Karnataka’s new Ordinance and the state of microfinance sector

On February 12, 2025 after days of deliberations, the Karnataka government promulgated an Ordinance to crack the whip on unregistered and unlicensed microfinance institutions (MFI) and moneylending agencies in the State.
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The Hindu

On February 12, 2025 after days of deliberations, the Karnataka government promulgated an Ordinance to crack the whip on unregistered and unlicensed microfinance institutions (MFI) and moneylending agencies in the State. The new legislation aims to protect economically vulnerable groups and individuals from exorbitant interest rates and coercive means of loan recovery.

Why did such an Ordinance become necessary? What are its key features? What are the concerns raised by microfinance institutions?

Read full story here.

Reporting: Nalme Nachiyar, Sharath Srivatsa

Video & Editing: Ravichandran N

Bengaluru:

Karnataka government has prohibited its employees from smoking cigarettes and consuming any tobacco products inside government offices and premises.

The circular issued by the Department of Personnel and Administrative Reforms (DPAR) to this effect has warned of disciplinary action against those violating.

“Consumption of tobacco products in government offices and office premises, despite statutory warnings against it, has come to the attention of the government. In this background, in the interest of the health of the staff and to protect the public and government employees from passive smoking, it is completely prohibited for any government employee to consume any tobacco products, including smoking in government offices and office premises,” the circular said.

A warning board in this regard shall be displayed at suitable places at offices, it said.

Disciplinary action shall be taken against any government employee found smoking or consuming any tobacco products (gutka, paan masala, etc.) in the office or office premises in violation of these instructions, it added.

Smoking and consumption of other tobacco products are harmful to health and consumption of such products in public areas is completely prohibited under the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003, the circular noted.

Rule-31 of the Karnataka State Civil Service (Conduct) Rules, 2021 also prohibits consumption of any intoxicating drink or intoxicating substance in a public place, it further pointed out.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Bengaluru:

The Karnataka government on Thursday decided to constitute a Special Investigation Team (SIT) and a Cabinet sub-committee to take further action on the report by the Justice Michael D’ Cunha Commission of Inquiry which investigated alleged irregularities in the purchase of equipment and medicines during the COVID-19 pandemic when the BJP was in power.

The decision was taken at a meeting of the Cabinet, chaired by Chief Minister Siddaramaiah. In the “partial” report submitted on August 31 in 11 volumes, the commission examined the expenditure to the tune of Rs 7,223.64 crore, Law and Parliamentary Affairs Minister H K Patil told reporters later, adding, “they have not pinpointed that so much (scale) is misappropriation.” He, however, said the commission has recommended recovery of Rs 500 crore.

The Commission has sought reports from four zones in Bruhat Bengaluru Mahanagara Palike (BBMP) and 31 districts of the state and it’s yet to receive them, he said. The “partial” report has been submitted after verifying 55,000 files from the concerned departments.

The Minister said based on the report, as criminal intent is also involved, it has been decided to constitute an SIT, and also a Cabinet sub-committee for “review and monitoring.” It has also been decided to begin the recovery proceedings immediately and to black list those companies or establishments involved in the wrongdoing.

“Wherever the criminal element is there, SIT will naturally look into it. Apart from that, the Cabinet sub-committee will be assisted by relevant officers to go into details of other malpractices. The details about those involved are not there in this report and it may come in the final report,” Mr Patil added.

The Cabinet also decided withdraw 43 criminal cases registered in various police stations in the State.

It also gave its approval for extending by an year the term of the SIT constituted in the Karnataka Lokayukta for investigating the illegalities in mining, with a probe into several cases still pending, he said.

Administrative approval has also been given for construction of “Reshme Bhavana” at an estimated cost of Rs 527.50 crore on 4.25 acres of land owned by the Department of Sericulture at Okalipuram here with entire investment by Karnataka State Minerals Corporation Limited (KSMCL).

The Cabinet also gave its nod for construction of hi-tech Cocoon market at Shidlaghatta in Chikkaballapura district at an estimated cost of Rs 200 crores.

It also decided to create Karnataka Skill Development Corporation under Companies Act, 2013.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Bengaluru:

Amid controversy over the use of animal fat in ghee at the Tirupati temple in Andhra Pradesh, the Karnataka government on Friday issued a directive mandating the use of Nandini brand ghee in all 34,000 temples that come under the state’s temple management body. 

The Karnataka government’s new directive requires that all temples under its jurisdiction use only Nandini ghee, produced by the Karnataka Milk Federation (KMF), for temple rituals, including lighting lamps, preparing ‘prasada’, and in the ‘Dasoha Bhavans’ – places where devotees are served food. The official circular stressed that temple staff must ensure that the quality of ‘prasada’ is never compromised.

