In view of several restrictions on farmers during the nationwide lockdown to combat the spread of coronavirus outbreak, the Central Government on Monday decided to extend the benefit of 2 per cent Interest Subvention (IS) to banks and 3 per cent Prompt Repayment Incentive(PRI) to all farmers up to May 31, 2020 for all crop loans up to Rs 3 lakh.
The decision will allow farmers to repay such loans up to the extended period at 4 per cent annual interest without attracting any penalty.
Officials of Agriculture Ministry said that the extension of IS and PRI benefit upto May 31, 2020 on the short term crop loans upto Rs.3 lakh which are due upto May, 31 2020, will help the farmers to repay such loans upto the extended period at 4 per cent per annum interest without attracting any penalty .
Officials said that many farmers are not able to travel to bank branches for payment of their short term crop loan dues. “Moreover, due to restrictions on movement of people and difficulty in timely sale and receipt of payment of their produce, farmers may be facing difficulties in repayment of their short term crop loans falling due during this period,” officials added.
The Centre is currently providing concessional crop loans to farmers through banks. Under the scheme, an additional 2 per cent interest subvention is provided to farmers repaying loans promptly. For such farmers, the effective rate of short-term crop loans works out to be 4 per cent per annum. The objective of the scheme is to make available at ground level, agricultural credit for Short Term crop loans at an affordable rate to give a boost to agricultural productivity and production in the country.
Earlier, in a letter to Prime Minister Narendra Modi, NCP president and former union minister Sharad Pawar said the the condition of farmers has worsened due to untimely rains and hailstorms in some parts of the country, impairing their repayment capacity. “ The complete lockdown has disrupted agriculture operations due to unavailability of labourers and other resources, leaving standing crops unattended, halting harvesting, and impeding farmers' access to transportation, warehousing, marketing and export”, the letter read.
