CM?s gift: Farm loan interest rate slashed | india | Hindustan Times
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CM?s gift: Farm loan interest rate slashed

CHIEF MINISTER Shivraj Singh Chouhan on Wednesday announced lowering of interest rate on co-operative agricultural loan to seven per cent and stamp duty exemption on loan up to Rs 10 lakh.

india Updated: Sep 28, 2006 14:49 IST

CHIEF MINISTER Shivraj Singh Chouhan on Wednesday announced lowering of interest rate on co-operative agricultural loan to seven per cent and stamp duty exemption on loan up to Rs 10 lakh.

The decision, to be effective from April 1, 2006, is likely to have a major impact as it will see a straight drop of at least three per cent in the interest rate. Prior to this, the interest rate on co-operative agricultural loan ranged from 10 to 16.5 per cent.

The lower interest rate is estimated to put an additional financial burden of Rs 120 crore. Of this, the State Government will bear Rs 80 crore.

Speaking at the 125th meeting of State Level Bankers Committee (SLBC) at the Central Bank of India zonal office, Chouhan also announced to simplify procedure for no-dues certificate for farmers to get cooperative loan. A no-dues certificate costs some Rs 1,500 to a farmer.

Chouhan said suggestions were received at the recent Kisan Panchayat to make agriculture a profitable proposition. Co-operative agricultural loan amounting to  Rs 2,600 crore are given annually to farmers in the State.

The Chief Minister asked members of the bankers’ committee to make available more funds for employment-oriented trades to increase per capita income of the State. The credit flow to farm sector has doubled in the last two years.

Terming the credit card facility a boon to farmers, the CM said it freed them from money-lenders’ clutches. Twenty-five lakh farmers in the State are still deprived of the facility.

He suggested that loans provided to farmers for tractors be more practical as small farmers often get trapped in debt instead of earning profit. He also suggested more loan facilities to women self-help groups (SHGs).

Chouhan released a souvenir and inaugurated the Madhya Pradesh website of the SLBC. Central Bank of India Executive Director K Subbaraman, who presided, said efficient performance of banks facilitated doubling of credit flow to farm sector in the last two years.

During 2005-06, the rural and semi-urban branches of banks   exceeded the credit facility target. During this period, 27 per cent more farmers were extended the credit facility.

The banks have also extended their help in providing succour to the flood-affected in the State. The situation on advance and farm credit front in the State is better as  compared to national norms, he claimed.

A State Level Brisk Award function was also organised on the occasion. Chouhan presented awards to district collectors, district managers of lead banks and tehasildars under brisk recovery incentive scheme for 2004-05 and 2005-06. Principal Secretary, Rural Development, Pradeep Bhargawa; Principal Secretary, Finance, Sumit Bose; Principal Secretary, Gramodyog, Anshu Vaish; Secretary, Agriculture, Pravesh Sharma; Director, Institutional Finance, Ashok Varnwal and Chief Minister’s Secretary Anurag Jain were also present.

The largesse

1 Interest rate lowered to 7 per cent from 10-16 per cent

2 Lower interest regime effective from April 1 this year

3 Stamp duty exemption on loan up to Rs 10 lakh

4 To put an additional financial burden of Rs 120 crore

5  Govt will bear Rs 80 crore

6 Bankers’ committee asked to back employment-oriented trades

7 More loan facilities to women SHGs suggested