Interest Waiver on Farmers Loans: An Urgent Call

Key Highlights

• Zero percent interest on timely repaid crop loans.
• Loans are available twice a year for the Rabi and Kharif seasons.
• Kisan Credit Card (KCC) offers up to ₹3 lakh low-interest loans.
• Interest subsidies: 4% from the central, 3% from the Rajasthan government.
• A penalty of 10% interest for late repayment.
• The scheme helps farmers avoid becoming defaulters and remain eligible for future loans.

The government is urging farmers to take advantage of a new plan to waive the interest on their loans. This initiative aims to support farmers by reducing their financial burden. Here's what you need to know about the government's plan and how it can benefit you.

Government's Plan to Help Farmers

The government has introduced several beneficial schemes for farmers, with the crop loan scheme being particularly popular. This scheme provides loans to farmers at very low interest rates. Farmers who repay their loans on time can benefit from a zero percent interest-free crop loan scheme, where they only need to repay the principal amount. The government fixes the dates for giving and repaying these loans, which are provided twice a year for the Rabi and Kharif seasons. The goal is to offer farmers cheap loans for farming, reducing their reliance on high-interest loans from the village moneylenders.

Kisan Credit Card Scheme

Under the Kisan Credit Card (KCC) scheme, farmers can get loans from banks at very low interest rates, much lower than those of moneylenders. This scheme is less risky for farmers and even includes provisions for loan waivers during natural calamities like droughts, floods, and storms.

Who Will Benefit from the Interest Waiver?

Farmers who took loans for farming or animal husbandry during the Kharif season 2023 (from April 1, 2023, to August 31, 2023) will benefit. If these farmers repay their loans by June 30, 2024, or within one year from the date of the loan, they will not have to pay any interest. They will only need to repay the principal amount.

Penalties for Late Repayment

Farmers who fail to repay their loans by the deadline will not be eligible for the zero interest-free crop loan scheme. They will have to pay 10 percent interest according to the rules. Therefore, the government is urging farmers to repay their loans on time to avoid this penalty.

Benefits of Timely Loan Repayment

Farmers who repay their loans on time receive an interest subsidy from the government. This includes a 4 percent subsidy from the central government and a 3 percent subsidy from the Rajasthan government, totaling 7 percent. This means farmers do not have to pay any interest if they repay on time. Loans are provided at a 7 percent interest rate from cooperative societies, but with the subsidies, farmers effectively pay no interest.

Avoiding Default

The zero percent interest-free crop loan scheme also helps farmers avoid becoming defaulters. Timely repayment allows farmers to benefit from interest subsidies and remain eligible for future loans. If a farmer becomes a defaulter, banks will be less likely to provide new loans, making it harder for them to get credit when needed.

Kisan Credit Card Loan Limits

Farmers with a Kisan Credit Card can easily obtain loans up to ₹3 lakh for agriculture and agricultural activities at low interest rates. Loans up to ₹1.60 lakh are given without any guarantee, while a guarantee is required for higher amounts. Initially, farmers can get a loan of ₹50,000, which can increase if they repay on time. The Kisan Credit Card scheme has benefited many farmers, with around 8 crore farmers holding these cards and loans worth ₹20 lakh crore distributed in the year 2023-24.

Also Read: Tractor Distribution Scheme 2024: Apply Now for Subsidized Tractors

CMV360 Says

The government's interest waiver and zero percent interest-free crop loan schemes provide significant financial relief to farmers. By repaying loans on time, farmers can avoid penalties, receive subsidies, and stay eligible for future loans. Farmers are encouraged to take advantage of these schemes to reduce their financial burden and support their agricultural activities.