New Delhi: The Government has approved two percent interest subsidy on farm loans and additional three percent for timely repayments. The approval was given for short term crop loans to farmers for the current year. A decision in this regard was taken during a Cabinet meeting on Wednesday. The scheme will apply to short term crop loans upto three lakh rupees and the rate will be four percent.
The decision involves a total expenditure of 20,339 crore rupees in the current financial year. This decision will provide a big relief to debt ridden farmers. It has come in the back drop of protests by the farmers in different states for loan waivers.