Centre extends farm loan interest period by 60 days | india-news | Hindustan Times
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Centre extends farm loan interest period by 60 days

In a step aimed at providing relief to farmers hit by demonetisation, the Centre on Tuesday gave another 60 days for availing of prompt repayment incentive of 3%, to farmers whose crop loan due dates fall between November 1 and December 31 of this year.

india Updated: Dec 20, 2016 17:33 IST
farm loan

The government’s demonetisation move has badly affected farmers as they have little cash to buy agri-inputs for winter crops and are even facing hardship in repaying crop loans.(PTI file)

In a step aimed at providing relief to farmers hit by demonetisation, the Centre on Tuesday gave another 60 days for availing of prompt repayment incentive of 3%, to farmers whose crop loan due dates fall between November 1 and December 31 of this year.

Under the interest subvention scheme, farmers get the short-term crop loan of up to Rs 3 lakh for one year at an interest rate of 7%. Those repaying on time get the loan at 4%.

“It has been decided that an additional grace period of 60 days for prompt repayment incentive at 3 per cent will be provided to those farmers, whose crop loan dues are falling within November 1 and December 2016 and if such farmers repay loan within 60 days,” joint secretary in agriculture ministry, Ashish Kumar Bhutani told PTI.

Suppose a farmer has a crop loan to be repaid on November 15, that farmer will get 60 days more from the due date to repay the loan and avail prompt repayment incentive of 3 per cent, he explained.

A notification in this regard has been issued, he said.

For 2016-17, the government has set a target to disburse agri credit of Rs 9 lakh crore, of which, Rs 7.56 lakh crore has been disbursed to farmers till September of this year, as per the ministry’s data.

The government’s demonetisation move, which pulled out 86% of currency in circulation, has badly affected farmers as they have little cash to buy agri-inputs for winter crops and are even facing hardship in repaying crop loans.

The government has already allowed farmers to buy seeds through old Rs 500 notes from central and state-owned seed companies as well as from ICAR and central varsities. It has also asked the fertiliser companies to sell soil nutrients on credit basis to farmers.