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The government on February 1 announced an 11% hike in farm credit target to Rs 20 lakh crore for the next financial year, with a focus on animal husbandry, dairy and fisheries.
The agriculture credit target for the current financial year 2022-23 is ₹18 lakh crore.
In other big ticket announcements, Finance Minister Nirmala Sitharaman included budget speech Said that the government will launch “Atmanirbhar Clean Plant Programme” to promote availability of disease-free, quality planting material for high-value horticulture crops at an outlay of Rs 2,200 crore.
He said that a new sub-scheme of Pradhan Mantri Matsya Sampada Yojana has been launched with a targeted investment of Rs 6,000 crore to enable activities of fishermen, fish vendors and micro and small enterprises, improve value chain efficiencies and expand the market. Will. ,
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“The agriculture credit target will be increased to Rs 20 lakh crore with focus on animal husbandry, dairy and fisheries,” the finance minister said.
The government is increasing the credit target for the agriculture sector every year.
Generally, agriculture loans attract an interest rate of 9%. However, the government is providing interest subvention to make short-term crop loans available at affordable rates and help boost agricultural production.
Government is providing 2% interest subsidy to farmers to ensure short term agriculture loans up to ₹3 lakh at an effective rate of 7% per annum.
In order to increase the coverage of small and marginal farmers in the formal credit system, RBI has decided to increase the limit of collateral-free agriculture loan from ₹1 lakh to ₹1.6 lakh.
Interest subvention is given to public sector banks, private lenders, cooperative banks and regional rural banks on utilization of their funds and to NABARD for refinance to Regional Rural Banks (RRBs) and cooperative banks.