Karnataka sops could go off the rails
When Karnataka chief minister Siddaramaiah announced a Rs 8,165 crore crop loan waiver three months ago it was widely seen as a move to capitalize on it to benefit the ruling Congress party in the 2018 Assembly elections. However, with the elections just a few months away, reports say that the government has not released any money at all and many cooperative banks are refusing repayment by farmers of old loans which not only increases the interest burden on farmers but also affects farmers’ chances of availing fresh loans and crop insurance. Indeed, there is a stipulation that until old loan accounts are closed and renewed they cannot borrow afresh. This fact will also impact their crop insurance for the rabi season which has already begun with most districts receiving excess rain. All this could prove to be to the benefit of the rivals of the Congress since loan waiver was a major trumpcard which was slated to influence rural voter voting pattern. The Siddaramaiah government is in a dilemma because even when the farmers are allowed to take fresh loans, the banks will release funds in stages which could jeopardize the gains for the Congress government.
Farmers generally avail fresh loans and pay the crop insurance premium for notified crops using a portion of this. If the loan gets delayed, many of them will not be able to pay the premium. The last date for the rabi crop insurance is November 15. The ability of the cooperative banks to refinance has been impacted by the tight finance policy of the National Bank for Agriculture and Rural Development (Nabard). Yet, all is not lost for the Congress. Of the 22.27 lakh farmers, 11 lakh had availed loans before the announcement of the waiver and have repaid their loans and got their accounts renewed to receive fresh loans which could benefit from the loan waiver scheme.
The Siddaramaiah government has another major sop to woo the voters—the Indira canteens on the lines of Amma canteens in Tamil Nadu---which will cater to the poorer sections with heavily subsidized breakfast and meals. In the 2017-18 budget, Siddaramaiah had announced the establishment of 198 Indira Canteens, and had set aside Rs 100 crore for the project. The Karnataka government has now decided to add 300 more canteens, which will be located in all district headquarters and would be inaugurated by the end of December or early January. Each such canteen is planned to serve 500 people per meal per day. If these canteens are run well, they could bring dividends for the government but in a general atmosphere in which schemes are poorly implemented, there can hardly be any guarantee of smooth implementation.