post news network
Bhubaneswar, Sept 15: The state government is set to impose 12 per cent rate of interest on farm loans availed by those farmers who did not sell paddy so produced to the government.
Food supplies and consumer welfare minister S N Patro conveyed the decision following a review meeting held here Friday. “About 19 lakh farmers availed crop loan from Large Area Multipurpose Cooperative Societies (LAMPCS) and cooperative societies in 2016-17; of these only about 9 lakh farmers have sold their paddy to the government. It indicates that the remaining 10 lakh farmers may have misused the loan, which entails only nominal rates of interest.”
Patro said if farmers have not used the money for agriculture, and used it instead on other commercial activities, the government “will impose interest rate of 12 per cent treating the amount as a commercial loan”. The move, though, won’t affect farmers who have produced about three quintals of paddy, the minister said.
The government provides loans at concessional rate of interest of 4 per cent to farmers availing agricultural loans of up to Rs50,000 and 5 per cent for loans from Rs50,001 to Rs3 lakh. If the loanee farmers are prompt with repayment, the government provides a tax incentive of 3 per cent, which effectively brings the rate of interest they pay down to 1 per cent on loans up to Rs50,000 and 2 per cent on loans from Rs50,001 to Rs3 lakh.