Odisha’s ‘Interest Subsidy-Subvention’ Scheme

July 22, 2023

The Odisha Cabinet recently made a significant decision to bolster the agricultural sector by approving a provision of Rs. 5700 crore for the implementation of the ‘Interest Subsidy-Subvention’ scheme. This scheme aims to provide much-needed financial support to farmers, ensuring easy access to crop loans and promoting their well-being.

Interest Subsidy-Subvention: Empowering Farmers

The ‘Interest Subsidy-Subvention’ scheme is a groundbreaking initiative taken by the Odisha government to support farmers by providing them with access to affordable and interest-free crop loans. Under this scheme, farmers will be able to avail of interest-free crop loans of up to Rs. 1 lakh.

Incentive for Cooperative Banks

In a bid to compensate cooperative banks and Primary Agricultural Cooperative Societies (PACS) for issuing crop loans stipulated by the government, the Odisha Cabinet decided to provide interest subsidy or subvention to these financial institutions. This move is aimed at encouraging cooperative banks to actively participate in disbursing crop loans to farmers.

Incremental Interest for Higher Loan Amounts

For crop loans exceeding Rs. 1 lakh and up to Rs. 3 lakh, a nominal interest rate of 2% will be charged. This decision aims to strike a balance between incentivizing small and marginal farmers while also encouraging larger investments in agriculture.

A Boon for Small and Marginal Farmers

The Odisha government recognizes that the majority of farmers in the state belong to the small and marginal category, with limited financial resources for agricultural operations. By providing hassle-free crop loans, the government seeks to empower these farmers and enable them to invest in their agricultural activities.

Boosting Agricultural Production and Productivity

Odisha’s economy is predominantly agrarian, and growth in agricultural production and productivity is vital for overall economic development. Through the ‘Interest Subsidy-Subvention’ scheme, the government aims to enhance the flow of funds for agricultural operations, enabling farmers to adopt modern farming techniques and achieve higher yields.

Transformative Impact on Forest Dwellers

In addition to supporting farmers, the Odisha Cabinet also approved the construction of buildings for Vana Surakshya Samitis (VSS), which play a crucial role in forest conservation. With around 10,000 buildings planned across the state, forest dwellers will have a common facility center to engage in various activities, furthering the cause of forest conservation.

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