India govt may soon consider giving farmers crop loans at a very low interest through cooperative and other banks. In a scheme that may greatly boost the rural economy, India govt is likely to pay two percent interest subsidy to the banks.
Sources say the govt had earlier announced in the budget that the interest subvention scheme giving short term crop loans to farmers at 7 percent annual interest would cover 2012-13.
Besides, schemes such as additional help of three percent for immediate payment by farmers and post-harvest loans against warehouse receipts would be available.
The exercise is intended to reward farmers for paying their loans in time and for keeping their produce in warehouses.
There is general agreement about the fact that farmers need to be provided with easy and affordable credit so that there is spike in the agriculture credit targeted for the current year.