In a big relief to farmers, MP government to offer loans at -10% interest rate

The Madhya Pradesh Government has decided to give crop loans bearing an interest rate of -10% from crop year 2015-16.

While addressing National Conference on Crop Insurance in Bhopal, Madhya Pradesh Chief Minister Shivraj Singh Chouhan said the government was already doling out loans at zero percent rate of interest.

"We have been giving crop loans at zero percent rate of interest. Now we want to give it at -10 percent interest rate because there is no alternative to farming. We cannot grow our wheat, rice or chana in the factories," said Chouhan.
About 40% of the farmers who receive crop loan are going to be eligible for this beneficial scheme.

However, MP withdrew the bonus it used to give to farmers for paddy, wheat and maize over and above the Minimum Support Price (MSP) as there is over production of these crops in the state.

Of about Rs 12,000 crore worth of crop loans distributed in MP, about 40% is distributed through the co-operative banking system.

"We will give 10% subsidy to the co-operatives, when they collect 90% of the loan amount given to the farmers. This will also incentivise the co-operatives for better recovery of the loans distributed," Rajesh Rajora, principal secretary, Madhya Pradesh, told Economic Times.

(Image: Indiatimes)