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New Delhi. In India, farming is still the main means of livelihood for crores of people. Most of the farmers in the country come from small and marginal class, who often find it difficult to get timely and cheap loans for farming. In view of this problem, the Central Government has taken many important steps to make institutional loans easily available to the farmers. The objective of these measures is to save farmers from expensive money lending and make farming economically strong.

1.Cheap loan on Kisan Credit Card

Kisan Credit Card (KCC) provides loans to farmers at affordable rates for purchasing farming expenses such as seeds, fertilizers and pesticides. Under the revised interest subvention scheme of the government, the interest rate on KCC has been fixed at 7 percent. If farmers repay the loan on time, they get an additional rebate of 3 percent, taking the effective interest rate to only 4 percent. Apart from this, the facility of KCC has now been extended to areas like animal husbandry, dairy and fisheries.

2. It is mandatory for banks to give agricultural loans

According to the Priority Sector Lending rules of the Reserve Bank, all commercial banks, regional rural banks and small finance banks are obliged to extend at least 18 percent of their total credit to the agriculture sector. Out of this, 10 percent has been earmarked especially for small and marginal farmers. This ensures that farmers get adequate bank loans.

3. Pradhan Mantri Dhan-Dhanya Krishi Yojana

The Central Government has announced the launch of Pradhan Mantri Dhan-Dhanya Krishi Yojana in the Budget 2025-26. The objective of this scheme is to increase the availability of agricultural loans in those districts where till now the farmers were not able to get adequate loans from the banks. Under this, both short-term and long-term agricultural loans will be promoted.

4. Agricultural loan up to Rs 2 lakh without guarantee

The limit for guarantee-free short-term agricultural loans has been increased from January 1, 2025. Earlier, farmers could take loan up to Rs 1.60 lakh without guarantee, which has now been increased to Rs 2 lakh. With this, farmers will not need any property or guarantee to take loan. This decision will especially benefit small and marginal farmers, who constitute about 86 percent of the farmers in the country.

5. Role of NABARD in strengthening rural finance

National Bank for Agriculture and Rural Development (NABARD) plays an important role in strengthening the agricultural credit system in rural areas. It prepares a possible loan plan for each district and gives directions to the banks. Apart from this, NABARD also provides financial assistance to regional rural banks, cooperative banks and microfinance institutions, so that the credit needs of the farmers can be met on time.