Highlights

  • Govt may increase agri-credit target to Rs 22-25 lakh crore in interim Budget for FY25
  • Currently, the govt provides interest subvention of two per cent on short term agri-loans of up to Rs 3 lakh for all financial institutions

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Budget 2024: Government eyes agri-credit target hike to Rs 22-25 Lakh crore for FY25

The government's agri-credit target is Rs 20 lakh crore for the current fiscal

Budget 2024: Government eyes agri-credit target hike to Rs 22-25 Lakh crore for FY25

The government is likely to announce in the upcoming interim Budget a substantial increase in the agricultural credit target to Rs 22-25 lakh crore for the next fiscal and ensure every eligible farmer has access to institutional credit, according to sources.

The government's agri-credit target is Rs 20 lakh crore for the current fiscal.

Currently, the government provides interest subvention of two per cent on short term agri-loans of up to Rs 3 lakh for all financial institutions. This means farmers are getting a farm loan of up to Rs 3 lakh at a concessional rate of 7 per cent per annum.

An additional interest subvention of 3 per cent per annum is also being provided to farmers who repay on time. Farmers can also avail long term loans but interest rate is as per the market rate.

For the 2024-25 fiscal, there could be a sharp increase in the agri-credit target to Rs 22-25 lakh crore, sources said.

According to the sources, there is more focus on agri-credit and the government is implementing several campaigns to identify the left out eligible farmers and bring them in the credit network.

The agriculture ministry has also created a separate division on 'credit' in order to give a focused approach, the sources added.

Further, the sources mentioned that the credit disbursal for various agricultural and allied activities has been exceeding the target in the last 10 years.

In the current fiscal, about 82 per cent of the agri-credit target of Rs 20 lakh crore has been achieved till December 2023. About Rs 16.37 lakh crore credit has been disbursed by both private and public banks in the said period, the official data showed.

"The agri-credit disbursal is likely to exceed the target this fiscal as well," the sources added.

During the 2022-23 fiscal, the total farm credit disbursal was at Rs 21.55 lakh crore, surpassing the target of Rs 18.50 lakh crore kept for the same period.

As per the data, as many as 7.34 crore farmers have availed credit through the network of Kisan Credit Card (KCC). About Rs 8.85 lakh crore was the outstanding amount as on March 31, 2023.


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