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06 July 2016
The union cabinet
which met here on Tuesday with Prime Minister Narendra Modi in the chair
approved the interest subvention scheme for farmers for 2016-17.
"The government
has earmarked a sum of Rs18,276 crore for this purpose. This will help farmers
getting short term crop loan payable within one year up to Rs3 lakhs at only 4%
per annum," said a cabinet communique.
According to the
scheme, the central government will provide interest subvention of 5% per annum
to all farmers for short term crop loan upto one year for loan upto Rs3 lakh
borrowed by them during 2016-17. The
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"Farmers will
thus have to effectively pay only 4% as interest. In case farmers do not repay
the short term crop loan in time, they would be eligible for interest
subvention of 2% as against 5% available above," the release added. The Total Investment & Insurance Solutions
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 central government has approved an
interest subvention of 2% i.e an effective interest rate of 7% for loans upto 6
months.
To provide relief to
the farmers affected by natural calamities, the interest subvention of 2% will
be provided to banks for the first year on the restructured amount.
The
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