28 July 2022, New Delhi: With a view to ensure availability of agriculture credit at affordable rate, the Department of Agriculture and Farmers’ Welfare (DA&FW) of Government of India is implementing an interest subvention scheme under which short term crop loans up to Rs. 3.00 lakh are provided at 7% per annum.
Also, additional interest subvention of 3% per annum is provided to farmers making timely repayment, thereby, reducing effective rate of interest to 4% per annum. This facility is also available to farmers engaged in Animal Husbandry & Fisheries for working capital loan upto Rs. 2 lakh.
There is no proposal under consideration by the Union Government to waive off loans of farmers. However, the Government of India/ RBI, have inter-alia, taken the following major initiatives for welfare of farmers and to reduce their debt burden.
Collateral-free agricultural loan limit of Rs 1.6 lakh
To enhance coverage of small and marginal farmers in the formal credit system, RBI has decided to raise the limit for collateral-free agriculture loans from Rs. 1 lakh to Rs. 1.6 lakh.
In order to discourage distress sale by farmers and to encourage them to store their produce in warehouse, the benefit of interest subvention is available to small and marginal farmers having Kisan Credit Card (KCC) for a further period of six months post the harvest of the crop on the produce stored in warehouse accredited with Warehousing Development Regulatory Authority (WDRA) against negotiable warehouse receipts, at the same rate as is available on agriculture loan.
Under the interest subvention scheme, to provide relief to farmers affected by ‘natural calamities’, an interest subvention of 2% per annum is available to banks for the first year on the restructured loan amount. Such restructured loans attract normal rate of interest from the second year onwards as per the extant policy laid down by the RBI.
Severe Natural Calamities
To provide relief to the farmers affected due to ‘severe natural calamities’, an interest subvention of 2% per annum is available to banks for first three years/entire period (subject to maximum of five years) on the restructured loan amount. Further, in all such cases, the benefit of prompt repayment incentive @ 3% per annum shall also be provided to the affected farmers.
To bring small, marginal, tenant farmers, oral lessees, etc. into the fold of institutional credit, Joint Liability Groups (JLGs) have been promoted by banks.
Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)
Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme has been implemented to provide an assured income support to all farmers, irrespective of the size of their land holdings subject to the exclusion factor. Under this scheme direct income support @ of Rs. 6,000 per year is being transferred directly into the bank accounts of beneficiary farmers, in three equal installments of Rs. 2,000 each.