Finance minister Nirmala Sitharaman (File photo: ANI)NEW DELHI: Keeping in view the crucial role the farm sector will play in an economic recovery and the needs of a large section of the population, the government on Thursday announced concessional credit of Rs 2 lakh crore for farmers and earmarked an additional Rs 30,000 crore as an emergency working capital for small and marginal landholders to ensure uninterrupted farming operations during the main Kharif sowing season beginning June.
In a linked move, finance minister Nirmala Sitharaman also announced Rs 6,700-crore working capital to states for procurement of agriculture produce. This will be crucial in ensuring cash in farmers’ hands through procurement of Rabi (winter-sown) crops such as wheat, mustard, pulses and coarse cereals at minimum support price (MSP).
The emergency working capital funding of Rs 30,000 crore will be implemented through Nabard, which will extend additional refinance support to rural cooperative and regional rural banks.
Sitharaman said the move would benefit around 3 crore small and marginal farmers for meeting their harvest (Rabi) and Kharif requirements in May and June.
Since the government has verified data of beneficiaries under the ‘income support scheme’ (PM-Kisan), announced ahead of the 2019 Lok Sabha election, it will speed up the process of implementation of credit disbursement for farming operations. Fishermen and animal husbandry farmers — key components of the farm and the allied sector — will also benefit from this concessional credit disbursement drive through Kisan Credit Cards (KCCs). Nearly 25 lakh new KCC holders have already been sanctioned Rs 25,000 crore of loan for their farming and fishing operations.LATEST COMMENTfarmers always get credit on concessional rate.. people of India is fool at least BJP thinks soRaunakSEE ALL COMMENTSADD COMMENT
The crop loan scheme has provisions for providing interest subsidy of 2% per annum, with an additional incentive of 2% in case of prompt and timely repayment. The government had in April announced three months’ loan moratorium for nearly three crore farmers with agricultural loans of Rs 4.2 lakh crore and extended the interest subsidy and prompt repayment incentive deadline from March 1 to May 31 due to the current Covid-19 situation.
Though focus of the announcement on Thursday was primarily around giving concessional loans to farmers, the government had dealt with the cash support aspect through quick disbursal of the first instalment of Rs 2,000 each to eligible beneficiaries under PM-Kisan in the current fiscal.