NEW DELHI: The government has increased the agricultural credit target to Rs 18 lakh crore for the 2022-23 fiscal from Rs 16.50 lakh crore for the current fiscal, a senior Finance Ministry official said on Tuesday.
The official was briefing reporters about the Budget proposals in the presence of Finance Minister Nirmala Sitharaman here.
"For next year, our target is Rs 18 lakh crore for the agricultural credit. This year, the target was Rs 16.50 lakh crore out of which 75 per cent has been disbursed," said Rajesh Verma who has been given additional charge as Secretary Department of Financial Services ahead of the Budget presentation.
About Rs 7.36 lakh crore agri-credit has been disbursed to farmers during the first six months of the 2021-22 fiscal year against the target of Rs 16.50 lakh crore, according to the Economic Survey.
During the 2016-17 fiscal, the farm credit disbursed stood at Rs 10.65 lakh crore, Verma added.
Normally, farm loans attract an interest rate of 9 per cent.
However, the government has been providing interest subvention to make available short-term crop loan at an affordable rate and help boost farm output.
The government is providing a 2 per cent interest subsidy to ensure farmers get short-term farm loans of up to Rs 3 lakh at an effective rate of 7 per cent per annum.
To enhance coverage of small and marginal farmers in the formal credit system, the RBI has decided to raise the limit for collateral-free agriculture loans from Rs 1 lakh to Rs 1.6 lakh.
The interest subvention is given to public sector banks (PSBs), private lenders, cooperative banks and regional rural banks (RRBs) on the use of their funds and to Nabard for refinancing RRBs and cooperative banks.