Interest subvention scheme for fish farmers to be extended

Eyeing polls in West Bengal, Kerala and Tamil Nadu, the government today announced to extend the scheme of interest subvention to fish farmers and fishermen, which would enable 20 lakh of these people to get concessional loans.

Amid criticism of five per cent service tax on certain categories of hospitals, Finance Minister Pranab Mukherjee also extended the facility of viability gap funding (VGF) to capital investment in health and education by clubbing those as infrastructure segments.

In reply to demand for grants in the Lok Sabha, he also kept the option open for considering various demands on taxes proposed in the Budget, for later this month. “These (feedback on tax proposals) are under examination. I shall respond to these issues in my reply to the discussion on the finance Bill, 2011 later during this session,” he said.

The finance minister announced to provide interest subvention of two per cent and further three per cent relaxation on timely payment of loans to fish farmers and fishermen as well, besides farmers.

At present, the government provides two per cent subvention to short-term crop loans to farmers, which enable them to get loans at seven per cent. The government further provides two per cent subvention to those farmers who pay their crop loans on time. In this Budget, the finance minister proposed to give further one per cent subvention to those who pay their loans on time.

As such, farmers and fishermen will be able to get loans at just four per cent, in case they are repaying them on time.

“This will benefit over 20 lakh fish farmers and fishermen engaged in fishing operations in the country,” he said.

Of the four states going to assembly polls next month, three — Tamil Nadu, West Bengal and Kerala have huge population of fishermen. Besides, Union Territory of Puducherry will also have assembly elections from next month.

Mukherjee said, “Investment in education and health sectors has a high priority in our policy framework... Henceforth, capital stock in educational institutions and hospitals will be treated as infrastructure sub-sectors.” As such, capital investment in these sub-sectors will be eligible for VGF, he said.

VGF is a scheme run by the finance ministry to fill a gap in infrastructure sector to make it viable for private sector funding. A project may be quite useful for social purpose, but for private investment it may not have that viable option, hence the finance ministry provides funding so that private players are enthused to take up these projects.