Govt extends interest subsidy on short-term crop loans

Government has approved two percent interest subsidy on farm loans and additional three percent for those who pay their instalments in time.

The approval was given for short term crop loans to farmers for the current year. A decision in this regard was taken during the Cabinet meeting in New Delhi on Wednesday.

The Union Cabinet chaired by the Prime Minister Narendra Modi has approved the Interest Subvention Scheme for farmers for the year 2017-18.

The Government has earmarked a sum of 20,339 crore rupees for this purpose. This will help farmers getting short term crop loan up to 3 lakh rupees payable within one year at only 4% per annum.

The Central Government will provide interest subvention of 5 per cent per annum to all prompt payee farmers for short term crop loan upto one year for loan upto 3 lakhs rupees borrowed by them during the year 2017-18. Farmers will thus have to effectively pay only 4% as interest.

In case farmers who do not repay the short term crop loan in time they would be eligible for interest subvention of 2% as against 5% available above.

It is worth mentioning that in the current financial year, the Central Government has targeted to provide loans of Rs 10 lakh crore to the farmers.

Apart from lending 6 lakh 22 thousand crore rupees to farmers on short term basis, the Modi government has taken several important steps to double farmers’ income. They are given higher compensation for PM Krishi Sinchhai Yojna, new crop insurance scheme, along with losses in disaster.

At the same time, the government is connecting the major markets across the country through e-NAM so that farmers can get higher prices of their produce.