It aims to save farmers from high-interest rates generally charged by money lenders in the unorganized sector.
Finance Minister Nirmala Sitharaman announced concessional credit boost worth Rs 2 lakh crore for 2.5 crore farmers via Kisan Credit Cards (KCC) issued by the Centre. She said that “A special drive will be undertaken to offer concessional credit to PM-Kisan beneficiaries via Kisan Credit Cards. Fishermen & Animal husbandry farmers would also be included in this drive”.
About 2.5 crore farmers across the country will be covered and will benefit from the credit flow of about Rs 2 lakh crore. The minister indicated that around 25 lakh new Kisan Credit Cards are in the pipeline for small & marginal farmers. It must be noted that Kisan Credit Card is a government scheme that aims to save farmers from high-interest rates generally charged by money lenders in the unorganised sector.
The incentive on crop loans provided till March has also been extended till 31st May to support farmers, Finance Minister said while sharing details of the 2nd phase of the economic stimulus package worth Rs 20 lakh crore announced by PM Modi on Tuesday.
Sitharaman told that three crore farmers with farm loans of Rs 4.22 lakh crore availed the benefit of three-month loan moratorium. The announcements made by Finance minister today focussed on small farmers, migrant workers, street vendors and small traders.
While commenting on government’s announcement of credit boost for farmers, Ajay Kakra, Leader – food and agriculture, PwC India said, “The initiative boost credit of 2 lakh crore to increase coverage of 2.5 lakh farmers under KCC will surely increase the credit umbrella and help increase their liquidity issue given the acute cash crunch during Covid 19 situation.”
He also added that , Additional Emergency Working Capital(EWC) fund of INR 30000 crores from NABARD can come very handy to farmers for managing post-harvest operations for Rabi or pre-season operations for Kharif season during the covid situation when the entire food supply chain is looking forward towards increasing liquidity.
