Farmers to get cheaper loan from co-ops

MUMBAI: Goodies continue to flow in for farmers. If the poll-bound UPA can announce a massive loan write-off, how can the Congress-NCP government in the state stay behind? Those farmers who have paid off their debt in time can now look forward to a much-reduced rate of interest on their fresh loans. The announcement to this effect was made by finance minister Jayant Patil on Wednesday.

Mr Patil announced in the legislature that farmers who apply for loan up to Rs 25,000 from the three-tier co-operative structure in the state would get a subsidy of 4% in the rate of interest. This subsidy would help them avail loan at 2% effective rate of interest, as the Centre has announced farm loans at 7% rate of interest since 2007 and the state has offered a concession of another 1%. Farmers taking loans in excess of Rs 25,000 but less than Rs 3 lakh would be eligible for a 2% cut in the rate of interest.

Mr Patil told the Assembly that the state government had made a budgetary provision of Rs 63.64 crore for the next fiscal to bear the cost of this interest subsidy. The state has also set aside Rs 204 crore for the co-operative lending institutions to settle all outstanding claims under this scheme. ���I am confident that the farmers repaying the loans of the co-operative bodies would be enthused by this decision,��� Mr Patil said.

Under the relief measures announced by the prime minister for Vidarbha farmers, the government has waived interest amounting to Rs 828 crore on rescheduled principal of farm loan in 2006-07 and 2007-08. This scheme was announced for six districts of Vidarbha reporting highest number suicides.

The state has borne a share of Rs 414 crore in this scheme. In 2007-08, the state government provided Rs 130 crore to facilitate farm loan disbursal at a subsidised 6% rate of interest. ���This scheme will be continued in 2008-09 with special cut on rate of interest for farmers who have paid their debt as per schedule,��� Mr Patil added.