Question: Recently the Union Cabinet has approved the Interest Subvention Scheme for farmers for the year 2016-17. The Government has earmarked how much amount for this purpose?
(a) Rs. 18,276 Crore
(b) Rs. 19,276 Crore
(c) Rs. 20,000Crore
(d) Rs. 22,000 Crore
Ans: (a)
Related facts:
- On 5 July 2016 the Union Cabinet has approved the Interest Subvention Scheme for farmers for the year 2016-17.
- Interest subvention has been provided to Public Sector Banks, Private Sector Banks, Cooperative Banks, Regional Rural Banks and NABARD for providing short term crop loan to farmers.
- The Government has earmarked a sum of Rs. 18,276 Crore for this purpose.
- This will help farmers getting short term crop loan payable within one year up to Rs. 3 lakhs at only 4% per annum.
- The main features of the scheme are:
- The Central Government will provide interest subvention of 5 per cent per annum to all farmers for short term crop loan upto one year for loan uptoRs. 3 lakhs borrowed by them during the year 2016-17.
- 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% as against 5% available above.
- The Central Government will give approximately Rs 18,276 crores as interest subvention for 2016-17.
- In order to give relief to small and marginal farmers who would have to borrow at 9% for the post-harvest storage of their produce, the Central Government has approved an interest subvention of 2% i.e an effective interest rate of 7% for loans upto 6 months.
- To provide relief to the farmers affected by Natural Calamities, the interest subvention of 2% will be provided to Banks for the first year on the restructured amount.
- In case farmers do not repay the short term crop loan in time they would be eligible for interest subvention of 2% as against 5% available above.
Reference:
http://pib.nic.in/newsite/PrintRelease.aspx?relid=146825
http://www.business-standard.com/article/news-cm/cabinet-approves-interest-subvention-scheme-for-farmers-for-the-year-2016-17-116070600147_1.html