Street vendors in a fix as Karnataka govt’s aid gets auto-debited towards loan repayment

The Karnataka government has released one-time payment of Rs 2,000 to about 1.9 lakh vendors but most of them had availed loans under central government schemes, said president of Federation of Karnataka Street Vendors Association S Rangaswamy.

Narayan, a street vendor in Bengaluru, was happy to know about the Rs 2,000 Covid-19 relief announced by Karnataka Chief Minister BS Yediyurappa for workers like him. However, his joy soon turned to despair as the money the state government put into his bank account was promptly debited towards repayment of a pending loan.

Narayan, who sells vegetables and fruits at Pipeline road in North Bengaluru, is still repaying the Rs 10,000 loan he had been provided with during the first wave of Covid under the Prime Minister Street Vendor’s Atmanirbhar Nidhi (PM SVANidhi) scheme.

“After the first lockdown was over, I restarted my business and was able to pay back around Rs 1,000 in six months to the bank, but once the second wave came, I could hardly earn Rs 300 in a day and that was not able to repay the loan,” he said.

Narayan is one of the many street vendors who have got the aid only to be taken away the next moment.

Shivaprasad, also from Bengaluru, said he received an SMS from the bank that the government credited Rs 2,000 into his bank account. He went to withdraw the money but could not. He got to know from the bank that it had been debited as part of an instalment towards PM SVANidhi loan repayment.

The Federation of Karnataka Street Vendors Association said at least 95,000 have availed loans under central government schemes or from banks during the nationwide lockdown last year. “According to our information there are more than five lakh street vendors in the state and the government has released one-time payment of Rs 2,000 to about 1.9 lakh vendors recently, but most of them had availed loans under central government schemes during the nationwide lockdown last year,” said ES Rangaswamy, president of the association.

The association has now approached the chief minister and complained about the issue and according to Rangaswamy, the government has asked banks not to deduct the money since it is a relief measure.

Meanwhile, banks say that the deduction happens automatically once money is credited regardless of whether it is through a relief package or not if there is pending loan repayment.

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