To woo the farmers in West Bengal ahead of next year's Lok Sabha elections, the Mamata Banerjee government has decided to disburse farm loans worth around Rs 70 billion at a low-interest rate of 2 per cent, state minister Arup Roy said on Friday.
The interest rate has been reduced from the existing 4 per cent.
The loans would be disbursed through cooperative banks and societies before March next year, Cooperation Minister Arup Roy told PTI.
The move was initiated after the state government received complaints that farmers were either facing difficulties or not getting loans from commercial banks, the minister added.
"We have noticed that lakhs of farmers, mainly those living in remote areas, are not getting support from commercial banks. So we have decided to disburse farm loans worth Rs 70 billion. The loans will be disbursed before March next year," Roy said, expressing hopes of boosting the economy in rural Bengal.
"The quantum of farm loans has been increased to Rs 70 billion from Rs 52 billion last year, a rise of over 34 per cent. The interest rate has also been brought down to 2 per cent from 4 per cent," he added.
Despite several attempts, the state government could not set up bank branc710-gram10 gram panchayat areas and hence decided to allow the cooperatives to function as banks, a highly-placed source at the state cooperation department said.
"And because of that, we have decided to allow 2,661 cooperative societies to function as branches of cooperative banks. This will help bringing more farmers under the banking net," the IAS officer said.
The state government would shoulder the financial burden of the cheaper farm loans, he said.
The opposition Left Front had organised a march in Birbhum district in September demanding farm loan waiver and easier loans for farmers from banks.
The state has also decided to disburse loans amounting to Rs 12 billion through the cooperative banks and societies to self-help groups, the official said, adding that last year the amount was Rs 10 billion.