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Naveen Patnaik seeks softer interest for converted loans from Centre

Seeks to reduce financial stress of Odisha farmers suffering from crop loss due to drought and pest attack

BS Reporter  |  Bhubaneswar 

Naveen Patnaik (File Photo)
Naveen Patnaik (File Photo)

In a desperate attempt to reduce the of the farmers in suffering from due to and pest attack, Chief Minister has urged the Prime Minister to keep the on the medium term (conversion) loans at par with the

He also requested the prime minister, in a letter, to extend the interest incentive of 3% admissible on to the medium term (conversion) loans.

There is an alleged spurt in farmers' suicide after for the shortage of rainfall. Peasants in the state are also setting the crops on fire due to In order to help the farming community suffering from crop loss, the government has already initiated proactive measures to provide relief to the affected farmers. As a part of the package announced for the farming community, the state government has decided to convert the advanced during season in the affected areas as medium term (conversion) loans.

In case of crop damage between 33% and 50%, the can be converted into medium term (conversion) loans repayable within a period of two years with a moratorium of one year. Similarly, where the crop damage is 50% and more, the conversion facility of the will be allowed for a maximum period of five years with the one-year moratorium.

The Modi government provides interest incentive at 3% to the prompt paying farmers in respect of crop loans, which is not made available in case of conversion of such in the event of occurrence of natural calamities.

As a result, the on the converted loans remains at a higher rate, which is at present 11.20%. Similarly, the interest on is not subsidised as interest subvention for the same is not available.

"In my opinion, when are converted into medium-term loans, the should remain at par with the Similarly, the incentive made available to the prompt paying farmers for should also be extended to the medium term (conversion) loans to provide relief to the farmers affected due to and pest attack", Patnaik stated in the letter.

First Published: Mon, November 13 2017. 22:15 IST