Press Information Bureau

Government of India

Ministry of Finance

16-March-2012 13:55 IST

Farmers Have Reasons to Smile: Agriculture Credit Increased to Rs. 5,75,000 Crore, Farmers to Get a Smart Card to Get Easy Money From ATMs

The Finance Minister ShriPranabMukherjee has proposed to raise the target for agricultural credit in 2012-13 to Rs. 5,75,000 crore. This represents an increase of Rs. 1,00,000crore over the target for the current year. By this step, the Finance Minister has tried to ensure that the farmers’ need of timely access to affordable credit is redressed.

As per the budgetary proposals, the interest subvention scheme for providing short term crop loans to farmers at 7 per cent interest per annum will be continued in 2012-13. An additional subvention of 3 per cent will be available to prompt paying farmers. In addition, the same interest subvention on post harvest loans up to six months against negotiable warehouse receipt will also be available. This will encourage the farmers to keep their produce in warehouses.

The Finance Minister Shri Mukherjee proposed to allocate Rs. 10,000 crore to NABARD for refinancing the Regional Rural Banks (RRBs). ShriMukerjee said that a short term RRB credit Refinance Fund is being set up to enhance the capacity of Regional Rural Banks to disburse short term crop loans to the small and marginal farmers.

In a bonanza to the Kisan Credit Card(KCC) holders, the Finance Minister proposed a modification in the KCC scheme. The KCC will now be transformed into smart card which could be used at ATMs also. Thus making it an effective instrument for making agricultural credit available to the farmers in the simplest available way.

To promote agricultural research the Finance Minister has proposed to set aside a sum of Rs. 200 crore.

The Finance Minister announced to operationalise a Government owned Irrigation and Water Resource Finance Company to mobilize large resources to fund irrigation projects.

DSM/DK/LS/27  

Agricultural credit expansion boosts rural liquidity with interest subvention, post harvest support and Kisan Credit Card smart card access. Increase in directed agricultural lending with reinforced interest subvention for short term crop loans, including an additional prompt payment incentive, and extension of subvention to short post harvest loans against negotiable warehouse receipts. Institutional measures include a refinance allocation to strengthen Regional Rural Banks via a dedicated RRB refinance fund, conversion of the Kisan Credit Card into a smart card usable at ATMs to improve credit access, and creation of a government irrigation and water resource finance company alongside funding for agricultural research.