BENGALURU: As of December 31, 2017, the collective debt of farmers in Karnataka was about 10% of the state’s Gross State Domestic Product (GSDP) in 2017-18 and 57% of the budget outlay for 2018-19, indicating the severity of the crisis at hand, even as the government works out modalities for a farm loan waiver.

According to data obtained from the State Level Bankers’ Committee (SLBC), about 85 lakh farmers’ accounts have a debt of more than Rs 1.21 lakh crore in agriculture loans to 45 banks with some of the nationalised banks having maximum exposure. The banks are yet to compile the figures for the last quarter of the previous financial year and the first quarter of this year.

Agriculture loan includes all kinds of borrowings for the agricultural activity including allied activity. And, of the said amount, Rs 59,653 crore is short-term (crop) loan, which has to be paid off in full along with the interest when the term ends, while Rs 61,964 crore is term loan, which can be paid over a period of time in instalments.

Of these, Canara Bank, the State Bank of India, Syndicate Bank together have an exposure of Rs 43,854 crore, while two co-operative banks, the Pragathi Krishna Grameena Bank and the Karnataka State Co-operative Apex Bank collectively reporting an outstanding amount of Rs 22,304 crore. Just these five banks have an exposure of more than 54% of the total amount.

The government has now sought details of the date of borrowal, the reason for borrowing and the total outstanding amount of each farmer, which is likely an exercise that will take at least a few weeks if not months. And, even after this process is complete, the government, as announced earlier, is targetting to waive off Rs 53,000 crore, which will still be lesser than just the outstanding crop loans with the banks.

That said, finance experts point out that it will still be too much of a burden on the exchequer and that a populist move could come to the cost of some cuts in the spending in other sectors.

“The chief minister said that he would ‘somehow’ find the money without compromising on other major programmes. He said that among things he plans is to not travel by special flights or helicopters, all of which appear to be over-ambitious,” Maruti Manpade, a farmer leader from north Karnataka said.

Farmers, while welcoming the waiver—whenever it may happen—have been arguing that the government needs to work on long-term solutions that help farmers become self-sufficient. “The ultimate goal of any government must be to allow a farm to produce without taking loans. The idea of making them debt-free through waivers is not just unsustainable for the farming community but also for the government, as it will be placing a huge burden on taxpayers,” Prof Vijoo Krishnan, joint secretary, All-India Kisan Sabha (AIKS), says.

