Interest subvention
The Union Cabinet has approved the Interest Subvention Scheme for
farmers for the year 2016-17. The Government has earmarked a sum of Rs. 18,276
Crore for this purpose.
- This will help farmers getting short term crop loan payable within one year up to Rs. 3 lakhs at only 4% per annum.
The salient features of the scheme are as
follows:
- The Central Government will provide interest subvention of 5% per annum to all farmers for short term crop loan upto one year for loan upto Rs. 3 lakhs borrowed by them during the year 2016-17. Farmers will thus have to effectively pay only 4% as interest. In case farmers do not repay the short term crop loan in time they would be eligible for interest subvention of 2% as against 5% available above.
- In order to give relief to small and marginal farmers who would have to borrow at 9% for the post harvest storage of their produce, the Central Government has approved an interest subvention of 2% i.e an effective interest rate of 7% for loans upto 6 months.
- To provide relief to the farmers affected by Natural Calamities, the interest subvention of 2% will be provided to Banks for the first year on the restructured amount.
- In case farmers do not repay the short term crop loan in time they would be eligible for interest subvention of 2% as against 5% available above.
