A farmer centered Interest Subvention Scheme has been approved by the
Prime Minster Narendra Modi for farmers for the year 2016-17. An amount
of Rs. 18,276 crore has been earmarked for the scheme.
Under the scheme, the farmers will be able to get a short term crop
loan of upto Rs. 3 lakh for one year at interest rate of just 4% per
annum.
Salient Features of Crop Loan Interest Subvention Scheme for Farmers
1. Under the new scheme, Central government will provide interest
subvention of 5 percent per annum to all farmers for short term crop
loan of upto Rs. 3 lakh for year borrowed by them during the year
2016-17. Farmers will thus have to pay only the loan with 4% interest.
In case the farmer do not repay the short term crop loan then they have
to pay the 7% interest against 4%. In this case, the farmers will only
be eligible for interest subvention of 2% as against 5% available above.
Interest subvention scheme is applicable for both public and private
sector banks, in addition to cooperative banks, regional rural banks and
NABARD for providing short term crop loan to farmers.
2. In 2016-17, the central government will provide around Rs. 18,276 crore as interest subvention for farmers.
3. The scheme will also provide a relief to small and marginal
farmers who would have to borrow at 9% for the post-harvest shortage of
their produce, the union government has approved an interest subvention
of 2%. This type of farmer will able to get a loan at the interest rate
of 7% upto 6 months under the scheme.
4. A relief to the farmers affected by Natural Calamities will also
be provided under the scheme, the interest subvention of 2% will be
provided to banks for the first year on the restructured amount.
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