The Odisha Cabinet on Friday approved provision of Rs. 5700 crore for implementation of a State sector scheme ‘Interest Subsidy-Subvention’ under which interest-free crop loans of up to Rs. 1 lakh would be made available to farmers.
The Cabinet meet chaired by Chief Minister Naveen Patnaik decided to charge 2% interest for crop loans above Rs.1 lakh to Rs.3 lakh. These interest rates would be applicable retrospectively from April 1, 2022.
Loan amount raised
Earlier, interest free crop loans were provided up to a limit of Rs.50000 under KALIA (Krushak Assistance for Livelihood and Income Augmentation), the State’s flagship programme for farmers.
During the year 2022-23, about 32.43 lakh small and marginal farmers availed crop loan from cooperative banks and Primary Agricultural Cooperative Societies (PACS) within Rs.1 lakh at 0% interest rate per annum.
“In order to compensate losses sustained by cooperative banks and PACS involved in issuing crop loans stipulated by the government, the State is providing interest subsidy or subvention to the cooperative banks and PACS. Cabinet’s approval of Rs. 5700 crore is a step towards this,” said a senior government official.
The interest subsidy-subvention to the cooperative banks or PACS will be in force for five years from 2023-24 to 2027-28 so that adequate credit flow can be ensured at an affordable rates to farmers.
The Cabinet note says Odisha is an Agrarian State and growth in production and productivity in agriculture can be achieved only through flow of funds for investment in agricultural operations.
Marginal farmers
“Most of the farmers in the State belong to the small and marginal category with small and marginal land holdings. These farmers do not have the required capital resources for their agricultural operations for which they require to avail hassle free crop loans from financial institutions,” the note emphasizes.
The cooperative banks have achieved significant success in crop loan dispensation from Rs.438.36 crore to 6.40 lakh farmers in the year 2000-01 to Rs. 16683.57 crore to 34.57 lakh farmers in the year 2022-23. At present the Cooperatives provide about 55% of the total crop loans dispensed in the State as against the national average of 17%.
In an attempt to organise forest dwellers, the State Cabinet also approved construction of buildings for the Vana Surakshya Samitis (VSS) which is expected to provide them a common facility centre for various activities.
“The VSS play a pivotal role in conservation and protection of the forest. Therefore, government has decided to construct around 10,000 buildings across the State for the VSS, to be taken up in a phased manner within a period of four years from 2023-24 to 2026-27,” according to a statement issued by the State government.
There is a budget allocation of Rs.250 crore for the financial year 2023-24 for construction of VSS buildings. With this budgeted allocation, 2941 VSS buildings are targeted for completion during this financial year - 2023-24.
