Farm loan waivers: The PM Narendra Modi-led Cabinet today in a meeting held in Delhi decided to cut interest rates on the farmers' loans by as much as 4 per cent.
Farm loan waivers: The Prime Minister Narendra Modi-led Cabinet today in a meeting held in Delhi has cut interest rates on farmers’ loans by as much as 4 per cent. Earlier the rate of interest was 9% and it has now been reduced to 5% on loan up to Rs 3 lakh limit, according to an ABP News report. The Union Cabinet has cleared the interest subvention scheme for farmers, as reported by ANI. This decision by the Union Cabinet has come in a time when the farmers in various parts of India are protesting to get their farm loans waived with Maharashtra and Madhya Pradesh taking the front on the issue.
Further, the Cabinet has decided that the crop loans of up to Rs 3 lakh will be made available to the prompt payee farmers at 4% interest rate only. The Cabinet has also approved the total expenditure of Rs 20,339 crore in the current financial year as Interest subsidy on short-term crop loans, according to ANI.
The Union Cabinet headed by Prime Minister Narendra Modi also approved the MoU between India and Palestine on cooperation in the field of agriculture, the signing of MoU between India and Bangladesh for cooperation in the field of IT and Electronics and the signing of MoU between India and Armenia on cooperation on youth affairs. The Union Cabinet has also approved the proposal to introduce Financial Resolution and Deposit Insurance Bill 2017.
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As an interim measure, the Reserve Bank of India (RBI) last month had asked the banks to continue giving the discount on interest on short-term crop loans during the current fiscal. Under the scheme approved by the Union Cabinet today, a subvention of 2 per cent per annum is provided for short-term crop loan of up to Rs 3,00,000 per farmer, provided the lending institutions make available short-term credit at the ground level at 7 per cent per annum to farmers. For 2017-18, the target of agriculture credit has been raised to Rs 10 lakh crore, from Rs 9 lakh crore in 2016-17, as reported by PTI.