Government Initiates ₹1,000 Crore Program to Alleviate Post-Harvest Credit Issues for Farmers
India has recently launched a ₹1,000 crore Credit Guarantee Scheme (CGS) aimed at enhancing credit availability for farmers and allied sectors, such as dairy and fisheries. This initiative is part of broader efforts to improve credit access, digitize cooperative societies, and empower rural India.
### Key Features of the Scheme
The Credit Guarantee Scheme is designed to provide a government-backed guarantee to lenders, reducing the risk of lending to farmers, particularly small and marginal ones. This measure is expected to encourage banks to lend more to this sector, thereby boosting rural incomes and livelihoods.
The scheme covers loans of up to ₹75 lakh for small and marginal farmers and up to ₹2 crore for traders who do not work on farms. The current post-harvest lending in agriculture is ₹40,000 crore, and the government aims to raise it to 5.5 lakh crore over the next ten years.
### Digitization and Transparency
As part of the rural credit ecosystem modernization, efforts include digitizing cooperative societies to simplify credit delivery and enhance transparency. The e-Kisan Upaj Nidhi platform will make the lending process easier for farmers, requiring them to visit bankers only once to get a loan.
### Expected Outcomes
The Credit Guarantee Scheme is expected to improve access to affordable credit for farmers, enabling them to secure larger and timely loans at reasonable interest rates. This is crucial, considering existing schemes like the Kisan Credit Card offer loans up to ₹3 lakh at subsidized interest rates.
Empowering farmers financially is aligned with Prime Minister Narendra Modi's vision of creating viable livelihoods within villages, thereby reducing urban migration. The scheme also aims to enhance agricultural productivity and income by enabling farmers to invest in better inputs, diversified crops, micro-irrigation, and adapt to climate impacts.
The Credit Guarantee Scheme is also expected to strengthen rural cooperatives, fostering collective bargaining and market access for farmers. Encouraging the establishment and expansion of large cooperatives similar to Amul could potentially benefit the agricultural sector significantly.
In summary, the ₹1,000 crore Credit Guarantee Scheme is designed to facilitate greater and safer credit flow to farmers and allied sectors, reflecting the government’s commitment to rural empowerment, improved agricultural sustainability, and climate resilience. This scheme complements existing credit programs like the Kisan Credit Card and builds on rural development initiatives promoting financial inclusion and increased farm incomes.
The Credit Guarantee Scheme, a government-backed initiative, aims to provide a guarantee to lenders, enticing them to lend more to farmers and allied business sectors such as dairy or fisheries, thus boosting rural incomes and livelihoods. This scheme, with its potential to improve access to affordable credit, aligns with Prime Minister Narendra Modi's vision of enhancing agricultural productivity and income by empowering farmers financially.
