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New Delhi : As per the NSSO Report, about 52 percent of the agricultural households in the country were estimated to be indebted. The average per capita income is Rs 77,112 against the average amount of outstanding loan per agricultural household is Rs 47,000 (approximately).
To reduce the debt burden of farmers and increase the availability of institutional credit to rural areas, the Government with a view to easing the burden of interest payment on farmers, implements Interest Subvention Scheme (ISS) to make short-term crop loans up to Rs.3 lakh including loans through Kisan Credit Card (KCC) for a period of one year available to farmers at the interest rate of 7% per annum and in case of timely repayment, the same gets reduced to 4%.
The interest subvention of 2% and prompt repayment incentive of 3% on restructured crop loans is also given to farmers affected by severe natural calamities for a maximum period of 5 years on the basis of report of Inter-Ministeral Central Team (IMCT) for grant of NDRF assistance and Sub-Committee of National Executive Committee (SC-NEC) is also available. The benefit of ISS has been extended to Animal Husbandry and Fisheries farmers’ too up to loan limit of Rs 2 lakh per farmer so as to reduce the burden of interest component and to provide hassle free short term working capital loans to them.
To facilitate the farmers for issue of KCC, Processing fee, inspection, ledger folio charges and all other service charges for short term crop loans up to Rs.3.00 lakh have been waived off. To bring the maximum number of farmers under KCC to provide loan to them at a cheaper rate under the Interest Subvention Scheme (ISS), the Government has launched a special drive to cover all PM KISAN beneficiaries under KCC. A detailed strategy has been prepared and shared with the participating agencies to be adopted for making the campaign successful.
Under the Kisan Credit Card (KCC) Scheme, a flexible limit of Rs 10,000 to Rs 50,000 is provided to marginal farmers (as Flexi KCC) based on the land holding and crops grown including post harvest warehouse storage related credit needs and other farm expenses, consumption needs, etc. Plus small term loan investments without relating it to the value of land. NABARD finances Joint Liability Groups (JLGs) of ‘Bhoomi Heen Kisan’ for augmenting flow of credit to tenant/landless farmers, extending collateral free loans to them and building natural trust and confidence between banks and JLG members.
This information was given in a written reply by Union Agriculture and Farmers Welfare Minister Narendra Singh Tomar in Lok Sabha on March 3, 2020, according to a PIB release.