One pc interest subsidy for ryots

FM announces loans at the rate of 6 pc

Finance Minister Pranab Mukherjee said the government would continue the interest subvention scheme on short-term crop loans for farmers for loans up to Rs 3 lakh per farmer at an interest rate of 7 per cent per annum.

Incentive

If a farmer repaid the short-term loans on time, the government would pay an additional subvention of 1 per cent as incentive. Thus the interest rate for these farmers will come down to 6 per cent per annum.

The Centre has allocated Rs 411 crore more in the Budget for the purpose over and above the allocation made in the interim budget.

The government also hiked the target of agricultural credit for 2009-10 to Rs 3,25,000 crore after achieving last year’s target when it had disbursed Rs 2,87,000 crore of farm loans as against the target of Rs 2,80,000 crore.

Mukherjee said the debt waiver scheme, announced in the 2008-09 Budget, would be extended till December 31 this year in view of the delayed monsoon. The Rs 71,000-crore scheme, which covered 4 crore farmers, had ended in June 2009.

He also announced the setting up of a task force to identify a large number of farmers in Maharashtra who had been left out of the scheme as they had availed loans from private money lenders.

The economic survey painted a dismal picture of the agriculture sector. It said despite an increase in the credit flow to the farming sector, the growth slipped in 2008-09 by 1.6 per cent. There was speculation that the government would announce an array of sops for farmers because of the erratic monsoon this year, but it did not happen.

DH News Service