Budget 2024: Govt To Increase Farmers' Agricultural Credit Target To Rs 22-25 Lakh Cr

The central government is poised to announce an increase in the agricultural credit target for the upcoming fiscal year in the imminent interim budget, potentially ranging from Rs 22 to 25 lakh crore. This move is anticipated to ensure that eligible farmers have continued access to institutional credit, surpassing the current financial year’s agricultural credit target of Rs 20 lakh crore, sources said.

Currently, the government provides a 2% interest subsidy on short-term agricultural loans up to Rs 3 lakh for all financial institutions. This allows farmers to obtain agricultural loans up to Rs 3 lakh at a discounted interest rate of 7% per year. Additionally, farmers are offered an extra interest rebate of 3% per year for timely loan repayment. While farmers can also avail long-term loans, the interest rates align with prevailing market rates. Sources suggest that the agricultural credit target for the financial year 2024-25 may be raised to Rs 22-25 lakh crore.

The government’s focus on agricultural credit is evident through various campaigns aimed at identifying eligible farmers and integrating them into the credit network. The agriculture ministry has established a dedicated division for credit as part of its comprehensive approach.

Sources claim that over the last decade, agricultural loan disbursements have consistently exceeded the set targets. Government data indicates that by December 2023, about 82% of the agri-credit target of Rs 20 lakh crore for the current financial year has been achieved, with approximately Rs 16.37 lakh crore disbursed to both private and public banks during this period. It is estimated that, once again, agricultural credit distribution will surpass the set target for this financial year.

In the financial year 2022-23, the total agricultural credit disbursement reached Rs 21.55 lakh crore, exceeding the set target of Rs 18.50 lakh crore by Rs 3.05 lakh crore. Notably, data also revealed that 7.34 crore farmers availed loans through the Kisan Credit Card (KCC).

This proactive approach by the government underscores its commitment to supporting farmers and fostering growth in the agriculture sector.