The total quantum of Karnataka’s flagship crop loan waiver scheme has finally settled to around ₹18,000 crore, which is way below the initial claim of ₹43,000 crore when the scheme was announced in July 2018. This helped speed up the process of waiver and close it in one go.
While the government has already paid close to ₹8,760 crore to 18.7 lakh farmers’ accounts in the cooperative sector, it is set to pay about ₹8,550 crore to 9.8 lakh accounts in commercial banks, which adds up to around ₹17,310 crore.
Numbers down
Though the total crop loans of all nature in Karnataka was estimated to be around ₹46,000 crore — ₹36,000 in commercial banks and the rest in cooperative sector — strict guidelines were set to prevent a farmer from seeking benefits from both the sectors and one family getting more than one waiver. Besides setting a cut-off date of April 1, 2009 to be eligible for farm loan waiver, tax payers and government officials, among others, were kept out of the scheme, bringing down significantly the number of beneficiaries resulting in savings to the State exchequer.
The loan waiver entailed writing off up to ₹1 lakh loan in the cooperative sector, up to ₹2 lakh in the commercial bank sector, and an incentive of ₹25,000 to those whose loan accounts have been regular in commercial banks. During processing of the application, officials found that there were 21.8 lakh loan accounts in the commercial sector with a total loan amount of ₹36,000 crore.
Regular loan accounts were about 7 lakh, and overdue and restructured loans were 5.8 lakh and 6 lakh, respectively. However, after de-duplication work to identify the correct beneficiaries, the number of eligible beneficiaries drastically came down. The number of eligible regular accounts dropped to 3.11 lakh, number of overdue accounts and restructured loans dropped to 2.76 lakh and 2.82 lakh, respectively.
Sources in the Chief Minister’s Office said: “The fact that the scheme size came down from about ₹36,000 crore to around ₹18,000 crore helped. Sufficient money to cover this has been earmarked in the budget.”