(a) the details of prevalent rates of interest on crop loan in the country;
(b) whether the Government proposes to slash interest rate on crop loans to farmers;
(c) if so, the details thereof;
(d) whether the farmers are not getting the benefits of conversion of crop loan into term
loan due to drought, floods etc.;
(e) if so, the details thereof and the reaction of the Government thereto; and
(f) the remedial steps taken/being taken by the Government in this regard?
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI NAMO NARAIN MEENA)
(a) to (c): The Interest Subvention Scheme is being implemented by the Government of India
since 2006-07 to make short-term crop loans upto Rs. 3 lakh for a period of one year available
to farmers at the interest rate of 7 percent per annum. The Government of India has since
2009-10 been providing additional interest subvention to prompt payees farmers, i.e., those
who repay their loans in time. The additional subvention was 1% in 2009-10, 2% in 2010-11 and
3% in 2011-12. Further, in order to discourage distress sales, the benefit of interest subvention
was made available in the year 2011-12 to small and marginal farmers having Kisan Credit Card
for a further period of up to six months post harvest on the same rates as available to crop
loans against negotiable warehouse receipts for keeping their produce in warehouses. The Interest
subvention Scheme for the year 2011-12 has been continued in 2012-13 as well.
(d) to (f): In order to provide relief to bank borrowers in times of natural calamities, Reserve
Bank of India (RBI) has issued standing guidelines to banks. The relief measures, inter alia,
include conversion of the principal amount outstanding in the short term loan as well as interest
due for repayment in the year of occurrence of natural calamity into term loans for period
ranging from 3 to 10 years depending upon the frequency of crop failures/intensity of damage
to crops, etc.
In order to provide relief to farmers in drought affected areas, the Government of India has
issued instructions on 17.09.2012 to banks that in cases where short term crop loans are
restructured due to drought as per RBI guidelines, the interest subvention already available
for short term crop loans will continue to be available for the current financial year on the
full restructured amount. Such restructured loans will attract normal rate of interest from
next financial year onward as per the policy laid down by the RBI.