Budget 2018 may hike agriculture credit target to Rs 11 lakh cr as govt aims to get higher farm output

The govt has been providing interest subvention to make available short-term farm credit at an affordable rate and help boost farm output

PTI January 22, 2018 19:07:27 IST
Budget 2018 may hike agriculture credit target to Rs 11 lakh cr as govt aims to get higher farm output

New Delhi: The farm credit target is likely to be raised by a whopping Rs 1 lakh crore to a record Rs 11 lakh crore in the Budget 2018-19 to improve credit flow in the agriculture sector, according to sources. In the current fiscal, the government has kept a credit target of Rs 10 lakh crore. Of which, Rs 6.25 lakh crore has already been disbursed in the first six months till September 2017, the government data showed.

"The government's priority is agriculture. There is a possibility that the credit disbursal target for the agriculture sector will further be increased to Rs 11 lakh crore for the next fiscal," sources said. Since credit is a critical input in achieving higher farm output, the institutional credit will help delink farmers from non-institutional sources of credit where they are compelled to borrow at usurious rates of interest, they said.

Budget 2018 may hike agriculture credit target to Rs 11 lakh cr as govt aims to get higher farm output

Normally, farm loan attracts an interest rate of 9 percent. But the government has been providing interest subvention to make available short-term farm credit at an affordable rate and help boost farm output. The government is providing 2 percent interest subsidy to ensure farmers get short-term farm loan of up to Rs 3 lakh at an effective rate of 7 percent per annum. An additional incentive of 3 percent is being given to farmers for prompt repayment of loans within due date, making an effective interest rate for them at 4 percent.

The interest subvention is given to public sector banks (PSBs), private lenders, cooperative banks and regional rural banks (RRBs) on use of own funds and to Nabard for refinance for RRBs and cooperative banks. It may be noted that all short-term crop loan accounts are being Aadhaar-linked from the current year. Even the Pradhan Mantri Fasal Bima Yojana (PMFBY) is linked to availing of crop loans.

Click here for full coverage of Union Budget 2018.

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

IBPS Clerk recruitment 2020: Application link for 2,557 vacancies opens again tomorrow, register at ibps.in
India

IBPS Clerk recruitment 2020: Application link for 2,557 vacancies opens again tomorrow, register at ibps.in

IBPS CRP for clerk recruitment preliminary exam will be conducted online on 5, 12 and 13 December to fill 2,557 vacancies in 11 participating organisations

SBI Clerk Mains 2020 admit card released at sbi.co.in; exam to be held on 31 October
India

SBI Clerk Mains 2020 admit card released at sbi.co.in; exam to be held on 31 October

SBI Clerk Mains 2020 | The Mains exam question paper will have four sections - Reasoning section, Mathematics section, General Awareness/ Computer knowledge, and English section

With 3.2% expansion in Q1, China becomes first major economy to return to growth since beginning of pandemic
World

With 3.2% expansion in Q1, China becomes first major economy to return to growth since beginning of pandemic

Chinese exporters have benefited from the economy’s relatively early reopening and global demand for medical supplies, according to a National Bureau of Statistics report