Government extends crop loan repayment date until August 31; encourage repayers to benefit

NEW DELHI: The government decided on Monday that farmers who have received short-term crop loans at a preferential rate of 4% per annum and have not repaid after March 1 can now repay before August 31 without paying penalty.
The decision, taken by the Cabinet headed by Prime Minister Narendra Modi, to extend the loan repayment date will help farmers avoid going to banks for renewal or repayment of loans during the ongoing COVID-19 pandemic period, according to an official statement.
This is the second time that the repayment date has been extended. Previously, it had been extended until May 31.
Normally, agricultural loans carry an interest rate of 9 percent. But the government is giving a 2 percent interest subsidy to ensure that farmers get short-term agricultural loans of up to Rs 3 lakh at an effective rate of 7 percent per year.
However, the interest rate is even lower, at 4 percent, for farmers who repay their loans on time. The decision of the Council of Ministers will benefit these categories of farmers.
“Farmers who repay their loan before August 31 will benefit from a concessional interest rate of 4 percent, which is intended for quick repayments,” Agriculture Minister Narendra Singh Tomar told media after the meeting.
When asked if extending the repayment period to August 31 meant the COVID-19 crisis would continue until then, Tomar replied, “No one in government is an astrologer” .
“The government is working to reduce the inconvenience caused to people. Previously, we believed that the movement of people would become fluid by May 31. loan repayment deadline. So there is no point in making the connection with other things, ”he said.
Following the lockdown due to the COVID-19 pandemic, restrictions were placed on the movement of people. Many farmers are unable to visit bank branches for payment of their short-term crop loan contributions, the government said in a statement.
In addition, due to restrictions on the movement of people, difficulties in selling on time, receiving payment for their products and the need to adhere to social distancing standards, farmers find it difficult to organize the amount. to deposit for renewal and cannot visit banks to deposit and withdraw new loans, he said.
Tomar also said the government took over an interest subsidy on crop loans of Rs 18,000 crore in the previous fiscal year and that this could increase in the current year.
As it concerns Kisan credit card (KCC), the minister said the government has provided KCC to 6.65 crore farmers at present and aims to reach 2.5-3 crore more farmers.
The agricultural credit target for the current fiscal year has been set at Rs 15 lakh crore.

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