AreaIndia

Commodity GroupGrains

CommodityAll

Date09/07/2019

Policy CategoryProduction

Policy InstrumentGovernment support

DescriptionIntroduced an interest subvention scheme applicable for short-term crop loans of up to INR 300 000 (USD 4 184). The normal interest rate available to farmers is 7 percent per annum. Under the scheme, the Government will subsidize interest at the level of 2 percent per annum on the restructured loan amount, to mitigate the effects of natural disasters (up to a maximum of 5 years). An additional 3 percent will be offered to incentivize prompt repayment by farmers, thereby reducing the effective interest rate to 4 percent.