New Delhi :  The government has increased institutional credit to the agriculture sector by 270 per cent in the past decade, with banks disbursing Rs 20.39 trillion during the April-January period of this fiscal year.

This is in stark contrast to the Rs 7.3 trillion disbursed in the entire 2013-14 fiscal year, as per a senior official, reported BS.

In the Budget for the 2023-24 fiscal year, the government set an ambitious agriculture credit target of Rs 20 trillion. 

Banks have not only surpassed this target but could potentially exceed Rs 22 trillion by the end of this fiscal year.

To ensure accessible agriculture credit at a reduced interest rate of 7 per cent per annum, the Union Agriculture Ministry has implemented an interest subvention scheme for short-term crop loans up to Rs 3 lakh. 

This scheme offers a 2 per cent interest subvention to banks and an additional 3 per cent incentive to farmers for prompt loan repayment, effectively reducing the interest rate to 4 per cent.

“Institutional credit for the agriculture sector has increased from Rs 7.3 trillion in 2013-14 to Rs 20.39 trillion in 2023-24 (till January 31, 2024) for 1,268.51 lakh accounts,” a senior agriculture ministry official said.