The Indian government is looking to increase India’s farm credit in the upcoming budget, fuelling the agriculture sector
With a budget presentation looming, the agriculture sector in India is hoping for an increase on the credit target to stimulate local production.
The Times of India sources have reported that the government’s priority will be agriculture in 2018-19.
The potential changes will see the national agriculture borrowing limit raised 1 lakh crore (one trillion) rupees to 11 lakh crore (11 trillion) rupees – nearly AU$200 billion.
Having a stable borrowing scheme will help farmers move away from non-institutional sources of credit where interest rates can be unstable and cripple profits. This is especially important in the high input/high output field of agriculture.
Typically, a farm loan in India attracts an interest rate of around 9 per cent. However, the government loans can have rates as low as 4 per cent if payments are made on time.
Details will be confirmed in the budget presentation on 1 February.