BackInterest subvention for farmers on prompt repayments
Interest subvention for farmers on prompt repayments
Premium
Under interest rate subvention, government pays a part of the interest cost, enabling the lenders to provide cheaper loans to farmers. The additional subvention for prompt borrowers may likely to bring down the level of bad loans from the sector by facilitating easy repayments.
Indian banks have lent Rs4.6 trillion to agriculture and allied activities as on 27 January 2012, as compared with Rs4.3 trillion in the same period last year.
Announcing the proposal in the budget, Finance Minister Pranab Mukherjee said the government will continue the interest subvention scheme for providing short term crop loans to farmers at 7 per cent interest per annum in 2012-13 while an additional subvention of 3 per cent will be available to prompt paying farmers.
Besides, the subvention will also be available on post harvest loans upto six months against negotiable warehouse receipt will also be available, which will encourage the farmers to keep their produce in warehouses.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
