Special Package to Reduce Debt Burden of Farmers (Download PDF)


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Government has taken the several initiatives to reduce the debt burden of farmers. Ensuring availability of agriculture credit at a reduced interest rate of 7 % to farmers through interest subvention scheme for short-term crop loans up to Rs. 3.00 lakh (Department of Agriculture, Cooperation & Farmers’ Welfare). Additional subvention of 3 % given to those who repay their crop loan in time, thereby reducing the effective rate of interest to 4%.

Per cent of Farmers indebted

Per Cent of Farmers Indebted

Per cent of Farmers indebted

  • Reserve Bank of India (RBI) issued directions on relief measures in areas affected by natural calamities through

    • Identification of beneficiaries
    • Extending fresh loans and restructuring of existing loans
    • Relaxing security and margin norm.
    • Restructuring reduced from 50 % to 33 % for crop loss.
    • Priority Sector Lending Guidelines provides loans to distressed farmers to repay non-institutional lenders
  • Pradhan Mantri Fasal Bima Yojana (PMFBY): Comprehensive insurance against failure of insured crops due to non-preventable natural risks:

    • Providing financial support to farmers suffering crop loss
    • Stabilizing income of farmers to ensure continuance in farming
    • Encouraging innovative and modern agricultural practices.

Other Centrally Sponsored Schemes

  • Rashtriya Krishi Vikas Yojana (RKVY)
  • National Food Security Mission (NFSM)
  • National Agriculture Market (e-NAM)
  • National Mission For Sustainable Agriculture (NMSA)

Relief Measures for Cooperative Sector

  • Grace period of 60 days for prompt repayment incentive@3 % provided to some farmers
  • Interest waiver for two months for all short term crop loans availed from Cooperative Banks
  • National Bank For Agriculture And Rural Development (NABARD) raised short term borrowings from the market at prevailing market rate of interest and disbursed the same under refinance for on-lending to Cooperative Banks.

- Published/Last Modified on: August 21, 2017


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