6% growth in economy to help close loan-waiver scheme by July next

6% growth in economy to help close loan-waiver scheme by July next

Government has announced commencement of waiver process from December 5

Though the State government, which has announced commencement of farm loan waiver process from December 5, has committed for a four-instalment repayment scheme to banks, it believes that the current growth rate in the economy and inflation adjusted growth in the budget could help it close the scheme with banks by July 2019.

“Factoring that the economy grows at 6% and inflation adjusted to the budget could increase the total budget outlay by close to 14% in 2019–20, we will have enough money allocated for the scheme,” sources said.

While there has been a allocation of ₹6,500 crore this year, another ₹4,500 crore is being added to it to take the allocation past ₹11,000 crore as increased revenue is being anticipated, sources said. With an increased budget outlay next year, ₹24,000 crore would be added to the scheme, which would enable the government to pay the banks completely, sources said.

In spite of a huge amount set aside for farm loan waiver, allocation has not been reduced to any department, sources said. The outlay of the State Budget, presented by Chief Minister H.D. Kumaraswamy in July, was about ₹2.13 lakh crore. Recently, he indicated that the government was working towards paying the banks by July 2019.

According to sources, the surplus revenue has been managed with increased efficiency. “At the end of the financial year, we are likely to add ₹16,000 crore in surplus than estimated. At the current rate, a revenue target of 106% is expected to be achieved.” As against 46% of the estimated revenue collected at the end of September 2017, it was 51% by the end of this September, sources claimed.

The government, sources said, had been on an overdrive in recovery of dues to the Commercial Tax Department under the Value-added Tax regime. “Already, ₹600 crore has been recovered and another ₹1,500 crore recovery is expected by the end of the financial year. Similarly, revenue from excise duty has grown by 6.5% this year,” sources said. “Unfortunately, in this round of waiver, money is not a problem, but bankers are,” sources added.

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