Cabinet Okays Interest Subvention on Short-term Crop Loans
New Delhi: The Cabinet has decided to continue with the Interest Subvention Scheme (ISS) for farmers for the year 2017-18. This will help farmers getting short term crop loan up to Rs. 3 lakh payable within one year at 4% per annum.
The Government has earmarked a sum of Rs. 20,339 crore for this purpose.
The interest subvention will be given to Public Sector Banks (PSBs), Private Sector Banks, Cooperative Banks and Regional Rural Banks (RRBs) on use of own funds and to NABARD for refinance to RRBs and Cooperative Banks.
The Interest Subvention Scheme will continue for one year and it will be implemented by NABARD and RBI.
The objective of the scheme is to make available at ground level, agricultural credit for short term crop loans at an affordable rate to give a boost to agricultural productivity and production in the country.
For 2017-18, farm credit target has been raised to Rs. 10 lakh crore from Rs. 9 lakh crore in 2016-17, the release added.
In order to give relief to small and marginal farmers who would have to borrow at 9% for the post harvest storage of their produce, the Government has approved an interest subvention of 2% i.e. an effective interest rate of 7% for loans upto 6 months.