Modi government Good News: The government says that taking forward the interest subvention scheme will help in maintaining the flow of credit in the agriculture sector. Along with this, the financial health of the lending institutions will also not deteriorate. With the help of this help, banks will be able to meet the cost of capital and they will be encouraged to give short-term loans to the farmers.
The Central Government led by Prime Minister Narendra Modi gave a big gift to the farmers of the country on Wednesday. The Union Cabinet has given its approval to reinstate the interest subvention scheme of 1.5 percent in interest on short term agricultural loans up to Rs 03 lakh. With the approval of the cabinet, farmers will continue to get loans at low interest rates and there will be no burden on banks and other financial institutions giving loans.
So much burden will come on the government
Information and Broadcasting Minister Anurag Thakur gave this information after the cabinet meeting. He said that government banks, private banks, small financial banks, regional rural banks, cooperative banks and computerized PACS will get this help from the government for the financial year 2022-23 (FY23) to 2024-25 (FY25). After this approval of the cabinet, the government will have to make a provision of Rs 34,856 crore in addition to the budget to compensate for the interest subvention.
job opportunities are expected to be created
The government says that taking forward the interest subvention scheme will help in maintaining the flow of credit in the agriculture sector. Along with this, the financial health of the lending institutions will also not deteriorate. With the help of this help, banks will be able to meet the cost of capital and they will be encouraged to give short-term loans to the farmers. The government is also expected to help on the employment front from this decision. Since these loans are given for all other activities related to agriculture including Animal Husbandry, Dairying, Poultry and Fisheries, due to this the government feels that employment will be available due to cheap loans. Opportunities will arise.
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Pay installments on time and then benefit
Those farmers who will pay the loan installments on time, they will get more benefit. Such farmers will get short term loans at an interest of just 04 percent. The cabinet said, ‘To ensure that farmers have to pay minimum interest to banks, the government had introduced Interest Subvention Scheme (ISS), which has now been renamed as Modified Interest Subvention Scheme (MISS). Its goal is to provide short-term loans to farmers at subsidized interest rates. Under this scheme, farmers will get a loan of up to Rs 03 lakh at an annual interest rate of 07 percent for work like agriculture, animal husbandry, dairy, poultry and fisheries. At the same time, the farmers who will pay the installments on time, they will get an additional rebate of 03 percent. That is, such farmers will have to pay interest at the rate of only 04 percent.
Difference between subsidy and subvention
Let us tell you that interest subvention and subsidy are different things. The government gives subsidies to increase production and consumption. Under this, the government itself bears a part of the cost in case of selected goods or services. An example of this is the scheme to provide food grains to the people at affordable rates. At the same time, under the subvention scheme, the beneficiaries are given relief in the interest of the loan. Under this, the government definitely makes the interest cheaper, but does not completely rebate.
This decision for the hospitality sector
Apart from this, the Union Cabinet also approved to increase the fund of Emergency Credit Line Guarantee Scheme for the hospitality sector. Earlier it was Rs 4.5 lakh crore, which has now been increased to Rs 5 lakh crore. In the budget presented in February, it was proposed to increase it to Rs 5 lakh crore. The government has taken this decision to reduce the impact of repeated losses to the hospitality sector due to the Corona epidemic. With this decision, the government hopes that hospitality, tourism and related sectors will get benefit.
