Budget 2024: Government increases agricultural loan target for farmers to Rs 22-25 lakh crore

The central government is set to announce an increase in the agriculture credit target for the upcoming financial year from Rs 22 to Rs 25 lakh crore in the imminent interim budget. Sources said the move is expected to ensure that eligible farmers continue to have access to institutional credit, which will surpass the farm credit target of Rs 20 lakh crore for the current financial year.

Currently, the government provides 2% interest subsidy on short-term agricultural loans up to Rs 3 lakh for all financial institutions. This allows farmers to avail agricultural loans up to Rs 3 lakh at a concessional interest rate of 7% per annum. Additionally, farmers are offered an additional interest subvention of 3% per annum on timely repayment of the loan. While farmers can also avail long term loans, the interest rates are in line with the prevailing market rates. Sources say that the agricultural loan target for the financial year 2024-25 can be increased to Rs 22-25 lakh crore.

The government’s focus on agricultural credit is evident through various campaigns aimed at identifying eligible farmers and integrating them into the credit network. The Agriculture Ministry has set up a dedicated division for credit as part of its comprehensive approach.

Sources claim that in the last decade, agricultural loan distribution has continuously exceeded the set target. Government data shows that by December 2023, about 82% of the Rs 20 lakh crore agri-credit target for the current financial year has been achieved, with both private and public banks disbursing about Rs 16.37 lakh crore during this period. have been distributed. It is estimated that once again in this financial year, agricultural loan distribution will exceed the set target.

Total agricultural credit disbursement in the financial year 2022-23 reached Rs 21.55 lakh crore, which is Rs 3.05 lakh crore more than the set target of Rs 18.50 lakh crore. Notably, the data also revealed that 7.34 crore farmers took loans through Kisan Credit Card (KCC).

This proactive approach of the Government underlines its commitment to support farmers and promote growth in the agriculture sector.