Gujarat Zero Interest Loan Scheme 2023 for farmers has been launched by the state government. Under 0 Interest Farmer Loan Scheme, the Gujarat state government will be providing farm loans at 0% interest rate. Loans up to Rs. 3 Lakh would be given to state farmers under the scheme.
The state government will provide farm loans of up to Rs. 3 Lakh at effective 0% interest rate. Cooperative banks provides loans to farmers at 7% of interest rate. Out of this interest rate component, 4% is borne by the state and 3% by the central government to bring down the effective interest rate to zero. Now the state govt. will pay even the central govt’s 3% interest component.
Gujarat Zero Interest Loan Scheme Latest Update
Gujarat government has extended the deadline for repayment of short-term crop loans in view of the ongoing Covid-19 pandemic outbreak in the state. The state govt. also announced to pay the central government’s interest component on behalf of farmers for the delayed repayment.
Interest Component on Zero Interest Farmer Loan Scheme
By virtue of Gujarat Zero Interest Loan Scheme, the state government would shoulder additional burden otherwise payable by farmers. Cooperative banks in Gujarat charge 7% interest on crop loans they advance to farmers from April to July every year. The central and state governments give 3% and 4% interest subvention respectively to such farmers who repay their crop loans on time or before the loan period of one year.
Chief Minister Vijay Rupani has decided to extend the deadline of crop loan repayment for the benefit of farmers. Gujarat govt. will also pay 3% interest subvention announced by the central government and 4% interest subvention announced by the state government to farmers covered under the cooperative lending system. Thus, the Gujarat government will give pay total 7% interest subvention.
Benefit of Interest Subvention by Gujarat Government
Those farmers who miss their loan repayment date becomes ineligible to get the benefit of 3% interest subvention given by the central govt. Now such farmers would not have to pay any interest on their crop loans as the state government would chip in with interest subvention component of central govt. as well. The state govt. will bear the entire 7% interest subvention amount and farmers will not have to pay any interest amount.
Launch of Gujarat Zero Interest Farm Loan Scheme for Farmers
The Zero Interest Loan Scheme for farmers was firstly announced by the state govt. at Gujarat Gaurav Mahasammelan at Gandhinagar on 16th October 2017. Gujarat Zero Interest Farmer Loan Scheme aims to provide farm loans at subsidized interest rates is functional and state govt. has issued detailed guidelines about its implementation.
After implementation, the Gujarat Zero Interest Loan Scheme is proving to be of a great help for the state farmers. The scheme will further reduce the burden of interest from the farmers and will help them increase their income and eventually the income and living standard.