“In all the notified temples under the Religious Endowment Department of Karnataka State, it has been directed to use only Nandini Ghee for services, lamps, and preparation of all types of prasada and in Dasoha Bhavan. It has been suggested to maintain the quality in the prasada prepared in the temples,” the circular reads.

This directive comes in the wake of a larger controversy surrounding the alleged use of animal fat in ghee in the preparation of laddoos at the famous Sri Venkateswara Swamy Temple in Tirupati, managed by the Tirumala Tirupati Devasthanams (TTD). The controversy first erupted earlier this week when Andhra Pradesh Chief Minister N Chandrababu Naidu raised concerns over the quality of the ghee used at the temple, claiming that samples had tested positive for lard and other animal fats.

The Tirupati temple kitchen, which produces around 3 lakh laddoos daily, requires enormous quantities of ingredients, including 1,400 kg of ghee, along with other essentials like cashew nuts, raisins, cardamoms, gram flour, and sugar. The bulk of the ghee in question was reportedly sourced from Tamil Nadu’s Dindigul district.

The row quickly escalated as opposition leader Jagan Mohan Reddy found himself under fire. Accusations flew that during his tenure as Chief Minister, the ghee used to make Tirupati laddoos had been substandard, with claims of animal fat being used instead of traditional ghee. Mr Reddy vehemently denied these allegations, accusing the ruling Telugu Desam Party (TDP) of exploiting the issue for political gain.

The controversy reached the Supreme Court shortly after, with a petition being filed, claiming that the use of animal fats in temple food violated Article 25 of the Constitution, which guarantees the right to freedom of religion and practice. The Health Ministry quickly demanded a detailed report on the issue, and Union Food Minister Pralhad Joshi called for a thorough inquiry, insisting that “the culprit should be punished.”

As tensions mounted, temple authorities accused their ghee supplier of exploiting the temple’s lack of in-house food testing facilities. They argued that the absence of proper quality control had made the temple vulnerable to such scandals. Tamil Nadu-based AR Dairy Food Pvt Ltd, which had supplied ghee to the temple in June and July, defended itself, claiming that its product had passed multiple lab tests and constituted a mere 0.01 per cent of the temple’s ghee supply.

The controversy spiralled further when a report from a Gujarat state-run lab surfaced, indicating that samples of the ghee used in the Tirupati temple tested positive for fish oil, beef tallow, and lard – a form of pig fat.

“Even Tirupati laddoo was made with substandard ingredients… they used animal fat instead of ghee,” said Chief Minister Naidu. 

He vowed that his administration had since raised the quality standards for all temple ingredients, and announced that the temple would undergo a thorough sanitisation process. His son, Andhra IT Minister Nara Lokesh, added fuel to the fire by saying that the row had been triggered by an anti-corruption probe into the procurement of ghee and vegetables used for temple food.

In response, the YSRCP, headed by Jagan Mohan Reddy, launched a counterattack, accusing the TDP of a political vendetta. Former TTD Chairperson YV Subba Reddy called the allegations “unimaginable,” and ex-Chairperson Karunakar Reddy claimed the scandal was part of a smear campaign.

Bengaluru:

The Karnataka government has approved a substantial pay hike for its employees. Following the 7th Pay Commission’s recommendations, this decision was confirmed in a Cabinet meeting chaired by Chief Minister Siddaramaiah on Monday.

Starting August 1, employees will see a 27.5% increase in salaries. This adjustment aims to improve the financial well-being of state employees.

The implementation of these recommendations will cost an additional Rs 17,440.15 crore annually. This move is expected to enhance employee satisfaction and retention.

The pay hike reflects the state’s commitment to fair compensation and financial growth.

By increasing the salaries of government employees, the state aims to boost morale and productivity, which in turn can lead to more efficient public services.

In March 2023, then chief minister Basavaraj Bommai had granted employees an interim 17% salary hike.

Hassan, Karnataka:

Arrested BJP leader G Devaraje Gowda alleged on Friday that Karnataka Deputy Chief Minister DK Shivakumar offered him Rs 100 crore to malign the names of former Chief Minister and JDS state President HD Kumaraswamy and Prime Minister Narendra Modi.

Speaking to reporters from the police vehicle after being sent to judicial custody on Friday, Devaraje Gowda claimed that Mr Shivakumar even sent him Rs 5 crore as advance.

“After I refused the offer, police cases were lodged against me and I was arrested. I am ready to expose him (DK Shivakumar) once I am released. The Congress government is going to collapse in Karnataka,” he claimed.

