Vasundhara Raje writes to PM to raise re-finance loan rate to 50 per cent

JAIPUR: In view of crop damage due to unseasonal rain in the state in the months of February and March this year, Rajasthan government has written to the prime minister for increasing the rate on refinance loan provided to farmers by NABARD from 40 to 50 per cent.

In a letter written early this week, Chief Minister Vasundhara Raje said the rate of short term loan provided by NABARD to farmers through district Central Cooperative Banks was reduced from 50 to 40 per cent which was not justified in view of crop damage reported in the state in February-March this year.

Earlier, NABARD has approved the refinance of short-term loans to farmers through CCB at 50 per cent in financial year 2014-15 but it was slashed recently, a press release, quoting Raje, said last night.

NABARD has given Rs 8,000 crore to Rajasthan's Central Cooperative banks for refinance, she said, adding, in this process, the state co-operative banks issued short-terms loans to 30 lakh farmers with a sum of Rs 16,000 crore.

With the reduction in rate, the burden of finance would lie on state's central cooperative banks causing them financial crunch and their ability to loan further would be affected, she said.

The chief minister further demanded that this rate of re-finance be increased to 60 per cent in current fiscal year 2015-2016 so that farmers could face any eventuality of weather disturbance.