Union Cabinet approves ISS for farmers

Speed Post News Network

New Delhi : The Union Cabinet chaired by PM Narendra Modi has approved the Interest Subvention Scheme (ISS) for farmers for the year 2017-18. This will help farmers getting short term crop loan up to Rs. 3 lakh payable within one year at only 4% per annum.  The government has earmarked a sum of Rs. 20,339 crore for this purpose, according to a PIB release.

The interest subvention ( subsidy offered on interest rate) will be given to Public Sector Banks (PSBs), Private Sector Banks, Cooperative Banks and Regional Rural Banks (RRBs) on use of own funds and to NABARD for refinance to RRBs and Cooperative Banks. The ISS will continue for one year and it will be implemented by NABARD and RBI. The objective of the scheme is to make available at ground level short term crop loans at an affordable rate to give a boost to agricultural productivity and production in the country, according to the PIB release.

The Central Government will provide interest subvention of 5 % per annum to all prompt paying  farmers for short term crop loan up to one year for loan up to Rs. 3 lakhs borrowed by them during the year 2017-18. Farmers will thus have to effectively pay only 4% as interest. In case farmers do not repay the short term crop loan in time, they would be eligible for interest subvention of 2%.