Farmers can continue to get cheap farm loans, with finance minister Arun Jaitley raising the target for loan disbursal to the farmers to Rs 8,00,000 crore.
Farmers will continue to get loans at a concessional interest rate of 7% and those making timely payments will get a further rebate of 3%, so that they pay an effective rate of 4%.
In fact, the target for farm loan disbursal has been raised consistently. For example, in 2010-11, the loan target was raised by more than 15% at Rs 3.75 lakh core, as against Rs 3.25 lakh crore in 2009-10. India’s aggressive farm credit policy — ranging from soft loans to higher support prices — has put soft cash into stressed farmhands and cushions the impact of weather shocks and crippling droughts.
Lauding the measures for the sector, agriculture minister Radha Mohan Singh said: “Till now, agriculture used to be on the sidelines in union budgets but this is the first time that agriculture has been given a place of pride in the budget.”