Karnataka government may seek legal recourse on cut in NABARD funds

Bengaluru: The state government is likely to launch a legal battle against the Union government for reducing funds under the National Bank for Agriculture and Rural Development (NABARD).

Addressing a joint news conference on Tuesday Agriculture Minister Chaluvarayaswamy and Cooperation Minister K N Rajanna accused the Union government of discriminating against Karnataka and said, “If necessary, the state will fight against this bias by the Union government in a legal way.”

Chaluvarayaswamy mentioned how Karnataka got its tax devolution share by approaching the Supreme Court. “We hope Centre will not push us to that level,” he added.

He said the Karnataka government has requested NABARD to sanction a seasonal agricultural operations (SAO) limit of Rs 9,162 crore for the year 2024-25 as a short-term cooperative credit structure. “The SAO limit sanctioned this year was Rs 2,340 crore, which is 58% less as compared to last year,” he pointed.

Rajanna said the cut in NABARD funds will force farmers to approach private financiers for loans. “In place of Rs 5,600 crore, they have released only Rs 2,300 crore. When this is the case, how can the farmers get a loan? They will go to private financiers, take loans at higher interest rates and go bankrupt. We demand more funds under NABARD or else if necessary we will have to fight it out legally,” Rajanna said.

Delegation to meet PM

The ministers explained that a delegation from the state will meet Prime Minister Narendra Modi and Union Home Minister Amit Shah to request funds.

“A National Convention on Cooperation is being held in which both the prime minister and the Union home minister will be taking part. A delegation from the state will meet them and try to make them understand the farmers’ issues,” Rajanna added.

The ministers argued that they cannot accept the reason given by NABARD for curbing funds. “We were told that the reason for the reduced limit this year was the Reserve Bank of India (RBI) allocating funds under the general line of credit, which is not acceptable,” they added. 

The ministers specifically targeted Prime Minister Modi and Home Minister Amit Shah, alleging preferential treatment towards corporate sector and curtailing funds for pro-poor schemes and farmers’ welfare.

They lashed out at representatives from Karnataka in the Centre, including Minister H D Kumaraswamy for not speaking in favour of farmers.

‘Must apologise’

“Our MPs and ministers, including Kumaraswamy, must apologise to the state as we fought for the tax share in the Supreme Court,” they claimed.

Chief Minister Siddaramaiah said that he had written to the prime minister and Union finance minister requesting them not to do injustice to farmers by reducing NABARD funds to Karnataka.