Maharashtra to give interest-free loans upto ₹3L

Expanding the scope of the existing crop loan scheme that offers loans at 2-3% interest, the Maharashtra Vikas Aghadi (MVA) government on Thursday decided to make available interest-free loans upto ₹3 lakh to seven million farmers in the state

Expanding the scope of the existing crop loan scheme that offers loans at 2-3% interest, the Maharashtra Vikas Aghadi (MVA) government on Thursday decided to make available interest-free loans upto ₹3 lakh to seven million farmers in the state. The state cabinet cleared the proposal on Thursday.

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Of around 12 million farmers that cultivate land for farming in the state, around seven million avail crop loans up to ₹3 lakh at an interest rate of 6%. Of the 6%, the Centre bears the interest of 3% upto the amount of ₹3 lakh, while the state pays 1% interest for up to ₹1 lakh. The farmers had to bear the remaining 2% interest for the loan ranging between ₹1 lakh and ₹3 lakh. Farmers take the crop loans from nationalised, private as well cooperative banks and cooperative credit societies.

With seven million eligible farmers, the state is expected to bear a financial burden of ₹96 crore on account of the waived interest. “We expect at least 4.4 million farmers to avail the extended benefits by paying the annual loan in time. We have been spending ₹870 crore towards the 1% waiver applicable till now. With the expansion of the scheme, we expect an additional burden of ₹96 crore more on the exchequer. Farmers paying their crop loan till June 30 of the next year can avail the benefit. We have directed nationalised, commercial and cooperative banks to make loans available on time as the monsoon has already set in,” said Arvind Kumar, additional chief secretary, cooperation department.

Deputy chief and finance minister Ajit Pawar had announced the scheme in the budget presented in March this year. “The scheme will help farmers purchase seeds, fertilisers and bear the input cost during the sowing in the ongoing kharif season,” the statement issued by the government said.