Government May Increase Agri-Credit Target to Rs 22-25 Trillion in Interim Budget
In the upcoming interim budget, the government is expected to announce a significant increase in the agricultural credit target for the next fiscal, aiming for Rs 22-25 lakh crore. The goal is to ensure that every eligible farmer has access to institutional credit, with the current fiscal year's agri-credit target set at Rs 20 lakh crore. Presently, the government offers a two percent interest subvention on short-term agricultural loans up to Rs 3 lakh, resulting in farmers receiving loans at a concessional rate of 7 percent per annum.
An additional 3 percent per annum interest subvention is granted to farmers who repay their loans on time. While farmers can also access long-term loans, the interest rate is determined by the market rate. There are indications of a significant increase in the agricultural credit target for the 2024-25 fiscal year, ranging from Rs 22-25 lakh crore, with a strong focus on campaigns to identify and include eligible farmers who may have been left out.
The agriculture ministry has established a dedicated division for 'credit' to adopt a more focused approach. The credit disbursal for various agricultural activities has consistently surpassed targets over the past decade. As of December 2023, about 82 percent of the Rs 20 lakh crore agri-credit target for the current fiscal has already been achieved, with Rs 16.37 lakh crore disbursed by both private and public banks. The sources suggest that agri-credit disbursal is likely to exceed the target for the ongoing fiscal year.