Devaraje Gowda added, “I was told to make a statement that it was HD Kumaraswamy who circulated the pen drives containing sex videos (involving Kumaraswamy’s nephew Prajwal Revanna, the grandson of ex-PM HD Deve Gowda). But it was DK Shivakumar who obtained the pen drive from Karthik Gowda, who worked as a driver for Prajwal Revanna, and planned the entire episode.”

A team of four ministers, including N Cheluvarayaswamy, Krishna Byre Gowda, and Priyank Kharge, was formed to handle the developments relating to the sex video scandal, Devaraje Gowda claimed.

“They had planned in a big way to bring disrepute to Prime Minister Modi, HD Kumaraswamy, and the BJP. They offered me Rs 100 crore and sent Rs 5 crore as advance to Room No. 110 at Bowring Club. A local leader from Channarayapatna, Gopalaswamy, was sent to negotiate the deal,” Devaraje Gowda claimed.

“DK Shivakumar made the Rs 100 crore offer to malign the name of Prime Minister Modi by linking him to the sex scandal. Shivakumar’s main objective is to finish Kumaraswamy politically,” he added.

“When I refused to be a part of their plans, they first fixed me in an atrocity case, but couldn’t find any evidence. Later, they fixed me in a sexual harassment case. When this ploy also failed, they lodged a rape case against me. I was interrogated for four days, but they couldn’t get anything,” he claimed.

“I have the audio recordings of Shivakumar’s conversations. I will release them and the Congress government will collapse once I am out of prison,” Devaraje Gowda claimed as the police vehicle drove off.

On May 6, Devaraje Gowda claimed that Shivakumar was behind the release of the pen drive containing videos of sexual assault.

He also said that Prime Minister Modi was Congress’ main target.

“I do not trust the Special Investigation Team (SIT) probing the sex scandal. I will submit all the evidence to the CBI. The videos in my possession are different from those which have been released,” he had claimed.

Devaraje Gowda was arrested by the Karnataka police six days ago in a sexual harassment and atrocity case.
 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

New Delhi:

The Karnataka government today demanded Rs 17,901.73 crore in funds from the Centre to compensate farmers affected due to drought in the Kharif season this year.

Karnataka Agriculture Minister N Chaluvaraya Swamy, Rural Development Minister Priyank Kharge, and Revenue Minister Krishna Byregowda met Union Agriculture Secretary Manoj Kumar Ahuja and Home Secretary Ajay Kumar Bhalla separately and updated them about the drought situation in Karnataka.

The three state ministers are also members of the Karnataka Cabinet sub-committee on drought management.

Briefing the media after the meeting, Mr Byregowda said, “We have sought a total drought relief of Rs 17, 901.73 crore as per the NDRF norms. We have requested the central government to clear the funds at the earliest.

As of September 22, the state as a whole recorded 26 per cent deficit rainfall that led to an estimated agriculture and horticulture crop loss in about 45.55 lakh hectares during the kharif season, he said.

The state has so far declared drought in 216 taluks and will examine the possibility of declaring more taluks as drought-hit in the first week of November, he said.

Out of Rs 17,901 crore estimated drought relief funds, the Revenue Minister said the state government for the first time has demanded Rs 12,577 crore as gratuitous relief to families whose livelihood has been seriously affected due to drought for 90 days.

The state has also demanded Rs 4414.29 crore for agriculture and horticulture crop loss during the kharif season (July-June) this year, while Rs 355 crore towards animal feed and Rs 554 crore for providing drinking water assistance in drought-affected taluks, he added.

The Karnataka government has estimated a total loss due to the crop damage in the state at Rs 33,770.10 crore. It has sought assistance of Rs 17,901.73 crore under the National Disaster Relief Find (NDRF).

Byregowda also said that the state government has requested the Centre to consider the latest number of small and marginal farmers which is 70 per cent of the state population while sanctioning the relief fund.

The state Rural Development Minister Kharge said he requested the Centre to release the pending Rs 600 crore MGNREGA funds to the state in a separate meeting with the Union Rural Development Secretary here.

“We have also sought an increase in the number of guaranteed man-days of work under the MNREGA for the state from the current 10 crore to 18 crore keeping in view the drought situation,” he said.

Already, 10 crore man-days of work have been exhausted till now and more man-days of work is required to provide livelihood to people affected in drought-hit areas, he said.

“Right now, there is no problem of drinking water, but cannot say in the next 2-3 months. We need funds to arrange for contingency water requirement in drought-hit taluks,” he added.

The state agriculture minister Mr Swamy said he also discussed problems being faced in the implementation of the Centre’s crop insurance scheme and sought some changes.
 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)