How much interest subsidy for farmers has been approved by Government of India (GoI) for FY17?
The Government of India (GoI) will provide interest subvention of 5 % for all farmers for short term crop loans up to Rs 3 lakh for FY 17 (2016-17), provided they repay in time, or else a higher rate of 7% will be charged. Thus, farmers will have to effectively pay only 4% as interest. Beside this, an interest subsidy of 2 % has also been cleared for loans upto 6 months for small and marginal farmers who would have to borrow at 9 % for the post harvest storage of their produce. For farmers affected by Natural Calamities, the interest subvention of 2 % will be provided to Banks for the first year on the restructured amount. The Interest subvention scheme is for public and private sector banks, cooperative banks, regional rural banks and NABARD for providing short term crop loan to farmers. Earlier, the subvention scheme was implemented by the Finance Ministry. It was transferred to the Agriculture Ministry in 2016.