Cabinet nod to two-month waiver for farm loans

New Delhi: The Cabinet on Tuesday approved a two-month interest waiver on short-term crop loans taken from cooperative banks.

The decision was announced by Prime Minister Narendra Modi on New Year’s Eve as a relief measure to aid winter planting after demonetisation of high value banknotes in November led to a cash crunch in rural areas.

The waiver will cost the government an additional Rs1,060 crore in addition to the Rs15,000 crore spent on providing interest subsidy to farmers during 2016-17, according to an official statement.

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In another decision, the Cabinet approved a scheme that will provide interest subsidy to rural households that are not covered under the Pradhan Mantri Aawas Yojana (Grameen). The scheme aims to enable people in rural areas construct new houses or add to their existing pucca houses. The beneficiaries of this scheme will be provided interest subsidy for a loan amount of up to Rs2 lakh.

The government will provide net present value of the interest subsidy of 3% to the National Housing Bank. The bank, which will implement the scheme, will then pass it to primary lending institutions such as scheduled commercial banks and non-banking financial companies. The scheme will not just improve housing stock in rural areas but also create employment opportunities in the rural housing sector, the Cabinet said.

The cabinet also approved swapping of 11.35 acres of Airport Authority of India land with equivalent land owned by the Bihar government for expansion of the Patna airport.

The proposed land at the Patna Airport will be used for expansion of the airport and construction of new terminal building along with other associated infrastructures.

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In another decision, the cabinet approved ratification of the second commitment period of the Kyoto Protocol on containing the emission of greenhouse gases. The second commitment period of the Kyoto Protocol was adopted in 2012. So far, 65 countries have ratified the second commitment period.

As a part of the government’s commitment to financial inclusion and social security, the cabinet has given its post-facto approval for launching of Varishtha Pension Bima Yojana 2017. The scheme, which will provide social security during old age and protect elderly persons aged 60 years and above against a future fall in their interest income due to uncertain market conditions, will be implemented through Life Insurance Corp. of India this year.

Ashwaq Masoodi contributed to the story

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.