Karnataka Chief Minister Siddaramaiah met with Prime Minister Narendra Modi on Friday and requested the release of over ₹21,000 crore for the State’s development, including ₹10,000 crore under AMRUT to provide integrated infrastructure to urban Karnataka.
In a memorandum, Siddaramaiah stated that the 58 per cent reduction in assistance to Nabard (National Bank for Agriculture and Rural Development in the current fiscal has negatively impacted the State’s farming community.
Addressing the media at Karnataka Bhavan in Delhi, he said the reduction in subsidised loans for farmers will severely impact food production in both the State and the country.
Siddaramaiah explained that Nabard provided loans to farmers at an interest rate of 4.5 per cent, which the state government used to subsidise, offering interest-free loans to farmers. Now, the central government mandates borrowing from nationalised commercial banks, which charge a 10 per cent interest rate. While the banks are benefiting from this, farmers are not offered any relief, he said.
While ₹5,600 crore was approved for 2023-24, only ₹2,340 crore has been sanctioned for 2024-25, the CM pointed out. “Unless the State government provides additional interest subsidies, this will financially impact farmers and strain the State’s economy. I have already submitted a request to Union Finance Minister Nirmala Sitharaman to increase Nabard assistance and ensure farmers face no difficulties accessing short-term crop loans,” he said, asking the financial ministry to intervene.
Alongside, Siddaramaiah pointed out that despite a ₹5,300 crore allocation for the Upper Bhadra Project in the 2023-24 Union Budget, these funds are yet to be released. While a cabinet note has been prepared under the Accelerated Irrigation Benefits Program (AIBP), he said that approving this plan quickly would help provide irrigation to agricultural lands in Central Karnataka under the said project, also calling for attention to the Mekedatu Project on the Cauvery River and the Kalasa-Banduri Project on the Mahadayi River.
Adding that Karnataka is one of the fastest urbanising States in India, with 13 municipal corporations, the CM requested additional capital for the development of second-tier cities.
“While Karnataka has allocated ₹2,000 crore under the Mahatma Gandhi Nagar Vikas Yojana for the next three years, this funding is insufficient. I request the release of ₹10,000 crore under AMRUT or other schemes to provide integrated infrastructure to urban Karnataka,” Siddaraimah noted.
Previously, he also accused the Centre of unfair treatment towards Karnataka in the 15th Finance Commission recommendations, which reduced the State’s share of tax devolution by 1 per cent. Calling for a rectification, the memorandum pointed out the commission’s recommendation of releasing ₹5,495 crore for the state’s needs and an additional ₹6,000 crore as a special grant for projects like the peripheral ring road and water sources rejuvenation.
“At least these two recommendations should be implemented. Since we are still within the tenure of the 15th Finance Commission, I request you direct the Finance Ministry to provide additional funds to Karnataka,” he asked the Prime Minister.
In the 16th Finance Commission, the Union government must ensure that States contributing significantly to the central tax pool are not penalised with reduced devolution shares, said the Karnataka CM, who had earlier observed the State contributes over ₹4 lakh crore in taxes while receiving only ₹50,000-60,000 crores in return from the centre.
Present at the meeting were Deputy Chief Minister and Irrigation Minister DK Shivakumar, Urban Development Minister Byrathi Suresh, and Energy Minister KJ George.
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