Press Information Bureau
Government of India
Ministry of Agriculture & Farmers Welfare

Rs.20,339 Crore Approved for Interest Subvention in 2017-18: Economic Survey

Rs.20,339 crore has been approved by the Government in 2017-18 to meet various obligations arising from interest subvention being provided to the farmers on short term crop loans, as also loans on post-harvest storages meets an important input requirement of the farmers in the country, specially small and marginal farmers who are the major borrowers. This was stated in the Economic Survey 2017-18 tabled by the Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley in the Parliament today.The Survey further adds that this institutional credit will help in delinking the farmers from non-institutional sources of credit, where they are compelled to borrow at usurious rates of interest. Since the crop insurance under Pradhan Mantri Fasal Bima Yojana (PMFBY) is linked to availing of crop loans, the farmers would stand to benefit from both farmer oriented initiatives of the Government, by accessing the crop loans.

The Survey says that the Government has been undertaking market reforms with a view to ensuring that the farmers benefit from remunerative prices for their produce in the market. The electronic National Agriculture Market (e-NAM) that was launched by Government on April, 2016 aims at integrating the dispersed APMCs through an electronic platform and enable price discovery in a competitive manner, to the advantage of the farmers. While the farmers are advised to undertaken on-line trade, it is also important that they avail themselves of post-harvest loans by storing their produce in the accredited warehouses. The loans are available to Kisan Credit Card (KCC) holding small and marginal farmers at interest subvention of 2% on such storages for a period of upto 6 months. This will help the farmers to sell when they find the market is buoyant, and avoid distress sale. It is, therefore, needful for the small and marginal farmers to keep their KCCs alive, the Survey adds.

Economic Surveys says, that the Government is keen to double the income of the farmers by 2022, for which it has launched several new initiatives that encompass activities from seed to marketing. The credit from institutional sources will complement all such government initiatives like Soil Health Card, Input Management, Per Drop More Crop in Pradhan Mantri Krishi Sinchai Yojana (PMKSY), PMFBY, e-Nam, etc.

Interest subvention supports short-term and post-harvest loans, linking Kisan Credit Card access to crop insurance and market reforms. Government-funded interest subvention subsidises short-term crop loans and post-harvest storage loans for Kisan Credit Card holders, providing a concessional interest benefit on storage loans for up to six months to enable sale timing that avoids distress sales. The subvention is linked with crop insurance under the Pradhan Mantri Fasal Bima Yojana and market reforms such as the electronic National Agriculture Market (e-NAM) to promote institutional credit access and improve farmer incomes.