The Union Cabinet today gave its approval to continue interest subsidy to Public Sector Banks (PSBs), Regional Rural Banks (RRBs), Cooperatives Banks and NABARD to enable them to provide short-term crop loans up to Rs 3 lakh to farmers at 7% p.a. during the year 2012-13. It also decided to provide additional interest subsidy of 3% p.a. to those farmers who repay loans within one year of disbursement in the current fiscal year.

The Cabinet allowed the release of 10,901 crore Rupees as interest subvention for 2012-13 . Interest subsidy has also been allowed for small and marginal farmers having Kisan Credit Cards for loan against negotiableखरीद फरोख्त के लायक warehouse receipts for post harvest at 7% p.a. The Cabinet approved the release of 442 crore rupees as interest subsidy to small and marginal farmers having Kisan Credit Cards against negotiable warehouse receipts, for post-harvest.

AIR correspondent reports, centre has been subsidizing short-term crop loans to farmers since 2006-07 to ensure the availability of crop loans to farmers upto Rs.3 lakh at 7% p.a. Banks have been consistently meeting the target set for agriculture credit flow in the past years. For the year 2012-13, the target for agricultural credit flow has been raised to 5,75,000 crore Rs from 4,75,000 crore Rs in the year 2011-12.

n Madhya Pradesh, now farmers will get farm loans at zero per cent interest rate. Chief Minister Shivraj Singh Chouhan made an announcement to this effect in Bhopal today. He said that the facility of zero per cent interest rate on farm loans would be applicable from 1st April this year.

At present, the State Government is providing farm loans at one per cent interest rate. Mr. Chouhan said the state BJP awareness programme on the issues related to farmers would continue and a Kisan Mahapanchayat would be organised on the July 15 in Bhopal .

Mr. Chouhan said that a resolution demanding cut in prices of fertilisers would also be bring during the Monsoon Session of state Legislative Assembly