Press Information Bureau

Government of India

Ministry of Finance

13-December-2011 16:50 IST

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 loan in time. The additional subvention was 1% in 2009-10 and 2% in 2010-11. This is being increased to 3% in 2011-12

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in the Rajya Sabha today.

DSM/SS/Hb/SL

Interest subvention increased additional subvention for prompt repayment, keeping short-term crop loans affordable for eligible farmers. The Interest Subvention Scheme subsidises the interest on short-term crop loans up to a prescribed ceiling for a one-year tenure by providing a government-paid subvention, and includes an additional incentive subvention for farmers who repay promptly, which has been increased over successive years.