Government has approved two percent interest subsidy on farm loans and additional three percent for timely repayments. The approval was given for short term crop loans to farmers for the current year. A decision in this regard was taken during the Cabinet meeting in New Delhi today.
The scheme will apply to short term crop loan upto three lakh rupees and the rate will be four percent. The decision involves a total expenditure of 20,339 crore rupees in the current financial year.
The interest subvention scheme will provide a big relief to debt ridden farmers. The decision has come in the back drop of protests by the farmers in different states for loan waivers.