EGoM to consider cutting interest rate on crop loans

The agriculture ministry has stirred the proposal of slashing interest rates on crop loans for consideration before the Empowered Group of Ministers (EGoM) on drought, chaired by Agriculture Minister Sharad Pawar. It is one of the major proposals to give financial assistance on crop loan, especially those rescheduled as term loan due to drought in some states.

The drought hit areas, where farmers have taken crop loans are rescheduled into term loans due to their inability to pay. They may be charged lower interest rate at 7% from 12% to reduce their burden. During crisis like drought, the recovery is done by rescheduling the crop loan converted into a term loan and farmers get 3 years time to repay.

The monsoon is deficient in the country by 12%. The poor monsoon especially in 4 states - Karnataka, Gujarat, Maharashtra and Rajasthan have confirmed drought in more than 390 taluks.