Govt likely to consider interest subvention scheme for farmers
New Delhi: The government is likely to consider on Thursday the scheme to provide short-term crop loans at concessional rate of 7 percent to farmers.
The Union Cabinet would take up the issue of interest subvention scheme implemented by public sector banks, cooperative banks, and Regional Rural Banks in its meeting on Thursday, sources said.
Under the interest subvention scheme, the government pays 2 percent interest subsidy to banks for granting short-term crop loan to farmers at concessional rate of 7 percent.
The then Finance Minister Pranab Mukherjee in the Budget speech in March this year had announced that the interest subvention scheme for providing short term crop loans to farmers at 7 percent interest per annum will be continued in 2012-13.
"An additional subvention of 3 percent will be available to prompt paying farmers," he had said.
"In addition, the same interest subvention on post harvest loans up to six months against negotiable warehouse receipt will also be available. This will encourage the farmers to keep their produce in warehouses," he had said.
Farm credit flow target for 2011-12 was Rs 4,75,000 crore that included short-term and long term loans.
"Farmers need timely access to affordable credit. I propose to raise the target for agricultural credit in 2012-13 to Rs 5,75,000 crore. This represents an increase of Rs 1,00,000 crore over the target for the current year," he had said.