Chief Minister Siddaramaiah, on Friday, expressed anguish over the Centre slashing the short-term loans allocated to farmers under NABARD by 58% saying it would push the farmers into the clutches of moneylenders who extract exorbitant rates of interest on loans.
“The reduction in subsidised loans to farmers will negatively impact food production across the country,” said Siddaramaiah, while speaking to reporters in Delhi.
The chief minister, along with the Deputy Chief Minister D.K. Shivakumar, met Prime Minister Narendra Modi drawing his attention to the problems faced by the state.
In his letter to PM Modi, the CM stated that the NABARD cutting down the quantum of short-term agriculture credit (to 37 lakh farmers in the state) from Rs 5,600 crore sanctioned in 2023-24 to Rs 2,340 crore in 2024-25, a steep cut of 58%, had caused panic among the farmers.
"This move will impact the cost of finances to the farmers. If the state government provides additional interest subvention, the financial situation of the state would take a beating," said the chief minister urging the PM to direct the finance ministry to rectify the issue and help farmers avail agriculture soft loans.
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"Earlier, the NABARD used to give loans to farmers at 4.5 % interest. The Karnataka government used to absorb the interest and offer interest-free loans to farmers. Now, the central government is mandating loans from nationalised commercial banks, which charge a higher interest rate of 10%. This will benefit the banks, but not the farmers," rued Siddaramaiah.
Highlighting the injustice meted out to Karnataka by the 15th Finance Commission, Siddaramaiah said, "Despite a promise of Rs 5,000 crore for the Upper Bhadra Project, not a single penny has been released. Similarly, no funds have been allocated for the Peripheral Ring Road. These omissions have resulted in a loss of Rs 11,000 crore to the state. We have raised concerns before the PM."
Expressing dissatisfaction over the delay in granting approvals for key projects like the Mahadayi and Mekedatu project, Siddaramaiah demanded to know why the Karnataka BJP MPs, 'son of the soil' Kumaraswamy and Rajya Sabha MP H.D. Devegowda were silent on the issue.
In his letter to the PM, Siddaramaiah reminded Modi of the promise made by the finance minister in the Union Budget 2023-24, of providing funds for the Upper Bhadra Project under the accelerated irrigation benefit programme. He sought the PM's immediate approval to ensure irrigation in the parched lands of central Karnataka.
Karnataka, an arid state needs to develop its irrigation potential and is meeting its needs with its own resources. However, the pending project clearances by the Jal Shakti Ministry and the Ministry of Environment, Forests & Climate Change are delaying the projects, noted the chief minister.
"Two projects need your urgent attention, the Mekedatu Balancing Reservoir on the Kaveri River and the Kalasa Banduri project on the Mahadayi River. The former needs approval from the Jal Shakti Ministry as well as environmental clearance. The latter is at an advanced stage for wildlife clearance. Kindly direct the two ministries to expedite clearances for these projects," said the CM in his appeal to Modi.
Batting for Bengaluru, as the tech and innovation capital of the country, one of the fastest growing cities of the world that is also among the top three contributors to the country’s GDP, Siddaramaiah sought funds for infrastructure development and to decongest the city.
The chief minister shared his plan for 13 city corporations in tier-2 cities which are in need of upgradation.
"The Karnataka government has allocated Rs 2,000 crore under the Mahatma Gandhi Nagar Vikas Yojana over the next three years. However, this allocation is woefully inadequate and I urge you to direct the Ministry of Urban Development to provide Rs 10,000 crore for these cities under AMRUT or any other scheme," said Siddaramaiah.
Reiterating his demand to set right the anomaly in the recommendations made by the 15th Finance Commission (which lowered the state's share in the devolution of taxes by 1 %), Siddaramaiah said the finance ministry should at least consider giving two kinds of special grants to the state: one, Rs. 5,495 crore to compensate for the reduction in our share, two, special grant of Rs. 6,000 crore for Peripheral Ring Road and for rejuvenation of water bodies.
"Since we are still in the period of the 15th Finance Commission, I would again request you for additional grants. Also, following the 16th Finance Commission, the ministry to ensure that the states contributing a larger share to the central taxes are not punished by severe cuts in share of the central taxes," said Siddaramaiah.
