Govt clears interest subvention scheme for farmers

  • To ensure availability of loans at affordable rates for farmers, the government has approved a scheme for providing short-term crop loans at concessional rate of 7 percent, Information and Broadcasting Minister Manish Tewari said here on Friday.
  • "This scheme has already been extended to crop loans borrowed from private sector scheduled commercial banks in respect of loans given within the service area of the branch concerned 
  • An additional subvention of 3 percent is being provided to those farmers who repay their loans on time, he said, adding, the effective rate of interest for such farmers, thus, will be 4 percent per annum. 
  • The estimated budgetary implication of this scheme for 2013-14 is Rs 15,385 crore 
  • Govt. will also provide interest subvention at 7 percent to small and marginal farmers having Kisan Credit Card loans against Negotiable Warehouse Receipts for post harvest, on the same rates as those available for crop loan, for another six months.
  • The estimated additional budgetary implication of this feature would be Rs 264 crore,. 
  • Banks have been consistently meeting the target set for agricultural credit flow in the past years. For the year 2013-14, the target for agricultural credit flow has been raised to Rs 7 lakh crore from Rs 5.75 lakh crore in the year 2012-13.
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