Exclusive savings scheme for farmers

With suicides mounting, the Centre decides to come up with easy investment schemes for farmers, reports Manish Pachouly.

Central government seems to have woken up to the problems faced by farmers across the country. It has decided to come out with a national savings scheme exclusively for farmers.

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A discussion on the features of the scheme would take place in Nagpur on Friday and Saturday with heads of National Savings department from various states attending the same.

The features of the scheme would be based on suggestions made by the senior National Savings authorities attending the meeting. The suggestions were prepared by the authorities following instructions by the central government.

A final feature would be selected by the government in the coming months.

However, officers in the Mumbai office said that the proposed scheme would have easy features that would be in the reach of all the farmers.

It is likely to be of five-year term with one-year lock-in period (lock-in period means the investor won’t be able to withdraw the amount during this period).

Further, the scheme would provide interest of 8.5 per cent per annum on the invested amount. The interest rate would come down if an investor decides to withdraw the amount before the maturity period of five years.

The most important part of the proposal is free insurance cover with the investment. As per the proposal that would be discussed in two days of meeting, in case of death of the investor (farmer) before the maturity of the scheme, his family would get the entire amount that he would have got after the maturity period.

To bring the scheme in reach of all farmers, there is proposal for low denomination certificates. Officers said that the certificates are likely to be in three denominations with lowest being Rs 1,000. The other two denominations would be Rs 5,000 and Rs 10,000.

As per the proposal an investor could invest a minimum of Rs 1,000. “Also, the investor would be able to purchase any number of certificates,” said an officer adding the there would be no limit on investment.

When contacted Nassir Sajjad, Regional Director, National Savings, Mumbai region confirmed that there is proposal for scheme for farmers and also that there would be discussion on it. Sajjad, under whom the entire Maharashtra comes, would also attend the meeting.

Moreover, this would be first exclusive scheme for farmers by the national savings department. Also, the five-year term would be the lowest limit in such category of schemes being run by the department. At present the lowest time limit is in National Savings Certificate (NSC) which is of six years. Another scheme Kisan Vikas Patra (KVP) is of seven years and eight months. The KVP scheme may have been named after farmers (Kisan) but it is open for all.

E-mail author: manish.pachouly@hindustantimes.com