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HomePoliticsIndiaFarmers to get additional 60 days to repay loans

Farmers to get additional 60 days to repay loans

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New Delhi: Following the recent invalidation of old Rs 500 and Rs 1,000 notes, the Modi government was told that farmers are finding it difficult to repay their loan dues within the prescribed time limit. In order to address their plight, the government has decided to provide an additional grace period of 60 days to such cultivators, the deadlines of whose crop loan dues fall between 1 November and 31 December.

This is along the lines of RBI circular dated 21 November. The government has issued a notification in this regard. ”Appreciating the requirement for some more time by the farmers to repay their loan dues, the government has on the lines of RBI circular dated November 21 decided to provide an additional grace period of 60 days to such of the farmers, whose crop loan dues fall due between November 1 and December 31 and if such farmers repay the same within 60 days with effect from the date on which the repayment was due, they will be eligible for prompt repayment incentive for 2016-17,” the Ministry of Agriculture said in a statement today.

Minister of Agriculture and Farmers’ Welfare Radha Mohan Singh has tweeted:

If the entitled farmers repay the amount within 60 days with effect from the date on which the repayment was due, they will be eligible for prompt repayment incentive for the financial year 2016-17.

The government provides crop loans at subvented rates of interest at the rate of 7% per annum at the ground level. An added incentive of 3% per annum is provided to crop producers for prompt repayment of loans within due date up to a maximum period of a year. The notification means that a farmer who had to clear his dues by 15 November of this year can now repay by 15 February of the coming year and still be eligible for the 3% incentive.

The prompt farmers, in effect, avail short term crop loans at the rate of 4% per annum. This prompt repayment incentive, however, does not benefit farmers who repay after a year of availing such loans.

The government’s target for disbursal of agricultural in the year 2016-17 is Rs 9 lakh crore. According to the Agriculture Ministry, Rs 7.56 lakh crore of that amount has been disbursed to farmers as till September already.

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