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A Helping Hand in Times of Distress

The central government had lent its helping hand to the farmers in these times of distress. The cabinet had decided to extend the interest subvention scheme to 2017-18. The scheme is being run since 2006-07.

Nuances of the Scheme
• As per the scheme, 5% of interest subvention will be provided to farmers with short-term crop loans up to Rs. 3 lakh rupees, subjected to prompt payment. This reduces the rate of interest repayable by farmers to 4%.
• The scheme will be implemented by NABARD (National Bank for Agriculture and Rural Development) and RBI.
• The government has set aside an amount of Rs. 20,339 crore to implement the scheme.
• Also, the scheme provides for an interest subvention of 2% for post-harvest storage of produce. This provision is eligible on loans up to 6 months. Farmers can avail such loans on Kisan Credit Card (KCC)
• An additional 2% subvention for all farmers who are affected by natural calamities like floods and depleted rainfall.
• Those farmers who cannot pay the short-term loan promptly will receive only 2% of interest subvention.
• As per the govt, the objective of the scheme is to make short-term agricultural credit affordable to the farmers and thus increase agricultural productivity.

Critics view
Citing that the farmer distress in the country is due to lack of rise in income rather than availability of credit, critics say that the extension of the scheme is of little help to the farmers.

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