Finmin no to interest subsidy hike on crop loans

The finance ministry has ruled out an increase in interest subsidy, which at its present level of 2 per cent will cost the exchequer more than Rs 2,000 crore this fiscal, given for short-term crop loans. The government has been giving a subvention of 2 per cent with a ceiling of Rs 3 lakh on the principal amount of crop loans with effect from the kharif season of 2006-07. The scheme has been extended to this fiscal as well. The interest subsidy is provided by the government to public sector banks, cooperative banks and regional rural banks on the involvement of their own funds and concessional refinance to RRBs and cooperative banks through NABARD