Cabinet approves 1.5% interest subsidy on agricultural loans

In order to support the sectors affected by the Covid-19 pandemic, the meeting chaired by Prime Minister Narendra Modi also approved a strengthening of the Emergency Credit Line Guarantee Scheme (ECLGS) by 50000 crore to 5 trillion. The increased amount is intended exclusively for the hotel and related sectors. Till August 5, loans of around Rs. 3.67 trillion have been sanctioned under the ECLGS, which is valid until March 31, 2023. Corpus enhancement aims to provide ‘much needed relief’ companies of these contact-intensive services by encouraging credit institutions to provide additional credit up to 50,000 crores at low cost, thus enabling these business enterprises to meet their operational obligations and continue their activities.

The 1.5% interest subsidy program for the agricultural sector aimed to ensure adequate agricultural credit in the rural economy as well as the financial health and viability of credit institutions, in particular regional rural banks and banks cooperatives. The measure will lead to an additional budgetary provision of 34,856 crores for the period of FY23 to FY25 under the program.

“Keeping in mind the changing economic scenario, especially the increase in interest rates and lending rates for financial institutions, especially cooperative banks and regional rural banks, the government has reviewed the interest subsidy rate given to these financial institutions.This is expected to ensure adequate credit flow into the agricultural sector for the farmer and ensure the financial health of the credit institutions…To meet this challenge, the Government of India has proactively decided to reinstate interest subsidy on short-term agricultural loans at 1.5% for all financial institutions,” the government said in a statement on Wednesday.

Through this, banks will be able to absorb an increase in the cost of funds and will be encouraged to lend to farmers for short-term agricultural needs and enable more farmers to benefit from agricultural credit. It will also lead to job creation as short-term agricultural loans are provided for all activities including animal husbandry, dairy farming, poultry, fisheries, the government said. Farmers will continue to benefit from short-term agricultural credit at an interest rate of 4% per annum while repaying the loan on time.

In order to ensure that farmers pay a minimum rate of interest to the bank, the Government of India introduced the Interest Subsidy Scheme (ISS), now renamed as Modified Interest Subsidy Scheme (MISS), to provide short-term credit to farmers at subsidized interest rates.

Under this scheme, short term agricultural loan up to Rs. 3 lakh is available for farmers engaged in agriculture and other related activities including animal husbandry, dairy, poultry , fishing, etc. at the rate of 7% per annum and an additional 3% subsidy is also granted to farmers for prompt and timely repayment of loans. Therefore, if a farmer repays his loan on time, he gets credit at the rate of 4% per year. This aid, given through financial institutions, is 100% funded by the Center and is also the second largest program of the Department of Agriculture and Agriculture. the well-being of farmers based on budget expenditure and beneficiary coverage.

As part of the Aatmanirbhar Bharat campaign, more than 31.3 million farmers received a new Kisan Credit Card (KCC) against the target of 25 million. “Special initiatives such as the KCC Saturation Drive for farmers registered under the PM-KISAN program have also simplified the process and documentation needed to obtain KCC sanction,” the government said.

The increase in the ECLGS limit of 50,000 crores, intended for entities in the hospitality and related sectors, was realized due to the severe disruptions caused by the COVID-19 pandemic in these sectors.

“The ongoing pandemic has had a more severe negative impact on contact-intensive sectors, particularly hospitality and related sectors,” the government noted in a statement. He said that while other sectors had returned to the recovery path more quickly, demand continued to be subdued for these sectors for a longer period, suggesting the need for appropriate interventions to maintain and recover them. recovery.

Moreover, given their high employment intensity and their direct and indirect links with other sectors, their revival is also necessary to support the overall economic recovery.

Finance Minister Nirmala Sitharaman had announced in the Union Budget 2022-23 the extension of the validity of the ECLGS until March 2023.

With high vaccination levels, a gradual dismantling of restrictions and an overall economic recovery, the conditions are in place for sustained demand growth in these sectors as well. This additional warranty coverage should also support the recovery of these sectors, according to the press release.

The ECLGS program was announced as part of the Atmanirbhar Bharat package in 2020 to help companies meet their operational responsibilities and resume operations after the pandemic. Banks are 100% insured against any loss incurred by them due to non-repayment by borrowers.

Expanded Access to the Traditional Knowledge Digital Library

The Cabinet also approved a proposal to expand access to the Traditional Knowledge Digital Library (TKDL) database to users, in addition to patent offices. The move aims to boost research and development and innovation based on India’s traditional knowledge.

The TKDL currently contains information from existing literature related to ISM, such as Ayurveda, Unani, Siddha, Sowa Rigpa and Yoga. The information is documented in a digitized format in five international languages ​​which are English, German, French, Japanese and Spanish.

“The Cabinet approval to expand access to the database beyond patent offices emphasizes the integration and co-optation of traditional knowledge with current practices to enhance innovation and development. trade,” the government said in a press release.

TKDL provides information in languages ​​and in a format that patent examiners at patent offices around the world understand, to help prevent erroneous patent issuance. So far, access to the full TKDL database is limited to 14 patent offices worldwide for search and examination purposes. This defensive protection through the TKDL has been effective in protecting Indian TK from misappropriation and is considered a global benchmark.

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