To provide relief to the farmers hit by cash crunch, the Indian Government today announced that the farmers were given them an additional two months to repay their crop loans due in November – December period and said that the prompt repayment would be eligible for the 3 per cent interest subsidy. Under the interest subvention scheme, farmers get the short term crop loans upto Rs 3 lakhs for one year at an interest rate of 7 per cent.
Following the recent demonetization of specified bank notes, the government said that it is seized of the constraints faced by the farming community in repayment of loan within dues in the prescribed time limit. The government provides crop loans at reasonable interest rate of 7 per cent per annum. This prompt repayment incentive however does not accrue to those farmers who repay after one year of availing such loans.