Loans taken through Kisan Credit Card will be covered under loan waiver scheme

In the budget the finance minister had announced for the loan waiver for the farmers. On Tuesday the government issued a statement in which it said the farmers, who had taken agriculture loans through Kisan Credit Card, will be covered under the Rs 60,000 crore loan waiver scheme announced in the Union Budget.

Giving reply to supplementaries during Question Hour in Rajya Sabha, Minister of State for Finance Pawan Kumar Bansal said the loan waiver scheme would be applicable to production credit and short term inventory credit taken on the Kisan Credit Card.

Since the beginning of the Kisan Credit Cards in 1998, till date over 7 crore Kisan Credit Cards have been issued to farmers. In 2006-07, around 85.11 lakh cards were issued an Rs 46.72 lakh credit was extended to farmers through these.

"The aim of the Government is to extend the Kisan Credit Card to all eligible farmers in the country," he said. "All categories of farmers including tenant farmers, share croppers, oral lessees are eligible for a Kisan Credit Card from the co-operative banks, regional rural banks and commercial banks throughout the country."

Bansal informed though the Kisan Credit Card scheme was launched by the previous NDA government, only 1.14 crore cards were issued when in 2004 when it demitted office.

He added loans to farmers, was offered at 7 per cent interest rate, which is two percentage points less than the prime lending rate of 9 per cent.

He told that the government is giving two per cent subsidy to farmer loan and this has amounted to Rs 875 crore in 2006-07.

Farmers have been given the facility of taking timely credit through Kisan Credit Card which they can repay anytime to reduce their interest burden.

Crop loans paid under KCC scheme for notified crops are covered under National Agricultural Insurance Scheme.