Odisha urges Centre for interest reduction on farm loans

Bhubaneswar: Odisha Chief Minister Naveen Patnaik on Friday urged union Finance Minister Arun Jaitley to reduce the interest rate on medium term (conversion) loans for farmers facing drought situation in the state.

Patnaik, in a letter to Jaitley, requested that reduction in the interest rate and extension of the interest incentive of 3 percent admissible on crop loans to medium term (conversion) loans be considered in view of the widespread damage caused to the standing crops due to drought situation prevalent in Odisha.

With the state facing a drought situation, the Odisha government has decided to convert the crop loans advance during Kharif season as medium term (conversion) loans to mitigate the drought situation, the chief minister said.

The union government provides interest incentives at 3 percent to the promptly paying farmers in respect of crop loans. This facility, however, is not made available in case of conversion of such crop loans on accounts of natural calamities.

As a result, the interest rate on the converted loans at high-level is putting an additional financial burden on the farmers.