Govt. Approves Extension of 3% Interest Subvention on Crop Loans [ Current News (Concise) ]
The Union Cabinet approved a proposal to extend a three percent interest subvention scheme to banks for the current fiscal to ensure farmers get short-term crop loans up to Rs. 3 lakh at seven percent.
- Telecom Minister Ravi Shankar Prasad said, the subvention scheme is applicable for all farmers availing short-term crop loans up to Rs. 3 lakh for one year,
- Union Government has approved providing of short-term loans for farmers.
- The subvention scheme is applicable for all farmers.
- Farmers can get benefit short term loan of upto 3 lakh rupees at 4 percent interest rate.
- Government has also approved long-term contract with Mozambique for import of pulses.
- Under this scheme, farmers get the short-term loan of up to Rs. 3 lakh for a period of one year at an interest rate of 7 percent.
- Those repaying will receive loans at 4 percent.
- Interest subvention is a form of relinquishment of some percentage of interest on loan given to promote some particular industry and general public interest.
- It’s implies that the subsidy in hand, the loan borrower has not to pay total interest on loan amount and the balance interest amount will be tranfered by the government.
Banks providing short term crop loan to farmers:
- These banks are providing short term crop loan to farmers.
- Government has set an agricultural credit target for banks at Rs. 9 lakh crore for the current fiscal, up from Rs. 8.5 lakh crore 2015 - 16.
Not repay the short term crop loan:
- In case farmers do not repay the short term crop loan in time they would be eligible for interest subvention of 2 per cent as against 5 per cent available above.
- The interest subvention of 2 per cent will be provided to banks for the first year on the restructured amount.
- To provide relief to the farmers affected by natural calamities.
- Published on: July 6, 2016