India / Modi cabinet's big announcement for farmers, 1.5 percent rebate in interest on loan

New Delhi : Modi government has made a big announcement for the farmers. The Union Cabinet, chaired by Prime Minister Narendra Modi on Wednesday, has continued the Interest Subvention Scheme for farmers for short term loan repayments. That is, the farmers who have taken a short term loan of up to Rs 3 lakh, will get a rebate of 1.5 percent in interest.

The Narendra Modi government has retained the interest subvention scheme, giving huge benefits to the farmers. Under this, farmers will get 1.5 percent rebate in interest for short term up to three lakhs. The central government would require an additional budgetary provision of Rs 34,856 crore for the period 2022-23 to 2024-25 to implement the scheme. To compensate, the government will make these payments directly to the lending banks and cooperatives.

What are its benefits

Continuing interest subvention will ensure the financial health and viability of lending institutions, especially regional rural banks and co-operative banks, which will ensure adequate agricultural credit to the rural economy. This will encourage farmers to take loans for short-term agricultural needs and enable more and more farmers to get the benefits of agricultural credit. This will also create employment. Which will directly encourage farmers for all activities including animal husbandry, dairy, poultry, fisheries. Farmers will be able to get short term agricultural loans for these small businesses at low interest. Farmers will continue to get short-term agricultural loans at an interest rate of 4% per annum while repaying the loan on time.

What is Subvention Scheme

Farmers are given loans for short and long term at low interest rates through cooperatives and banks by the government. Many farmers repay this loan on time and while many farmers are unable to repay it on time due to some reason. The farmers who repay the loan on time will get the benefit of interest subvention scheme.