The decision has been taken to ensure adequate flow of credit in the agricultural sector, said Union Minister Anurag Thakur.
The 1.5% interest subsidy will be granted to credit institutions (public and private sector banks, small financial banks, regional rural banks, cooperative banks and computerized primary agricultural credit companies) for the financial year 2022-23 from 2024-25 to provide short-term agricultural loans of up to Rs 3 lakh to farmers.
“This increase in interest subsidy support necessitates additional budgetary provisions of Rs 34,856 crore for the period of 2022-23 to 2024-25 under the scheme,” PTI reported quoting an official statement.
The increased interest rate subsidy will ensure the sustainability of credit flow in the agricultural sector as well as the financial health and viability of lending institutions.
In addition, the Union Cabinet has also approved the increase in the expenditure of the Emergency Credit Line Guarantee Scheme (ECGLS) from Rs 50,000 crore to Rs 5 lakh crore and the additional amount will be earmarked for businesses in the hospitality and related industries.
The #Cabinet approves the improvement of the corpus of the emergency line of credit guarantee system to increase the limit of admission… https://t.co/ZtLu2eIcqc
— Satyendra Prakash (@DG_PIB) 1660729214000
In the Union Budget 2022-2023, there was a proposal to increase the limit of the ECLGS from Rs 4.5 lakh to Rs 5 lakh crore to help the hospitality sector affected by the coronavirus pandemic.
The hike in the amount was done due to the severe disruption caused by the pandemic in the hospitality and related sectors, Thakur said while briefing the media on various decisions taken by the Cabinet.
He said loans worth around Rs 3.67 lakh crore have been sanctioned under the ECLGS until August 5, 2022.
This will give a boost to the hotel, tourism and related sector.
Thakur said these sectors are the ones that require capital expenditure.
“The Cabinet approves the extension of access to the Traditional Knowledge Digital Library database to users other than patent offices,” Thakur said of the Cabinet’s other decision.
