Coronavirus Lockdown: Govt extends subsidy on short-term crop loans up to Rs 3 lakh till 31 May

New Delhi: Amid the lockdown to curb COVID-19, farmers will continue to get short-term loan of up to Rs 3 lakh at a subsidised interest rate of seven percent, and prompt repayers will get it at four per cent as the government extended the subsidy to banks till 31 May.

In a statement, the agriculture ministry said the interest subsidy has been extended to all crop loans of up to Rs 3 lakh given by banks which are due or will be due between 1 March, 2020 and 31 May, 2020.

The decision comes as many farmers are not being able to go to banks for payment of their loan dues on account of restrictions imposed due to the lockdown, it said.

Moreover, due to difficulties in timely sale and receipt of payment of their produce, farmers may face issues in repayment of loans which are due during this period, it added.

Under the Interest Subvention Scheme, a subvention of two percent per annum is provided for short-term crop loan of up to Rs 3,00,000 per farmer, provided the lending institutions make available short-term credit at the ground level at seven per cent per annum to farmers.

An additional interest subvention of three percent per annum is available to the “prompt payee farmers”, thus providing loans at 4 percent per annum interest rate on timely repayment.