Bengaluru, (DHNS): Karnataka Chief Minister HD Kumaraswamy today announced a loan waiver scheme for farmers -- a key promise ahead of assembly elections amid farmer suicides and countrywide protests. The waiver, which would cost the state Rs. 34,000 crore, would apply to crop loans of up to Rs. 2 lakh. Besides, arrears will be waived for defaulters so they can get fresh loans. For this, the Chief Minister said, Rs. 6,500 crore has been earmarked in the 2018-2019 budget.

There are incentives for farmers who repaid loans in time. "I have decided to credit the repaid loan amount or Rs. 25,000, whichever is less, to each farmer's account," Mr Kumaraswamy said in his budget speech.

The relief for the agrarian community was the centerpiece of the maiden budget of the state's Congress-JD(S) government announced by Chief Minister Kumaraswamy today.

The measures had been cleared in the meeting held by the coordination committee of the Congress and Mr Kumaraswamy's JD(S) held on Sunday. The committee had also approved irrigation projects worth Rs. 1.25 lakh crore.

The farm loan waivers had been high on the agenda of the JD(S) ahead of the elections. Mr Kumaraswamy had promised that he would waive all farm loans within 24 hours of coming to power.

The Chief Minister has also proposed to increase power tariff by 20 paise per unit and levy a higher tax on fuel. Petrol fare will go up by Rs. 1.14 per litre and diesel by Rs. 1.12 per litre.