BENGALURU : H.D.Kumaraswamy, Karnataka’s caretaker chief minister, on Wednesday, announced that the Debt Relief Act had come into effect on Tuesday, that would help ease the financial burden of the poorer sections of society. Kumaraswamy said that he was happy to bring this bill to life even when stepping down from the top post after the Congress-Janata Dal (Secular) or JD(S) coalition lost the floor test.

“This would benefit landless labourers, small farmers and poorer sections of the society," Kumaraswamy said in Bengaluru on Wednesday.

The coalition government had taken the ordinance route to help ease the financial burden on poorer sections, who were not eligible to avail the benefits of the farm loan waiver. The debt relief act could also help Kumaraswamy earn some good political currency across the state that could widen the scope of the south Karnataka focused JD(S).

Kumaraswamy said that the act was a “one time relief" for all those who have availed loans from pawn brokers, money lenders and other informal sources of credit. “There is no upper limit," the caretaker chief minister added.

Kumaraswamy held meetings with officials asking them to execute their duties effectively as the political instability is likely to continue in the state.

Debtors, whose annual income does not exceed Rs1.2 lakhs per annum, can take any relevant document and submit it before the Assistant Commissioner of each district in the next 90 days to avail the benefits of the scheme, he said. Kumaraswamy added that even those who do not have documentation can also avail benefits. He, however, did not clarify on how the scheme would differentiate between genuine and fabricated claims.

Kumaraswamy said that the lenders would not be entitled for any compensation as the latter would have “already earned enough through interest".

The government’s decision is targeted at a large section of agricultural community who depend on non-institutional sources of credit, whose interest rates and collateral are much higher compared to institutional sources.

Kumaraswamy had modelled the debt relief bill (now act) on two earlier bills, passed in 1976 and 1980, to make its case. Though the debt relief bill of 1980 was challenged in the Supreme Court, the decision was upheld in 1992. Karnataka is facing consecutive droughts and acute drinking water shortage, that has led to the pile up of debt burden on the farmers and others dependent on agriculture. Kumaraswamy has waived off almost Rs13,000 crore loans while his predecessor, Siddaramaiah had announced a farm loan waiver of Rs8,165 crore. Several state governments have used short term interventions like farm loan waivers to tackle piling up debt of the farming community, that has suffered more due to plummeting prices of produce, no minimum support price, failing rains, lack of irrigation and high pressure on existing holdings among other factors.

Kumaraswamy said that there was no allocation for the scheme as there was no upper limit.





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