CM seeks PM’s intervention for interest incentive of 3% in crop loan conversion

Bhubaneswar, November 13, 2017: Maintaining that his
Government has already initiated  
proactive measures to provide relief to the farming community suffering
from the crop loss promptly, Chief Minister Naveen Patnaik on Monday sought
Prime Minister Narendra Modi’s intervention to keep interest rate on Medium
Term (Conversion) loans at par with the crop loans.
The CM also requested the PM to extend interest incentive of
three percent also extend the interest incentives of three percent admissible
on crop loans to the Medium Term (Conversion) loans.
“As a part of the package announced for the farming
community, it has been decided to convert the crop loans advanced during
Kharif, 2017 season in the affected areas as Medium Term (Conversion) loans. In
case of crop damage between 33% and 5000, the crop loans can be converted into
Medium Term (Conversion) loans repayable within a period of two years with a
moratorium of one year,” the Chief Minister said in a letter to the PM.
“Similarly, where the crop damage is 50% and more, the
conversion facility of the crop loans can be allowed for a maximum period of
five years with one year moratorium. The Union Government provides interest
incentive at 3 percent to the prompt paying farmers in respect of crop loans,
which is not made available in case of conversion of such crop loans in the
event of occurrence of natural calamities,” said Patnaik.
As a result, the interest rate on the converted loans remains
at a higher rate, which is at present 11.20%. 
Similarly, the interest on crop loans is not subsidized as
interest subvention for the same is not available.  “In my opinion, when crop loans are converted
into Medium Term loans, the interest rate should remain at par with the crop     loans. Similarly, the incentive made
available to the prompt paying farmers for crop loans should also be extended
to the Medium Term (Conversion) loans to provide relief to the farmers affected
due to drought and pest attack,” said the CM.
“Therefore, I request your intervention  in the matter 
to  keep the interest rate  on the 
Medium Term (Conversion)  loans
at  par with  the crop 
loans and  also extend  the 
interest incentive of three percent 
admissible  on  crop 
loans to  the  Medium Term (Conversion) loans, added the CM.

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