Agri Lending

The Union Cabinet on Wednesday approved interest subvention of 1.5 per cent on short-term agriculture loans of up to Rs 3 lakh for all financial institutions, a move aimed at ensuring adequate credit flow in the farm sector. The Cabinet, chaired by Prime Minister Narendra Modi, has approved restoring interest subvention on short-term agriculture loans of 1.5 per cent for all financial institutions, Information and Broadcasting Minister Anurag Thakur said. The 1.5 per cent interest subvention will be provided to lending institutions (public and private sector banks, small finance banks, regional rural banks, cooperative banks and computerised Primary Agriculture Credit Societies) for the financial year 2022-23 to 2024-25 for providing short-term agri loans of up to Rs 3 lakh to farmers. "This increase in Interest Subvention support requires additional budgetary provisions of Rs 34,856 crore for the period of 2022-23 to 2024-25 under the scheme," an official statement said. The incre

States which rolled out farm loan waiver schemes in the recent months are witnessing sluggish growth in rural bank lending. Agriculture accounts for more than 80 per cent of lending in rural areas. Across the country, agriculture lending growth has come down to around 5.8 per cent on a year-on-year basis as on September 2017, against about 15.9 per cent in the same period last financial year. This is one of the steepest fall in agriculture lending by banks in the last few years. Fall in agriculture lending is also likely to impact food grain production, which is already showing a downward trend. According to the first advance crop estimates for foodgrain production by the government, total food grain production in the country in 2017-18 is pegged at around 134.67 million tonnes, against 135.03 million tonnes as par the first advance estimates in 2016-17.In Maharashtra, rural lending by banks in Q2 of the present financial year was around 6 per cent less compared to same period last .