Relief for indebted farmers from drought-hit regions

In a major relief to farmers from 15 drought-affected districts, the state government has decided to restructure their farm loans amounting to Rs 7,000 crore.

In a major relief to farmers from 15 drought-affected districts, the state government has decided to restructure their farm loans amounting to Rs 7,000 crore.

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Chief minister Prithviraj Chavan made this announcement after meeting bankers in the state on Monday. Last year, various banks and financial institutes had disbursed farm loans worth Rs 25,000 crore, which couldn’t be repaid by farmers from drought-hit areas because of severe crop failure.

“The state Cabinet will soon take a decision on restructuring of debt,” said Chavan. According to him, the state plans to give out Rs 34,000 crore as farm loans next season. A target of Rs 1 lakh crore finance has been set for farming and other sectors this financial year.

State farmers get a loan of Rs 1 lakh at an annual interest rate of 0 per cent. They are charged 2 per cent interest on a loan of up to Rs 3 lakh.

The government pays for the interest subsidy on loans provided by national and cooperative banks. Some cooperative banks in drought-affected areas are expected to get financial help to procure a banking licence, said Chavan.