Cabinet okays 3% interest subvention extension for crop loans

New Delhi: The Cabinet on Tuesday approved a proposal to extend a three per cent interest subvention scheme to banks to ensure farmers get crop loans up to Rs 3 lakh at seven per cent a year interest. An additional subvention of three per cent would be given to those who pay loans on time.

The Cabinet approved an expenditure of Rs 18,110 crore for FY16 to enable banks to provide three per cent interest subvention on short-term crop loans to those who make timely repayment. Of the total amount sanctioned, Rs 2,332 crore would be provided to Nabard and the remaining to commercial banks. The subvention will be applicable to those farmers who repay their amounts within one year of disbursal and it will be restricted to Rs 3 lakh of short-term crop loans. The subvention would also be applicable for post-harvest loans taken by small and marginal farmers against their negotiable warehouse receipts.

The Cabinet also approved Rs 374 crore for farmers with Kisan Credit Cards. The subvention would continue to be provided to farmers affected by natural calamities. The scheme was announced in the 2015-16 Union Budget. For 2015-16, the target of agriculture credit has been raised to Rs 8,50,000 crore, from Rs 8,00,000 in 2014-15.

MSIPS extended

Among other decisions, the Cabinet extended the Modified Special Incentive Package Scheme (MSIPS) by five years and also expanded the scope of the programme to cover 15 new product categories. The decision was taken to promote Make In India and Digital India initiatives. The demand for electronics in India is expected to reach $400 billion by 2020. The electronics sector has the potential to attract $100 billion investment and provide jobs to 28 million people. The 15 new product categories in the MSIPS include smart cards, consumer appliances (washing machines, refrigerators, air conditioners etc), electronic product design, optical fibre and Internet of Things products, among others. The scheme was originally approved by the government in July 2012.

It provides capital subsidy of 20 per cent in special economic zones (SEZ) or 25 per cent in non-SEZ units engaged in manufacturing of electronics items. The original scheme was for three years.

Bulk exports of rice bran oil

The Cabinet Committee on Economic Affairs (CCEA) allowed bulk exports of rice bran oil and removed quantitative restrictions on out-bound shipments of organic edible oils. Although India is a major importer of edible oils, the Centre has allowed bulk exports of rice bran oil to help small rice millers realise better price as demand of this cooking oil remains limited in the domestic market. India imports 10 million tonnes of vegetable oil - largely edible - annually, which is 60 per cent of the country's total demand. Edible oil exports have been prohibited since March 17, 2008. Certain exemptions have been allowed from time to time.

Central agriculture university

Ahead of the Bihar elections, the Cabinet gave its nod for the creation of a central agriculture university at Samastipur with an outlay of Rs 295 crore. The Cabinet gave an 'in-principle' approval for reviving the Banana Research Centre at Goraul in Vaishali.

The decision was taken days before Prime Minister Narendra Modi's visit to the state to launch four new schemes at the 87th foundation day of Indian Council of Agricultural Research to be held at Patna on July 25

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