Karnataka Agricultural Policy - Institute for Social and Economic ...

Karnataka Agicultural Policy 2006
The Cooperative Banking sector in Karnataka is providing credit at a concessional rate of 4 per cent
per annum, but at the same time and for the same purposes the Commercial banks charge higher rate
of interest. This discrepancy will be removed by discussing with the authorities.
Keeping in view the decline in the profitability of agriculture and increasing distress and
indebtedness of the farmers, the government will consider providing support to the banking system
for reducing the rate of interest for crop loans and other loans to 4 per cent per annum.
There is a need for Distress ‘hot-spots’- moratorium on debt recovery till reasonable profit margins
in agricultural operations are restored. The debt recovery may be staggered in easy instalments. For
this purpose, liquidity support will have to be provided to the localized banks like RRBs/
Cooperative Banks, etc.
The banking system needs to develop crop business potential for financing projects for improving/
modernization of markets, storage including cold storage facilities, rural based transport operators,
etc.
Credit Counselling will be established where severely indebted farmers can be provided with a debt
rescue package of information in order to get out of the debt trap, and thereby save themselves from
committing suicide.
Promote credit and insurance literacy through the ‘Every Village A Knowledge Centre’ movement.
For this purpose, extensive use of radio and TV will be used.
Credit provided for bore wells will be carefully monitored, both in terms of availability of
groundwater and the use of credit.
Adequacy and timeliness of credit is important than cost of credit. Special efforts will be made to
improve access to institutional credit in poverty stricken tribal areas. Emphasis will be on credit flow
rather than on making available subsidy/concessions.
The government of Karnataka constituted a Committee on 6th May 2005, to examine the
recommendations of the Task Force (Chairman Shri Viswanathan)and give its views for
implementation in the state. The recommendations will be viewed.
In Karnataka, the Syndicate Bank sponsored Regional Rural Banks (RRBs) viz. Bijapur,
Malaprabha, Netravati and Varada Grameena Bank and Canara Bank sponsored RRBs Viz.,
Tungabadra, Chitradurga, Kolar and Sahayadri GBs have been amalgamated with effect from 12
September 2005. The new banks have been named Karnataka Vikas Grameena Bank and Pragati
Grameena Bank respectively, with Head Office at Dharwad and Bellary. In May 2006, State Bank of
Mysore formed Kalpatharu Cauvery GB with Head Office at Mysore. Such amalgamation would
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