Just reshuffling after the cabinet, central government has come up with a good news for farmers. As per the new interest subvention scheme, farmers can avail short-term crop loans to up to Rs.3 Lakh at a lower interest rate of 7%. Also, the farmers who would repay their loans on time, they can avail the credit at more cheaper rate of interest at 4%.
According to Telecom Minister, Ravi Shankar Prasad, this scheme is applicable for all the farmers availing short-term loans up to Rs.3 Lakh in one year. In the budget 2016-17, government has made a provision of Rs.15,000 Crore towards interest subvention – that will lessen the loan burden on farmers and also would encourage the farmers with less interest rate.
As per scheme , interest subvention would be available to NABARD for providing concessional refinance to RRBs and Cooperative Banks. NABARD is sub vented to the extent of difference between weighted average cost of funds mobilized and refinance rate.