Budget 2019: Farmers loans relief - Kisan Credit Scheme to give 2%, 5% extra benefit; who can avail this scheme

Budget 2019: To help farmers get timely credit for cultivation and other needs, interim finance minister Piyush Goyal has announced a host of benefits under Kisan Credit Scheme. This scheme has been in development by the government to meet short term credit requirements for cultivation of crops. Not only this, the scheme also helps in meeting harvest expenses and working capital requirement to meet activities like pump sets, sprayers, dairy animals, floriculture, horticulture etc

Firstly, government has simplified application form to get all farmers under this Kisan Credit scheme. Going ahead, a farmer will be able to achieve interest subvention benefit of 2% for their loans after any sort of disasters. Additionally, a 5% interest subvention will be given to those farmers who repay their loan on time to lenders. 

There is already a 2% interest subvention given on loan amount up to Rs 3 lakh to farmers. Additionally 3% interest on prompt repayment. 

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Who can avail this Kisan Credit Scheme?

All farmers – individuals/Joint cultivator owners Tenant farmers, oral lessees and share croppers etc. SHGs or Joint liability groups including tenant farmers.

Quantum of loan for 1st year will be assessed on the basis of Cost of cultivation, post-harvest expenses and farm maintenance cost. For subsequent 5 year loan will be sanction on the basis of increase in scale of finance.

Generally, an interest rate of 7% per annum is charged  for one year or up to the repayment due date, whichever is earlier. In case of non-repayment within the due dates interest is applied at card rate. Beyond due date interest will be compounded half yearly.

The repayment period fixed by a bank depends on the anticipated harvesting and marketing period for the crops for which a loan has been granted.