A day after the Central Government asked the State Government to submit its memorandum for drought assistance and Union Minister Dharmendra Pradhan blamed the State Government for not submitting the same as yet, Chief Minister Naveen Patnaik on Friday sought intervention of Prime Minister Narendra Modi requesting him timely financial assistance in combating the drought situation.
In a letter to Modi, Patnaik highlighted about the decision of his Government to reduce interest rate on crop loans from existing 2 per cent to 1 per cent.
“As against the decision of the Union Government to provide crop loans to the farming community at 7 per cent rate of interest, the State has been providing interest subvention to the commercial and cooperative banks to bring down the rate of interest to 5 per cent and in case of prompt payment, the effective rate of interest has been 2 per cent per annum after adjustment of the interest incentive made available by the Union Government,” the letter stated.
“Keeping in view the prevalent drought situation, the State Government has decided to further reduce the rate of interest on crop loans from the existing 5 per cent to 4 per cent through interest subvention by the State Government for .small, marginal and medium farmers,” the letter further stated, adding that this would ultimately reduce the effective rate of interest on crop loans from the existing 2 per cent to one per cent in the case of prompt paying farmers.