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Cabinet likely to consider issue of interest subvention scheme for farmers

29 Jul 2013 Evaluate

In a move to boost the agriculture production, the government is likely to consider the issue of interest subvention scheme for providing short-term crop loans at concessional rate of 7 per cent to farmers. As per the interest subvention scheme, the government pays 2 per cent interest subsidy to banks for granting short-term crop loan to farmers at a rate of 7 per cent.

Earlier, Finance Minister P Chidambaram had said that easy availability of agricultural credit is the main driver of agricultural production and had announced that the interest subvention scheme will be continued in 2013-14. He had also said that the government will increase the short-term crop loans target to Rs 700,000 crore for 2013-14 from 5,75,000 crore fixed for 2012-13.

By adding further, finance minister had said that farmers, who repay the loan on time, will be able to get credit at 4 per cent per annum. Presently, the scheme has been implemented by public sector banks, private banks, regional rural banks (RRBs) and cooperative banks.

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