The Union Cabinet, at a meeting chaired by Prime Minister Narendra Modi here on Wednesday, decided to restore the interest subvention on short-term agriculture loans to 1.5% for all financial institutions, including cooperative banks.
The Centre said the increase in interest subvention support requires an additional budgetary provision of ₹34,856 crore for the period of 2022-23 to 2024-25.
Explaining the rationale behind the decision, Union Minister Anurag Thakur said as the Reserve Bank of India had recently increased the repo rate and an intervention was necessary to keep the interest rate on short term agriculture loan at 7%.
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