Loans at 3 pc interest rate from next Khariff: CM

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Hyderabad, Dec 7 (UNI) After the Women Self-Help Groups (SHGs), farmers in Andhra Pradesh will get bank loans at a much reduced interest rate of three per cent from next Khariff season.

Announcing this at the state-level Bankers Committee meeting here today, Chief Minister Y S Rajasekhara Reddy asked the bankers to sit and work out the details with the state government officials.

Dismissing the view that ''there can be no free lunches,'' he maintained that the farmers, who achieved a record one crore tonne food production this Khariff season, ''deserve advancement of loans at a mere three per cent.'' However, only those farmers, who repaid the loans would be eligible for the ''Pavala Vaddi'' scheme, he clarified, adding, ''we need to inculcate financial discipline among them.'' Spurred by the agricultural sector's growth, the state had surpassed the national GDP half-yearly growth of 9.13 per cent by 0.57 per cent during this year, Dr Reddy said.

Commending the banks for providing Rs 4,682 crore bank linkage to 80 lakh women of the SHGs in the first half of this year, he asked the banks to meet the target of Rs 7,000 crore bank linkage this year and step up bank linkages to Rs 14,000 crore next year.

Describing as ''phenomenal'' 134 per cent growth in agricultural advances to Rs 37,755 crore in the last three and a half years, he noted with satisfaction that lending to the total priority sector to the tune of Rs 88,181 crore in the state constituted 64 per cent as against the RBI norm of 40 per cent.

''It is heartening to note that the credit deposit ratio for the state had reached 90.5 per cent at the end of September 2007 from 87 per cent in March 2007 and 71.2 per cent in March 2004,'' he said.

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