With high inflation, especially food prices much beyond comfortable levels, the Budget is likely to provide sops to the farm sector including reduction in interest rate to 4 per cent for timely re-payments and boosting investments in agri-infrastructure. At present, farmers get credit at a rate of 7 per cent.
However, those who clear dues on time get an incentive of two per cent — paying back at the rate of 5 per cent.
However, PM’s Working Group on Agriculture, headed by Haryana Chief Minister Bhupinder Singh Hooda, has proposed that all farm loans should be given at 4 per cent.
Meanwhile, Agriculture Ministry in its Budget wish-list has recommended farm loans at 4 per cent for prompt payers. It has also sought more funds for creating agri-infrastructure and enhancing output of millets, vegetables and palm cultivation.