Updated: March 9, 2021 2:18:53 am
Over 90 per cent farmers in Maharashtra will now be eligible for interest-free crop loans, as announced by state Finance Minister Ajit Pawar during his budget speech in the Assembly on Monday. This provision has been made for farmers who are prompt with their repayment.
During his speech, Pawar talked of issues farmers faced in repaying interest on crop loan. “Paying interest on crop loan was also often a problem for farmers. To free them from the burden and preventing them from turning defaulters, the government has decided to provide zero per cent interest crop loans to farmers who take loans up to Rs 3 lakh and repay it on time. The amount of interest on crop loan will be paid by the government on behalf of the farmers. Required funds will be provided by the government,” he said.
Crop loan refers to small-term finances availed by farmers at the beginning of the cropping season to finance their needs for inputs such as seeds, fertilisers and labour. To help farmers and to prevent them from getting into a debt trap with private moneylenders, financial institutions are encouraged to lend to them under the priority sector at a reasonable interest rate of 7 per cent Timely repayment of loans attracts 2 per cent rebate from the central government and a further 3 per cent rebate from the state government for regular repayment. Thus, the effective rate of interest is brought down to 2 per cent.
In Maharashtra, bankers pointed out that 80 per cent farmers, who avail institutional finances, would come under this bracket. To avail interest-free loans, farmers would have to be regular in their repayment schedule. “The scheme comes close to the recent loan waiver scheme and the government is hopeful it will help bring in financial regularity for farmers,” a banker said.
Soon after it came to power, the Maha Vikas Aghadi government, led by Chief Minister Uddhav Thackeray, had announced Mahatma Jyotirao Phule farmer loan waiver scheme, under which Rs 19,929 crore has been credited to the accounts of 31,23,000. The interest-free loan is aimed to keep the financial discipline in the agricultural sector.
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