BANGALORE: The Union Government has rejected the Karnataka Government's three demands — disbursement of farm loans by commercial banks at 4 per cent interest; waiver of crop loans up to Rs. 25,000 by commercial banks and Rs. 200 crore sought for the Revolving Fund.

A. Ramaswamy, Principal Secretary (Cooperation), told presspersons on Wednesday that the Centre had rejected the Government's proposals on the grounds that it was not possible for commercial banks to disburse loans at 4 per cent interest and waive crop loans. Cooperative societies in the State had been disbursing farm loans at 4 per cent interest. The Government had also waived farm loans up to Rs. 25,000 along with interest. Commercial banks have been disbursing crop loans at seven per cent interest.

He said the Centre had also turned down the Government's demand for Rs. 200 crore for implementation of the market intervention scheme. The State budget (2007-08) had set aside Rs. 200 crore towards the Revolving Fund and it sought Rs. 200 crore from the Centre for implementing the scheme.

A sum of Rs. 1.11 crore had been disbursed to 1,663 families of farmers who were in distress, under the Prime Minister's special package of Rs. 2,689.64 crore.

The package is being implemented since last year to tackle the problem of distress among farmers in the districts of Belgaum, Hassan, Chikmagalur, Kodagu, Shimoga and Chitradurga.

Minister for Energy H.D. Revanna, who is also heading a Cabinet sub-committee on the special package, told presspersons on Wednesday that the Centre had approved 17 works estimated at Rs. 1,208.71 crore.

The Centre would release Rs. 1,568.07 crore in the form of assistance and Rs. 1,121.57 crore as loan. The deputy commissioners of six districts had disbursed Rs. 10,000 each to such families.

Already Rs. 50 lakh each had released to deputy commissioners, he said.

Districts identified

The Centre had identified 31 districts in Andhra Pradesh (16), Maharashtra (6), Karnataka (6) and Kerala (3) for the special package to mitigate distress among farmers over a three-year period. The Centre has launched this programme on a pilot basis.

The package includes debt relief to farmers through waiver of entire arrears of interest and rescheduling of overdue loans, as on June 30, 2006; additional credit flow for providing complete credit cover in the six districts; completion of major, medium and minor irrigation projects.

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