The Union Cabinet on 5 July 2016 approved the Interest Subvention Scheme for farmers for the year 2016-17.
The Government has assigned a sum of 18276 crore rupees for the purpose. This scheme will help farmers getting short term crop loan payable within one year up to 3 lakhs rupees at only 4% per annum.
Key features of the scheme
• The Union Government will provide interest subvention of 5% per annum to all farmers for short term crop loan payable within one year. Therefore, farmers will have to effectively pay only 4% as interest.
• In case farmers do not repay the short term crop loan in time, then they will be eligible for interest subvention of 2% as against 5% available.
• The government will give approximately 18276 crores rupees as interest subvention for 2016-17.
• The Union Government has approved an interest subvention of 2% i.e an effective interest rate of 7% for loans up to 6 months to give relief to small and marginal farmers who would have to borrow at 9% for the post harvest storage of their produce.
• The interest subvention of 2% will be provided to banks for the first year on the restructured amount to provide relief to the farmers affected by natural calamities.
Now get latest Current Affairs on mobile, Download # 1 Current Affairs App
DISCLAIMER: JPL and its affiliates shall have no liability for any views, thoughts and comments expressed on this article.