Considering the monsoon deficit, the Union Government has set a Rs 5.75-lakh-crore farm loan target for public sector banks for the current financial year. In fact, “the banks are hopeful of even exceeding the target and crossing Rs 6 lakh crore,” said Finance Minister P. Chidambaram after inaugurating a new Rural Training Centre at Amaravathipudur in Karaikudi (part of his constituency, Sivaganga).
Chidambaram said the current year target was 20 per cent more than that of the previous year. In 2011-12, the target was fixed at Rs 4.5 lakh crore; again the banks exceeded that by Rs 25,000 crore.
Non-farm income
This loan comes at an interest rate of 7 per cent. This will further come down to 4 per cent if the farmers service the loan well, he said.
Elaborating on the training centre, he said that, as farmers cannot depend only on agricultural income, they have to look at non-farming sources too to ensure regular income flow. This centre would train farmers in various activities such as poultry farming, sheep rearing, tailoring and mobile handset repair.
The centre has been jointly sponsored by Nabard , Indian Bank and Indian Overseas Bank. Besides sharing the running expenses , the three sponsoring banks have shared the cost of construction of the new campus as well.
For Tamil Nadu alone, the PSU banks have set a target of Rs 51,000 crore towards farm loans (against Rs 36,000 crore last year), said M. Narendra, Chairman and Managing Director of Indian Overseas Bank.
Of this, 60 per cent will go toward crop loans, and remaining for use in buying tractors, constructing cold storage facilities and mechanisation.