Congress MLC Dinesh Gooli Gowda Urges Karnataka Government to Cover Extra Interest on NABARD Loans to Support Farmers

In a strong appeal to the Karnataka government, Congress MLC Dinesh Gooli Gowda has requested that the State bear the additional interest costs being charged by NABARD on loans provided to the State Apex Bank. He emphasized that this support is crucial to ensure farmers receive timely and affordable credit during the ongoing kharif sowing season.

In his letter addressed to Chief Minister Siddaramaiah, Deputy Chief Minister D.K. Shivakumar, Cooperation Minister K.N. Rajanna, and the Chief Secretary, Mr. Gowda highlighted a concerning financial shift. Last year, NABARD had offered the State Apex Bank a loan of ₹5,450 crore at 4% interest, which helped District Central Cooperative (DCC) Banks lend to farmers at low interest rates. This year, however, NABARD has reduced that amount to just ₹2,700 crore at the same rate.

Mr. Gowda explained that every year, NABARD channels funds to farmers through the Apex Bank, DCC banks, and Primary Agricultural Cooperative Societies (PACS). These institutions play a vital role in helping farmers borrow money affordably, grow crops, and improve their livelihoods without falling into debt traps.

With the government setting an ambitious credit target of ₹28,000 crore for 37 lakh farmers cultivating 114.40 lakh hectares during the kharif season, Mr. Gowda warned that this funding reduction may create a shortage of capital. NABARD has said it is willing to lend more funds but only at a higher interest rate of 8.25%, compared to the concessional 4%. This means an additional burden of 4.25% in interest, which Mr. Gowda is urging the State to absorb on behalf of the farming community.

He further pointed out that the State has set a production target of 160.74 lakh tonnes of grains, including 148.48 lakh tonnes of food grains and 12.26 lakh tonnes of oilseeds. Any disruption in credit flow could jeopardize these goals.

With agricultural activities already picking up speed, the Agriculture Department has begun preparing seeds and fertilizers. The expected demand is 5.99 lakh quintals of seeds and 26.77 lakh metric tonnes of fertilizers. Mr. Gowda stressed that to meet these demands, credit must be made available to farmers at zero interest and without delay.

He also raised concerns about women’s Self-Help Groups (SHGs). Many SHGs, he said, are unable to access zero-interest loans of up to ₹3 lakh due to complicated portal registration procedures. As a result, they are forced to pay interest. Mr. Gowda urged the government to simplify registration processes to ensure more women’s groups can benefit from the scheme.