The Hindu : Farmers yet to benefit from falling interest rates: Krishna

Online edition of India's National Newspaper
Friday, Feb 13, 2004

Karnataka

Karnataka

Farmers yet to benefit from falling interest rates: Krishna

By Our Special Correspondent

BANGALORE, FEB. 12. Though interest rates had fallen, it was a matter of concern that the benefit was yet to reach the farmers because of restrictions imposed by the Centre and the margins in the credit structure, the Chief Minister, S.M. Krishna, said in the Legislative Assembly today while announcing the scheme to extend loans to farmers at 8.5 per cent interest from District Central Cooperative banks.

Mr. Krishna, who was replying to the discussion on the budget proposals for 2004-05, commended the district cooperative banks of Hassan, Kodagu, and Dakshina Kannada for providing loans to farmers at nine per cent interest and said that this model would be extended so that farmers got loans at 8.5 per cent interest from April 1. The banks concerned would be extended assistance under a scheme being formulated, Mr. Krishna said.

He also agreed to extend the benefit of waiver of penal interest on loans to all coffee growers who repaid the principal. At first the Chief Minister announced the benefit for small and medium coffee growers alone, but decided to extend it to cover all growers following a plea by B.B. Shivappa. Mr. Krishna taunted the Union Ministers who had visited the coffee growing areas, but chose to provide relief to tea growers in the budget.

Other announcements made by Mr. Krishna related to extension of the scheme exempting diesel purchased by fishermen in coastal areas from sales tax and raising the incentive amount for Rajiv Yuva Shakti centres from Rs. 5,000 to Rs. 15,000 if a centre had more than 100 members.

As far as the plea for relief to coconut and areca growers was concerned, Mr. Krishna agreed that they were also in difficulties, but said he would provide relief to them after the party came back to power.

The Leader of the Opposition, Jagadish Shettar, who referred to the absence of a reference to the payment of arrears of subsidy to small-scale industries, said the amount could be adjusted by exempting them from payment of sales tax. Mr. Krishna said steps would be taken to release the subsidy through bonds.

He said there was no dearth of funds for providing drinking water. A minimum of Rs. 1 crore was kept at the disposal of each district and instructions would be issued to the deputy commissioners to ensure the utilisation of the amount.

Responding to point made by P.G.R. Sindhia of the Janata Dal (S), Mr. Krishna said the Government would see that its decision to permit operation of private buses within a radius of 20 km from district headquarters was implemented in such a way that it did not affect the profitability of the Karnataka State Road Transport Corporation.

The BJP members took exception to the absence of any reference in the reply to the implementation of the Nanjundappa committee report on regional imbalances and what they termed discrimination in the payment of crop insurance and staged a walkout.

The House later approved the Karnataka Appropriation Bill, the vote-on-account, and supplementary estimates for 2003-04.

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