Bengaluru, (IANS) : The Karnataka government on Wednesday announced waiving of crop loans of up to Rs 50,000 of over 22 lakh farmers from cooperative banks in the state.

“Crop loans of up to Rs 50,000 borrowed by 22,27,506 farmers from cooperative banks in the state will be waived,” Chief Minister Siddaramaiah told the assembly.

The waiver of short-term loans will cost the exchequer Rs 8,165 crore.

The decision followed opposition demand to mitigate farmers’ hardships and to give them relief from the severe drought of 2016.

“Crop loans due up to June 20 will be waived, with farmers’ total borrowings from cooperative banks standing at Rs 10,736 crore so far,” the Chief Minister said.

Siddaramaiah also urged the Centre to waive crop loans that farmers borrowed from state-run and regional rural banks.

Admitting that the loan waiver would impact the state’s finances, Siddaramaiah, who also holds the Finance portfolio, said that as the farmers were in distress due to drought, it was his government’s duty to respond to their plight.

“Crop loans that farmers took from cooperative banks are only 20 per cent of the total borrowings, including 80 per cent from grameen (rural banks), nationalised (state-run) and other banks owned by the central government and its agencies,” the Chief Minister told the state lawmakers.

Claiming victory over the ruling Congress, main opposition Bharatiya Janata Party (BJP) urged the government to increase the loan waiver limit up to Rs 1 lakh.

“Waiving crop loans of up to Rs 50,000 is not a big achievement. We expected the Karnataka government to waive loans of up to Rs 1 lakh. Had Siddaramaiah decided earlier, he would have saved the lives of 1,197 farmers who committed suicide due to debt,” Bharatiya Janata Party state unit President B.S. Yeddyurappa told reporters.

State Farmers’ Association and Green Brigade President Kodihalli Chandrashekar also urged the government to write off the entire crop loans (totalling Rs 10,736 crore).

“Karnataka should follow other states in waiving the entire crop loans. I appeal to Siddaramaiah to doube the cooperative loans waiver limit to Rs 1 lakh,” said Chandrashekar, an independent lawmaker who represents Karnataka Rajya Raitha Sangha.

Karnataka is the fourth state to write off farm loans after Punjab, Maharashtra and Uttar Pradesh.

Demanding complete waiver of crop loans, Karnataka Sugarcane Growers’ Association President Karburu Shanthakumar said the government’s decision to waive loans of up to Rs 50,000 would lead to more problems for farmers.

“Farmers have no money to repay loans (above Rs 50,000) to avail fresh crop loans during the current kharif season. I urge the state government to waive the total loans for their benefit,” Shanthakumar said.