No plans to reduce interest rate on farm loans

New Delhi, Dec 3 (PTI) The government today said it has no plans to reduce the rate of interest to four per cent from the current five per cent on farm loans.

In a response to a written query in Rajya Sabha, minister of state for food and agriculture K V Thomas said that the government has no proposal under consideration for reducing the interest rate to four per cent on farm loans.

The minister said in 2009-10 fiscal, government provided an additional one per cent interest subvention to those farmers who repaid their short term crop loan as per schedule.

"The government has raised this subvention for timely repayment of crop loan from one per cent to two per cent from the year 2010-11," he said while adding that thus the effective rate of interest for such farmers will be five per cent per annum.