E-Paper
Siddaramaiah call on Sitharaman to request reversal of Nabard’s 58% credit cut
Siddaramaiah said that NABARD’s sanction of only ₹2,340 crore for the upcoming year as opposed to ₹5,600 crore allocated for 2023-24
Chief minister Siddaramaiah met Union finance minister Nirmala Sitharaman in New Delhi on Thursday to appeal for a reconsideration of the drastic reduction in the state’s agricultural credit limit by the National Bank for Agriculture and Rural Development (NABARD) for 2024-25. He submitted a memorandum highlighting the severe impact that the cut can have on farmers and food grain production in Karnataka.
In the letter, Siddaramaiah said that NABARD’s sanction of only ₹2,340 crore for the upcoming year is a sharp 58% dip from the ₹5,600 crore allocated for 2023-24. The development followed despite Karnataka applying for ₹9,162 crore to meet its target of disbursing ₹25,000 crore in short-term agricultural loans to 35 lakh farmers in 2024-25.
“We wish to bring to your notice that the government of Karnataka has set a target of disbursing short-term agricultural loans of ₹25,000 crore to 35 lakh farmers for the year 2024-25,” Siddaramaiah said. “Through the short-term cooperative credit structure during 2023-24, short-term agricultural loans of ₹22,902 crore have been disbursed in the state.”
The chief minister explained that the Karnataka State Cooperative Apex Bank Limited had submitted the ₹9,162-crore proposal to NABARD to ensure adequate credit for the state’s farmers. However, NABARD drastically reduced the allocation, attributing the cut to lower funding from the Reserve Bank of India (RBI) under the General Line of Credit.
“NABARD has told us that the reason for the reduced limit this year is because the RBI has allocated less under the General Line of Credit,” Siddaramaiah said.
The CM warned that the reduction will disrupt agricultural operations in Karnataka, particularly as farmers have benefited from a good monsoon this year and require greater financial support.
“Karnataka has received very good monsoon rains, and the farmers are demanding enhanced disbursement of seasonal agricultural operations (SAO) loans. The drastic reduction in the SAO loan limit to Karnataka will severely hamper the disbursement of short-term agricultural loans in 2024-25,” Siddaramaiah added.
The memorandum outlined how the reduced credit allocation can impact Karnataka’s agricultural productivity and the livelihoods of its farmers. Siddaramaiah emphasised that concessional loans are vital for small and marginal farmers who rely on cooperative institutions to access credit for seeds, fertilisers, and other inputs.
“The major reduction in sanctioning the SAO loan limit to Karnataka will drastically hamper the disbursement of short-term agricultural cooperation loans in the state for 2024-25. In view of the above facts, please direct NABARD and RBI to enhance the short-term agricultural loan limit for 2024-25 in the interest of farmers and to ensure normal food grain production in Karnataka,” Siddaramaiah urged Sitharaman.
Siddaramaiah was joined by agriculture minister N Cheluvarayaswamy, urban development and town planning minister Byarati Suresh, and political secretary N Govindaraju during the meeting at North Block. The delegation underscored the importance of restoring Karnataka’s credit allocation to support its agricultural economy.
Siddaramaiah’s appeal stressed the urgency of resolving the credit shortfall, particularly given Karnataka’s success in disbursing ₹22,902 crore in agricultural loans in 2023-24. The chief minister called on Sitharaman to ensure that NABARD and the RBI prioritise Karnataka’s case and enhance the credit limit.
HT reached out to the Union finance ministry that did not respond to request for comment.
