Kumaraswamy's Farm Loan Waiver Promise May Widen Gap Between JD(S) and Congress

Chief Minister H D Kumaraswamy said that at Saturday's cabinet meeting, approval has been given to waiving existing crop loans up to Rs 1 lakh borrowed from the cooperative sector.

Bengaluru: Karnataka Chief Minister H D Kumaraswamy had promised farm loan waiver during the election campaign. By a quirk of fate with just 38 MLAs, he became the CM a month ago. The BJP which lost the power to him in just 56 hours is now after Kumaraswamy demanding that he should fulfil his poll promise. And Deve Gowda’s son who is running a shaky coalition government with the Congress is in a fix.

As a part of the JD(S) election manifesto, Kumaraswamy had announced that the party would waive off all the debts of farmers, including the loans given by nationalised banks, if he was voted to power. Perhaps Kumaraswamy himself did not have much hope that his party would form the next government when he made this “impossible promise”.

According to state government sources, they need over Rs 53,000 crore to clear off the debts of farmers in cooperative and nationalised banks. The state finance ministry officials maintain that waiving off such a huge amount can be detrimental to the fiscal management of the state and have conveyed the same to the new CM.

Kumaraswamy had set a deadline of 15 days after coming to power to fulfil his promise and he has already completed almost a month in office. His major alliance partner Congress with 80 MLAs is not enthusiastic about the farm loan waiver, claim some party insiders.

“Both the JD(S) and the BJP had promised loan waiver. But the Congress did not. Last year the Siddaramaiah government had waived off farm loans up to Rs 50,000 per farmer. But we lost the elections. If we agree to Kumaraswamy’s loan waiver, the JD(S) may get the full credit. Because of that, our leaders are carefully assessing it,” said a senior Congress MLA.

Kumaraswamy has been evasive about loan waiver and officially maintaining that he will not go back on his word. Speaking to News18, he said, “It is my promise and I will keep my word. I have asked the officials to come out with a plan.” However, he refused to give a date for the loan waiver announcement.

The bruised and wounded BJP which narrowly lost power to Kumaraswamy is insisting that he should keep his promise to the farmers. Its state chief B S Yeddyurappa, who had announced loan waiver minutes after the swearing in had to quit as CM in 56 hours, is now baying for his successor’s blood. Speaking to News18, he said, “It was a promise made by the JD(S). I demand that he must fulfil it. We will wait till his budget. After that, the BJP will launch a state-wide agitation against the JD(S)-Congress government.”

He has also indicated that the central government can’t give any assistance to Karnataka in this regard. “How can the Centre help only Karnataka in farm loan waiver? I don’t think that can happen” he said.

Kumaraswamy presenting a full pledged budget has also become an issue between the JDS and Congress. The former chief minister Siddaramaiah has said that there was no need of a full budget as he has presented a budget in last February. He has suggested that the new government could present a supplementary budget. His advice has not gone down well with Kumaraswamy who is insisting on a full-fledged budget.

The farm loan waiver issue is expected to test the stability and cohesiveness of the JDS – Congress government in Karnataka.