The Hindu : Karnataka / Bangalore News : ‘Populist schemes have led to fiscal crisis’

Online edition of India's National Newspaper
Thursday, Jul 19, 2007
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Karnataka

Karnataka - Bangalore

‘Populist schemes have led to fiscal crisis’

Special Correspondent

N. Dharam Singh

BANGALORE: The coalition Government had created a “financial crisis” in the State by implementing populist schemes such as waiving of crop loans and banning sale of arrack and lottery, Leader of the Opposition in the Legislative Assembly N. Dharam Singh said on Wednesday.

Initiating a debate on demands of various departments in the Lower House, Mr. Singh said several cooperative societies and banks had been left with no funds to grant loans to farmers in the kharif season following implementation of the loan waiver scheme. The Finance Department, headed by Deputy Chief Minister B.S. Yediyurappa, had not yet released Rs. 1,550 crore to cooperatives for executing the scheme. A sum of Rs. 750 crore had been released so far. Minister for Cooperation G.T. Deve Gowda himself had stated that the loan waiver scheme had affected the fiscal condition of cooperatives, Mr. Singh said.

With the ban on sale of arrack and lottery, the State exchequer had lost Rs. 1,902 crore and Rs. 780 crore respectively per annum. The hike in salary of government employees had put a Rs. 800-crore burden on the exchequer. With the limited resources, how would the Government mobilise funds for implementation of the Nanjundappa Committee report on regional imbalances, Mr. Singh asked.

The situation on the agricultural front was not impressive, and many farmers committed suicide on account of the wrong policies of the Government. The Agricultural Department had not supplied quality seeds and the required quantity of fertilizers to farmers. A majority of the Government’s assurances remained only on paper, he alleged.

Srinivas Gowda (Congress), a former Agriculture Minister, said farm production in the State remained stagnant over the years. Despite spending crores of rupees on projects, the net irrigated area had not increased. Better irrigation management practices and diversification of crop pattern would help in reviving the sector, he said.

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