PTI, BENGALURU: Keeping his pre-poll promise, Karnataka Chief Minister H D Kumaraswamy today announced a Rs 34,000 crore farm loan waiver, but in a contentious move proposed hike in taxes on fuel and power in the maiden budget of the JD(S)-Congress coalition government. Kumaraswamy, who holds the finance portfolio, said the increase in taxes on petrol, diesel, power and liquor was aimed at mopping up additional revenue to offset the burden on the exchequer caused by the farm loan waiver.

He, however, capped the agricultural loan to be written off at Rs 2 lakh, saying it would not be right to waive loans of higher value. Kumaraswamy said all defaulted crop loans up to December 31, 2017 will be written off in the first phase. The JD(S) leader had, in the run up to the assembly polls, promised he would waive farm loans totalling Rs 53,000 crore within 24 hours of assuming office.

The chief minister said the quantum of loans paid by every farmer, who had not defaulted on repayment, or Rs 25,000, whichever is less, will be credited to their bank accounts.

The families of government officials and those of the cooperative sector, farmers who have paid income tax for the past three years and other ineligible farm loan recipients will be out of the purview of the scheme.