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Drought-hit farmers get additional time to repay loans

New Delhi, Feb 26 (Calcutta Tube) Finance Minister Pranab Mukherjee Friday doled out sops to farmers, providing them six more months to repay existing loans and bringing down the effective interest rate of loans to five percent.

‘In view of the recent drought in some states and the severe floods in some other parts of the country, I propose to extend by six months the period for repayment of the loan amount by farmers from Dec 31, 2009, to June 30, 2010,’ Mukherjee said in his budget speech.

The finance minister in his last budget had proposed additional one percent interest subvention as an incentive to those farmers who repay their short-term crop loans as per schedule.

‘I propose to raise this subvention for timely repayment of crop loans from one percent to two percent for 2010-11. Thus, the effective rate of interest for such farmers will now be five percent per annum,’ Mukherjee said.

In addition, the government also earmarked Rs.200 crore for introducing new climate resilient agricultural technologies and another Rs.400 crore to enable a green revolution in the eastern region of the country.

Mukherjee’s budget also contained schemes to promote cold storage facilities including full exemption from customs duty to refrigeration units required for the manufacture of refrigerated vans or trucks.

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