New Delhi: The Reserve Bank of India (RBI) has given a big order regarding promoting transparency. Farmers often complain that they face difficulties in obtaining interest subsidy from banks. Taking a major step in this regard, the Reserve Bank has ordered the payment of interest subsidy on short-term crop loans directly to the accounts of the farmers rather than to the banks. The RBI group says that instead of the interest subvention scheme, the funds should be transferred to the targeted beneficiaries through DBT through individual or self-help groups.
The beneficiaries include marginal and small farmers, sharecroppers, tenants and landless labourers. The group recently submitted its report to the Reserve Bank. At present, the government pays interest subsidy through RBI and NABARD to banks on short-term crop loan as an interest rate rebate. For this, every year the government makes a provision in its budget. In such a situation, the amount of interest subsidy will go directly into the accounts of farmers. This will also bring transparency to the existing system of agricultural credit. In 2006-07, the government introduced an interest subvention scheme for short-term crop loans. The government's effort is to encourage investment in agriculture.
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