Sharp drop in Nabard support: Siddaramaiah meets FM, seeks raise in credit limit citing good monsoon

Upset over the country’s apex development bank Nabard slashing credit-line to Karnataka for farm sector lending at a concessional rate of interest, chief minister Siddaramaiah on Thursday met Finance Minister Nirmala Sitharaman, and urged her to raise the credit limit for the year 2024-25.

Technically called seasonal agricultural operational (SAO) limit, Siddaramaiah urged her to intervene and get Nabard to raise the short-term credit limit to Rs 9162 crore as sought by the state’s cooperative apex bank to support the farm sector which is expected to do well this year in view of the copious rainfall.

The state government, the CM conveyed to the FM, has set a target of lending Rs 25,000 crore in short term agricultural loans to 35 lakh farmers this year. Last year, the government disbursed Rs 22,902 crore in short-term farm loans through the short-term cooperative credit structure, he said.


The CM complained that while the apex bank requested Rs 9162 crore for this year’s short-term lending through cooperative credit institutions, the Nabard has only sanctioned only Rs 2340 crore. This was a 58% drop over last year’s sanctioned limit of Rs 5600 crore.

The Nabard has pointed to the RBI slashing the allocation under the general line of credit as the reason for Karnataka getting less this year. “Karnataka has received very good monsoon rains, and the farmers are demanding to enhance the disbursement of SAO loans for their agricultural co-operations. The drastic reduction in sanctioning SAO loan limit to Karnataka will drastically hamper the disbursement of short-term agricultural co-operation loans...,” the CM said in a letter to the FM.

Nabard’s credit to Karnataka to meet its short-term farm loan targets

	Financial year	Date of limit sanctioned	Sanctioned amount	Increased/ Decreased	Percentage of increase/ decrease
	2019-20	06.07.2019	4200.00	700.00	+15.00%
	2020-21	10.09.2020	5500.00	1300.00	+27.00%
	2021-22	22.09.2021	5483.00	16.10	-1.00%
	2022-23	16.09.2022	5550.00	66.10	+1.00%
	2023-24	17.11.2023	5600.00	55.00	+1.00%
	2024-25	24.09.2024	2340.00	3260.00	-58.00%