New Delhi: The farm credit target is likely to be raised by a whopping Rs1 lakh crore to Rs10 lakh crore in Budget 2017 in order to increase credit flow in the agriculture sector.
According to officials, the government may increase the agriculture credit target to Rs10 lakh crore for 2017-18 fiscal from the existing Rs9 lakh crore.
During April-September period of 2016-17 fiscal, about Rs7.56 lakh crore credit has been disbursed to farmers and the total target is likely to be surpassed. That apart, the government may also allocate Rs10,000 crore for Pradhan Mantri Fasal Bhima Yojana (PMFBY) in the Union budget to be presented by finance minister Arun Jaitley on 1 February.
For this fiscal, the government had allocated Rs5,500 crore for this scheme, but later it was increased to over Rs13,000 crore in the revised budget estimate. The PMFBY, which was launched in April 2016 by Prime Minister Narendra Modi, aims to increase the crop insurance coverage in the country by charging very low premium from farmers and promising full payment of claims.
The government provides short-term crop loans up to Rs3 lakh at subsidised interest rate of 7% per annum. An additional incentive of 3% is provided to farmers for prompt repayment of loans within due date, making an effective interest rate for them at 4%.
Recently, the government waived Rs660.50 crore interest on short-term crop loans for November-December 2016 to provide relief to farmers who reeled under cash crunch on account of demonetisation.