Cabinet Okays Interest Subvention Of 1.5 Per Cent On Short-Term Agri Loan Up To Rs 3 Lakh
Union Cabinet has also increased ECLGS corpus by Rs 50,000 crore to Rs 5 lakh crore, said Information and Broadcasting Minister Anurag Singh Thakur
The Union Cabinet on Wednesday okayed 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 meeting, 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, Thakur said, the PTI reported.
According to the report, 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 FY22-23 to FY24-25 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 increase in interest subvention will ensure sustainability of credit flow in the agriculture sector as well as financial health and viability of the lending institutions.
On the other hand, the Cabinet has also approved raising the outlay of the Emergency Credit Line Guarantee Scheme (ECGLS) by Rs 50,000 crore to Rs 5 lakh crore and the additional amount will be earmarked for enterprises in the hospitality and related sectors.
The report mentioned that in the 2022-23 Union Budget, there was a proposal for raising the limit of ECLGS from Rs 4.5 lakh to Rs 5 lakh crore to help hospitality sector hit by the coronavirus pandemic.
Information and Broadcasting Minister Anurag Singh Thakur, while briefing the media on various decision taken by the Cabinet, said the hike in the amount has been made on account of the severe disruptions caused by the pandemic in the hospitality and related sectors.
He said that loans worth around Rs 3.67 lakh crore have been sanctioned under ECLGS till August 5, 2022.
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