In 2022, the government had decided to restore interest subvention for short- term agriculture loans to 1.5 % for all financial institutions after a gap of almost two years. It had said that the measure would require an additional budgetary provision of ₹34,856 crore for the period of 2022-23 to 2024-25 under the scheme. In 2023-24, banks, including cooperative and regional rural banks, disbursed ₹24.84 lakh crore in term loans and crop loans, 15% more than in the previous fiscal.
Banks are urging the government to increase the interest subvention on short-term agriculture loans from the current 1.5% to 2%. This move is aimed at helping banks absorb higher costs of funds and boost credit flow to the agriculture sector in the short term. An additional 3 % subvention is also given to the farmers for prompt and timely repayment of loans .
Presentation- Dibyabharati Nayak
