The BJP manifesto for the upcoming elections in Karnataka was announced on Friday, May 5, at Bengaluru. Addressing the citizens during the launch, state party President, B S Yeddyurappa expressed the visions and goals the party will work towards, if elected to power in the state. One out of the many takeaways from the manifesto was the party promising to waive off farmer loans of nationalised banks in the future. While a part of this plan has already been implemented by the Siddaramaiah government, that holds power in the state right now, by waiving off co-operative bank loans for farmers, the additional burden of adding nationalised banks into this list, may not be the smartest of decisions, according to experts in the field.
In an exclusive conversation with Asianet Newsable, Mr. Mohandas Pai, Chairman of Manipal Global Education & former CFO of Infosys, claimed that this move from the BJP's manifesto may most likely affect several aspects financially, in the future. According to Mr. Pai, the lower class farmers almost always do not benefit from these loans, and the ones that do, are those from the higher class, well-to-do farmers, and thus will not benefit the sector of farmers, who are indeed in debt or need of loans to flourish.
Elaborating on the several financial aspects, Mr. Pai stated that a loan, once applied for and approved by the bank, is provided for by the government alone, and if a part of these loans, in the name of farmers, are waived off from nationalised banks too, it will clearly show in the downfall of the total revenue.
Concluding his observations, Mr. Pai claimed that, while the government will be immensely affected by this step, if put into action, the banks, which ideally thrive on the interest income from the loans, will not be pinched. This is simply because, as pointed out before, the onus of paying these loans is taken up by the government solely.
On a side note, Mr. Pai ended by plucking out a miscommunication between the state and national BJP members, expressing that if the state party administered the manifesto plan, the Union government too, would definitely bear the brunt of it, along with the state government's fiscal budget and financial scenario on a whole, to say the least.