Chief Minister Siddaramaiah calls on Union Finance Minister with request to enhance NABARD funding for Karnataka

The Chief Minister brought to the Union Minister’s notice that the Karnataka government has set a target of disbursing short-term agricultural loans of ₹25,000 crore to 35 lakh farmers for the year 2024-25, which will be in jeopardy if credit limit is not enhanced.

Karnataka Chief Minister Siddaramaiah called on Union Finance Minister Nirmala Sitharaman in New Delhi on November 21 and urged her to take immediate steps to enhance Karnataka’s allocation of short term credit limit for Seasonal Agricultural Operations (ST-SAO) at concessional rate of interest by NABARD for 2024-25. The credit limit for Karnataka has been slashed by 58% compared to last year.

The Chief Minister brought to the Union Minister’s notice that the Karnataka government has set a target of disbursing short-term agricultural loans of ₹25,000 crore to 35 lakh farmers for the year 2024-25, which will be in jeopardy if credit limit is not enhanced.

For the year 2023-24, NABARD had sanctioned SAO concessional limit of ₹5,600 crore. For the year 2024-25, as against the applied limit of ₹9,162 crore, NABARD has sanctioned SAO concessional agricultural loan limit of only ₹2,340 crore, which is 58% less compared to last year.

“Through the short-term co-operative credit structure, during the year 2023-24, short term agricultural loans of ₹22,902 crore have been disbursed in the State. The Karnataka State Co-Operative Apex Bank Limited has requested and sent a proposal to NABARD to sanction SAO limit of ₹9,162 crore for the year 2024-25 on behalf of Short Term Co-Operative Credit Structure,” he said in a requisition submitted to Ms Sitharaman.

“NABARD has told us that the reason for the reduced limit this year is because RBI has allocated less under the General Line of Credit,” he pointed out in the requisition.

He further said that Karnataka has received very good monsoon rains and the farmers are demanding enhanced disbursement of SAO loans for their agricultural co-operations. “The drastic reduction in sanctioning SAO loan limit to Karnataka will drastically hamper the disbursement of short-term agricultural cooperation loans in the State for the year 2024-25. In view of above facts, please direct NABARD and RBI to enhance short-term agricultural loan limit for the year 2024-25 in the interest of farmers, and ensure normal food grains production in Karnataka,” the letter stated.

Mr Siddaramaiah went to Delhi on November 20 night. He met the Union Finance Minister on November 21. He was accompanied by State Agriculture Minister N. Cheluvarayaswamy, Urban Development and Town Planning Minister Byarati Suresh and his political secretary N. Govindaraju.