Interest Subvention Scheme on Short-Term Crop Loan for Farmers Get Green Signal (Download PDF)


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Interest Subvention Scheme (ISS) has get green signal after Union Cabinet meeting which was chaired by the Prime Minister Narendra Modi on short term crop lone up to Rs. 3 lakh for farmers for the year 2017 - 18.

  • This crop loan will be payable within one year at only 4 % per annum. The Government has allocated total Rs. 20, 339 crore for this purpose.
  • Public Sector Banks (PSBs), Private Sector Banks, Cooperative Banks and Regional Rural Banks (RRBs) will be the provider of this scheme and they will use their oven fund.
  • The scheme will be implemented by NABARD and RBI both for one year.
  • Main aims of this scheme are to offer Short Term crop loans at ground level in order to improvement in agricultural productivity and production in the country.
  • Aadhaar will linked for all short term crop loan accounts from current year.

Key features of scheme:

  • Every farmer who takes short term crop loan will get interest subvention of 5 per cent per annum on up to Rs. 3 lakhs loan during the year 2017 - 18.
  • Farmers only have 4 % as interest but if farmers will not repay short term crop loan in time then they have to pay for interest subvention of 2 % as against 5 % available above.
  • Rs. 20, 339 crore will be funded by the Central Government as interest subvention for financial year 2017 - 18.
  • The Central Government has approved an interest subvention of 2 % for small and marginal a farmer who wants to borrow at 9 % in order to post harvest storage of their produce, for example: 7 % effective interest rate will be taken loans up to 6 months.
  • To provide relief to the farmers affected by natural calamities, the interest subvention of 2 % will be provided to Banks for the first year on the restructured amount.
Interest Subvention Scheme

Interest Subvention Scheme

Interest Subvention Scheme

  • This scheme will be big relief for farmers compared to their previous lone which was borrow at usurious rates of interest.
  • The farmers will get benefit from both farmer oriented initiatives of the Government and by accessing the crop loans from the time when crop insurance are linked with the Pradhan Mantri Fasal Bima Yojana (PMFBY).
  • The main idea of government behind this scheme is to make available reformation of market to the farmers to get benefit from remunerative prices for their produce in the market.
  • Government is trying all the possible way to increase annual income of farmers and oil Health Card, Input Management, Per Drop More Crop in Pradhan Mantri Krishi Sichai Yojana (PMKSY), PMFBY, e-NAM are the example of it.

- Published/Last Modified on: June 21, 2017

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