New Delhi: The government on Monday decided that farmers who availed short-term crop loans at a concessional rate of 4 per cent per annum and missed their repayment after March 1, can now repay by August 31 without paying any penalty.
The decision, taken by the Cabinet headed by Prime Minister Narendra Modi, to extend the loan repayment date will help farmers in avoiding travelling to banks for renewal or repayment of loans during the ongoing COVID-19 pandemic period, an official statement said.
This is the second time the repayment date has been extended.
This decision will help the farmers to repay/renew such loans upto the extended repayment date of August 31 at 4 percent annually, interest without attracting any penalty and thus help them in avoiding travelling to banks for such renewal during this pandemic period, Union Agriculture and Farmers Welfare Minister Narendra Singh Tomar said in a media briefing on the cabinet decisions.
In the wake of the lockdown due to COVID-19 pandemic, there have been restrictions imposed on movement of people. Many farmers are not able to travel to bank branches for payment of their short term crop loan dues, the government said in a statement.
Moreover, due to restrictions on movement of people, difficulty in timely sale, receipt of payment of their produce and the necessity of adhering to social distancing norms, farmers are finding it difficult to arrange the amount to be deposited for renewal and are unable to visit the banks to deposit and draw fresh loans, it said.
Tomar also said the government had borne crop loan interest subsidy of Rs 18,000 crore last fiscal and this might increase in the current year.
With regard to Kisan Credit Card (KCC), the minister said the government has provided KCC to 6.65 crore farmers at present and aims to reach out additional 2.5 to 3 crore farmers.
The farm credit target for the current fiscal has been set at Rs 15 lakh crore.
The government provides concessional Standard Short-Term Agri-loans to farmers through banks with 2 percent p.a, interest subvention to banks and 3 percent additional benefit on timely repayment to farmers thus providing loans upto Rs 3 lakh at 4 p.a. interest on timely repayment.