Cabinet approves interest subvention scheme for farmers
The union cabinet which met here on Tuesday with Prime Minister Narendra Modi in the chair approved the interest subvention scheme for farmers for 2016-17.
 
"The government has earmarked a sum of Rs18,276 crore for this purpose. This will help farmers getting short term crop loan payable within one year up to Rs3 lakhs at only 4% per annum," said a cabinet communique.
 
According to the scheme, the central government will provide interest subvention of 5% per annum to all farmers for short term crop loan upto one year for loan upto Rs3 lakh borrowed by them during 2016-17.
 
"Farmers will thus have to effectively pay only 4% as interest. In case farmers do not repay the short term crop loan in time, they would be eligible for interest subvention of 2% as against 5% available above," the release added. 
 
In order to give relief to small and marginal farmers who would have to borrow at 9% for the post harvest storage of their produce, the central government has approved an interest subvention of 2% i.e an effective interest rate of 7% for loans upto 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. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
Comments
Jyoti Dua
10 years ago
Good policy. However, its implementation is the key to ensure there are no more farmer's suicide cases.
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