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Cabinet approves interest subvention of 1.5% on short-term farm loans

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New Delhi, Aug 17: The Union Cabinet on Wednesday approved interest subvention of 1.5 per cent on short-term agriculture loans of up to Rs 3 lakh for all financial institutions, a move aimed at ensuring adequate credit flow in the farm sector.

Thus, Interest Subvention of 1.5% will be provided to lending institutions (Public Sector Banks, Private Sector Bank, Small Finance Banks, Regional Rural Banks, Cooperative Banks and Computerised PACS directly ceded with commercial banks) for the financial year 2022-23 to 2024-25 for lending short term agri-loans upto Rs 3 lakh to the farmers.

Cabinet approves interest subvention of 1.5% on short-term farm loans

This increase in Interest Subvention support requires additional budgetary provisions of Rs 34,856 crore for the period of 2022-23 to 2024-25 under the scheme.

Cong promises farm loan waiver, free electricity to farmers if voted to power in GujaratCong promises farm loan waiver, free electricity to farmers if voted to power in Gujarat

Benefits:

  • An increase in Interest Subvention will ensure the sustainability of credit flow in the agriculture sector as well as ensure the financial health and viability of the lending institutions especially Regional Rural Banks & Cooperative Banks, ensuring adequate agriculture credit in rural economy.
  • Banks will be able to absorb the increase in the cost of funds and will be encouraged to grant loans to farmers for short-term agriculture requirements and enable more farmers to get the benefit of agriculture credit.
  • This will also lead to the generation of employment since short-term agri-loans are provided for all activities including Animal Husbandry, Dairying, Poultry, and fisheries.
  • Farmers will continue to avail short-term agriculture credit at an interest rate of 4% per annum while repaying the loan in time.

Cabinet approves expansion of Emergency Credit Line Guarantee Scheme by Rs 50,000 crore to Rs 5 lakh crore

The Cabinet has also approved the enhancement in the limit of Emergency Credit Line Guarantee Scheme (ECLGS) by Rs 50,000 crore from Rs. 4.5 Lakh crore to Rs. 5 Lakh crore, with the additional amount being earmarked exclusively for enterprises in hospitality and related sectors. The increase has been done on account of the severe disruptions caused by COVID-19 pandemic on hospitality and related enterprises.

Implementation schedule:

ECLGS is a continuing scheme. The additional amount of Rs. 50,000 crore would be made applicable to enterprises in hospitality and related sectors till validity of the scheme which is 31.3.2023.

Impact:

ECLGS is an already operational scheme and on account of the disruptions caused by the COVID 19 pandemic on hospitality and related sectors, Government has specifically earmarked an amount of Rs. 50,000 crore for enterprises in these sectors.

The enhancement is expected to provide much needed relief to enterprises in these sectors by incentivizing lending institutions to provide additional credit of up to Rs. 50,000 crore at low cost, thereby enabling these business enterprises to meet their operational liabilities and continue their businesses.

Loans of about Rs. 3.67 Lakh crore have been sanctioned under ECLGS till 5.8.2022.

Cabinet approves widening access of the Traditional Knowledge Digital Library (TKDL) database to users, besides patent offices

The Cabinet chaired by the Prime Minister Narendra Modi has approved the "Widening access of the Traditional Knowledge Digital Library (TKDL) database to users, besides patent offices". The opening up of the TKDL database to users is an ambitious and forward-looking action by the Government of India.

This will be a new dawn for Indian traditional knowledge, as the TKDL will drive research & development, and innovation based on India's valued heritage across diverse fields. The opening up of the TKDL is also envisaged to inculcate thought and knowledge leadership through Bharatiya Gnana Parampara, under the New Education Policy 2020.

Cabinet approves signing of Contract between India and France to support ITF activities

The Union Cabinet was apprised of the signing of Contract between the Organisation for Economic Cooperation and Development, France on behalf of the International Transport Forum and the Technology Information, Forecasting and Assessment Council (TIFAC), India to support the International Transport Forum (ITF) activities on the Indian Transport Sector.

The Contract was signed on 6th July, 2022.

The activities to be carried out under this Contract will lead to:

  • New scientific results;
  • New policy insights;
  • Capacity building through increase scientific interaction
  • Identification of technology options for decarbonization of transport sector in India.

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