In a bid to bolster the agricultural sector and conserve forests, the Odisha Cabinet has recently approved two crucial schemes. One of these is the ‘Interest Subsidy-Subvention,’ which aims to provide financial support to farmers by offering interest-free crop loans and retrospective interest rates. The second scheme focuses on the construction of buildings for Vana Surakshya Samitis (VSS) to enhance forest protection and organize forest dwellers.
Providing Interest-Free Crop Loans
The Interest Subsidy-Subvention Scheme seeks to provide a much-needed boost to farmers by offering interest-free crop loans up to Rs. 1 lakh. This move is expected to alleviate financial burdens and promote agricultural activities; ensuring farmers have access to affordable credit.
Retrospective Interest Rate for Higher Loan Amounts
For crop loans ranging from Rs. 1 lakh to Rs. 3 lakh, the scheme will charge a retrospective interest rate of 2% starting from April 1, 2022. While interest-free loans are capped at Rs. 1 lakh, this measure ensures that farmers requiring larger loans can still benefit from subsidized interest rates.
Expanding Financial Support
The Odisha Cabinet’s decision to expand the financial support for farmers is a significant step forward. Previously, interest-free crop loans were limited to Rs. 50,000 under the KALIA program. The new scheme opens up greater opportunities for farmers to access credit and invests in their agricultural ventures.
Objectives and Duration of the Scheme
Five-Year Duration: The Interest Subsidy-Subvention Scheme is set to be in effect for five years, from 2023-24 to 2027-28. This extended period ensures a sustained focus on empowering farmers and promoting agricultural growth.
Compensating Cooperative Banks and PACS: The scheme aims to compensate cooperative banks and Primary Agricultural Cooperative Societies (PACS) for the losses incurred in providing crop loans as mandated by the government. This incentivizes these institutions to continue supporting farmers, even in challenging economic conditions.
Boosting Agricultural Productivity: By offering affordable credit flow to farmers, the scheme aims to boost agricultural productivity in the state. With better access to finance, farmers can invest in modern equipment, high-quality seeds, and improved farming techniques, leading to higher yields and overall growth in the agrarian sector.
Cooperative Banks in Crop Loan Dispensation
The success of cooperative banks in crop loan dispensation has been remarkable. Over the years, they have significantly increased the amount of loans disbursed as well as the number of farmers benefiting from these loans. From Rs. 438.36 crore disbursed to 6.40 lakh farmers in 2000-01, the cooperative banks have seen a remarkable growth in crop loans, reaching Rs. 16,683.57 crore disbursed to 34.57 lakh farmers in 2022-23. This exponential growth reflects the effectiveness of the cooperative banking system in reaching out to farmers.
Currently, the cooperatives provide approximately 55% of the total crop loans disbursed in the State, surpassing the national average of 17%. This highlights the crucial role played by cooperative banks in ensuring credit availability to farmers in Odisha.
Conservation of Forests: Vana Surakshya Samitis (VSS) Initiative
Recognizing the importance of preserving forests, the Cabinet has also approved the construction of buildings for Vana Surakshya Samitis (VSS). VSS plays a vital role in protecting and conserving forests in the state, involving local communities in safeguarding natural resources.
The construction of VSS buildings is expected to provide forest dwellers with common facility centers for various activities. These centers will enhance the organization and collaboration of forest communities, leading to more effective forest protection and conservation efforts.
Budget Allocation and Implementation
For the fiscal year 2023-24, the government has allocated a budget of Rs. 250 crore for the construction of 2,941 VSS buildings. The implementation of this project will occur in phases, aiming to construct approximately 10,000 buildings for VSS from 2023-24 to 2026-27.
