The government has no plans to waive farm loans but there are schemes to reduce costs by timely repayment of the amount borrowed, the government said in Parliament on Tuesday.
“There is no proposal under consideration of the union government to waive...loans of farmers of the country. However, to reduce the debt burden of farmers...major initiatives have been taken,” Minister of State for Finance Santosh Kumar Gangwar said in a written reply in Rajya Sabha.
He was replying to a query whether the government was seeing a growing demand to write off farm loans.
Farmers are given loans at reduced rate of 7 per cent for crop loans of up to Rs 3 lakh under the Department of Agriculture, Cooperative & Farmers’ Welfare with an interest subvention scheme.
Under the scheme, additional subvention of 3 per cent is given to those farmers who repay their short term crop loan in time, thereby reducing the effective rate of interest to 4 per cent per annum for such farmers, he said.
Besides, lending agencies are instructed to provide relief measures in cases of natural calamities that not only restructures existing crop loans but also extends fresh loans, the minister added.
The benchmark for initiating relief measures by banks has also been reduced to 33 per cent crop loss in line with the National Disaster Management Framework, Gangwar said.