Chief Minister Uddhav Thackeray wrote to Union Agriculture Minister Narendra Singh Tomar on Monday demanding continuation of the 2% interest subsidy scheme for short-term agricultural loans in Maharashtra. Thackeray said the termination of the interest subsidy scheme is likely to impact 70 lakh farmers in the state.
Thackeray referred to recent circulars from the Ministry of Agriculture and Farmers’ Welfare and NABARD by which the scheme was amended, indicating that its benefits would not be available from the 2022-23 financial year.
“This will have a negative impact on the financial position of cooperative banks and, in turn, this will have a serious negative impact on the distribution of short-term crop loans to farmers in the state,” Thackeray said in the letter. The issue was discussed at the state bankers committee meeting on Monday and the decision to ask the Union government to reinstate the scheme was taken.
He further said that the interest subsidy scheme was particularly helpful to cooperative banks, which have a broader connection with farmers.
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“Currently, the State Cooperative Banks / Central District Cooperative Banks (DCCBs) offer interest rates on deposits ranging from 3 to 7.75% pa These banks are also required to maintain reserves statutory eg CRR, SLR and other financial parameters as per RBI guidelines. Considering these factors, state DCCBs find it difficult to lend to farmers at 7% interest without central government interest subsidy,” he added.
Thackeray further stated that considering all the above factors, there is a need to immediately review the decision to withdraw the interest subsidy. “I sincerely urge the Government of India to protect the interests of farmers, the interest subsidy scheme which was available till 2021-22 can be continued,” he added.