, even though the people of the state have not blessed a single party government, I have been provided with a good opportunity to form a coalition government and to work as the CM of this coalition. In this background, I had discussions with the government officials, nationalised banks, officers of the co-operative sector and the farmers with regard to the crop loans of the farmers,” he said.

Kumaraswamy said that complete examination of the farmer’s crop loan waiving subject also revealed instances of loans exceeding 40 lakhs of large land holdings farmers.

“In this background, as per the opinion of the farming community that it is not right to waiver higher value crop loan, I have decided to limit the loan amount to Rs 2 lakhs,” he said.

The CM announced that the loan waiver scheme will see a burden of Rs34,000 crore on the state government, overall.

However, even this loan waiver will be done in a phased manner with Rs6,500 crore being earmarked for the purpose in 2018-19 budget.