Cheaper Farm Loans Up To Rs 2 Lakh

Edible oil imports cause for concern: Vajpayee

Prime Minister Atal Bihari Vajpayee today announced an extension of cheaper loan facility for farmers availing loans up to Rs 2 lakh which will now be charged interest rates lower than the prime lending rate.

At a function for farmers, organised at his residence, Vajpayee promised many such "unprecedented moves". The credit limit under the kisan credit card is also expected to be hiked in the coming days from the present Rs 2 lakh to Rs 5 lakh.

The prime lending rates of public sector banks is in the 11-11.5 per cent region. The government had earlier announced that farmers who borrow upto Rs 50,000 will be have to pay 9 per cent interest.

 

Branding Vajpayee as the messiah of farmers, Agriculture Minister Rajnath Singh and Food Minister Sharad Yadav said the recent cut in interest rates was the most significant in the history of independent India.

"Crop loans below Rs 50,000 will be charged 9 per cent interest and banks are being asked to charge the rate of interest below their PLRs for agricultural loans upto Rs 2 lakh," Vajpayee said.

He said farmers will benefit by around Rs 2,500 crore by these interest rate cuts affected by the Centre.

Bankers said most agricultural loans are in the region of Rs 60,000. Loans for tractors attract interest rates higher than the PLRs, for which specialised loan schemes are being worked out.

They said the prime minister's announcement, in the series of pre-poll moves, was aimed at attracting votes from large farmers who have large agricultural holdings.

Expressing concern over imports of edible oils and pulses, the Prime Minister asked the farmers to go for crop diversification. He also stressed on increased production of flowers, fruits and vegetables which have a large market abroad.

In the last fortnight the government has announced a pro-poor package in the run up to the assembly elections in November and general elections next year.

Life Insurance Corporation has launched an assured return pension plan offering 9 per cent return to senior citizens and a universal health insurance plan has also been introduced for a premium of Rs 365 a year.

The announcement is another significant indication that general elections are likely to be advanced. An informal survey of MPs done by party whips indicates that most of them would not be averse to cutting short their tenure in the Lok Sabha and return to constituencies to contest elections, if the ruling party won at least two of the five assembly elections scheduled for November.

Last week, in the Rajya Sabha, amid laughter, RJD MP Laloo Yadav predicted that this would be the last session of the Rajya Sabha in this Parliament.

According to Party President Venkiah Naidu, the logic of advancing elections is simple. The PM's personal popularity is at an all-time high.

If the BJP wins even two of the five assembly elections to be held in November, it would make sense for the party to advance the general elections.

At a meeting of state presidents of the party at Hyderabad, the message was that the BJP must stay in a state of preparedness. Naidu has told colleagues pro-people measures that the NDA government has taken, including its record of building highways must be showcased.

He quoted surface transport and urban development minister Gen BC Khanduri who said in Lok Sabha on Friday that the NDA government has added in the five years that it has been in power, 23,000 kms of national highways while this figure was 12,000 km between 1947 and 1996.

Central Ministers are followed a pre-scheduled roster of availability in the BJP central office, not just to meet constituents but also to explain to the party workers, the government's stand on a number of issues ranging from the IMDT act to the Cancun WTO meeting.