Short-term crop loans come tad late

With the agrarian crisis threatening to spread to other parts of India after getting ignited in Madhya Pradesh, the Centre on Wednesday approved the disbursal of short-term crop loans to farmers for the current season. Under it, farmers will get loans up to `3 lakh at seven per cent interest for six months, as in previous seasons ever since the scheme started in 2006-07.

Those who repay on time will get a three per cent rebate; that is, they will be charged only four per cent interest. To provide relief to farmers hit by natural calamities, the government has decided to give two per cent interest subsidy for the first year on the restructured amount.

This is being seen as a bid to counter the unrest, though it will bring only partial relief as farmers are demanding loan waivers and an adequate MSP for their produce.

The Union Cabinet, which met on Wednesday morning, approved extending the scheme for the current season with funds worth `20,339 crore for interest subvention.

Finance minister Arun Jaitley had announced in his Budget speech on February 1 that adequate credit would be available to farmers and a target of `10 lakh crore has been fixed for agricultural credit in 2017-18. However, according to sources, the decision to give the loan should have been implemented in April when the season had just begun.