The government has set Rs 15 lakh crore agriculture credit target for FY21, up from Rs 13 lakh crore last year.
The Centre has covered 45% of targeted 2.5 crore farmers under the ambit of Kisan Credit Card (KCC) in the last two and half months making them eligible for the concessional agriculture credit. As many as 1.12 crore KCCs have been sanctioned with credit limit of Rs 89,810 crore as on July 24, finance minister Nirmala Sitharaman tweeted.
She also said that only in July, 41.66 lakh KCCs have been approved with nearly Rs 27,000 crore credit limit till last Friday.
Announcing the AatmanirbharBharat package on May 14, Sitharaman had said that the government would cover 2.5 crore PM-Kisan beneficiaries, so far left out from the ambit of the KCC, under the official credit net through a special drive. The Centre hopes to disburse Rs 2 lakh crore to these farmers, including those in animal husbandry and fishery sectors. Farmers are eligible to get short-term crop loan up to Rs 1 lakh without collateral through KCC.
While the Centre bears 5% subsidy on crop loan for those who repay in time, many states have further subsidised agriculture credit from their own funds. In making credit available to farmers at cheaper interest rates, the Centre bears the administrative costs (0.2%) and the interest subsidy to Nabard. The Centre has allocated Rs 21,175 crore on interest subsidy for FY21 against Rs 17,863.43 crore last year.
The government has set Rs 15 lakh crore agriculture credit target for FY21, up from Rs 13 lakh crore last year. The actual disbursal was about Rs 13.6 lakh crore in FY20. Out of total agriculture credit, 65% is disbursed as short-term (repayment period within a year) crop loans. The share of institutional credit is approximately 72%, according to Nabard All India Rural Financial Inclusion Survey (NAFIS) 2016-17.