A crucial swing state in India is upset over a patchy loan waiver and that may be an advantage for Narendra Modi

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A crucial swing state in India is upset over a patchy loan waiver and that may be an advantage for Narendra Modi

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  • As 14 constituencies in Karnataka head to the polls today, 24.3 million voters will choose between the Congress-Janata Dal coalition currently ruling in the state and the party in power at the centre, the BJP.
  • After consistently voting for the Congress till 1991, the state has swung between electing a majority of BJP candidates vs Congress candidates since 1996.
  • A key issue on voters minds will be the slow implementation of the Congress-JDS government’s state loan waiver scheme, which has also been stalled by the Election Commission until polling is over.

As 14 constituencies in Karnataka head to the polls today, 24.3 million voters will choose between the Congress-Janata Dal coalition currently ruling in the state and the party in power at the centre, the BJP.

After consistently voting for the Congress till 1991, the state has swung between electing a majority of BJP candidates vs Congress candidates since 1996. The state, which is also home to the country’s startup capital, Bengaluru, will be a crucial one in this election too since no party or alliance exerts an unassailable influence so far.

As voters assess the 241 candidates, which include 133 Independents, in the following constituencies - Udupi-Chikmagalur, Hassan, Dakshina Kannada, Chitradurga, Tumkur, Mandya, Mysore, Chamarajnagar, Bangalore Rural, Bangalore North, Bangalore Central, Bangalore South, Chikkaballapur and Kolar - a big question will be on the minds of the state’s farmers: which party’s handouts will be more generous?

The situation for farmers has been bleak for a while. Following months of damage to farmland due to floods and landslides, by the end of 2018, 156 out of 176 administrative divisions on the state were declared drought-hit, amplifying farmer distress.

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As campaigning for state elections in May 2018 reached fever pitch, both the BJP and Congress pledged loan waivers and income support. Both their manifestos promised thousands of crores of loan waivers as well as funding for agriculture projects.

State elections in May last year ultimately resulted in a hung Assembly, with the Congress and Janata Dal joining forces to form a coalition government. One of the coalition’s first orders of business was to waive farmer loans to the tune of ₹440 billion.

The initial goodwill around the scheme likely powered an important victory for the Congress in five bypolls in November 2018.

However, the scheme was slower to implement than expected. As of mid-December 2018, only 800 farmers had benefited from the scheme, a far cry from the millions of farmers that were expected to avail of it. The problem? The state’s banks had trouble reconciling the final list of eligible beneficiaries.

The state government was quick to do damage control amid growing discord with farmers. In February 2019, it announced that around ₹54.5 billion of funds for the scheme had been released, and that the number of eligible beneficiaries had nearly doubled to 11 million.

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A strong election campaign for the Lok Sabha was assured. Until the Election Commission of India (ECI) stepped in. In March 2019, the ECI ordered the temporary suspension of the loan waiver scheme until general elections were over, saying that payments under the scheme could be used to influence voters. The move stalled ₹1.5 billion of loan repayments.

While the suspension further slows down the scheme and will delay its final implementation well past July 2019, the state’s farmers are looking to the Modi administration for a lifeline.

The cash transfer scheme for announced in the government’s interim budget is expected to benefit eight million smallholding and marginal farmers in the state, with two of three installments coming right before polling started.

Apparently, the ECI didn’t feel that would exert undue influence on voters.

As things stand, the state’s farmers are caught between two competing governments and two competing schemes. A vote will likely mean a vote for a scheme that has helped them to a greater extent.

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