IndiaFilings » Learn » Gujarat Zero Interest Loan Scheme

Gujarat Zero Interest Loan Scheme

Gujarat Zero Interest Loan Scheme

Gujarat Zero Interest Loan Scheme

The Gujarat State Government has announced Gujarat Zero Interest Loan Scheme for farmers. The scheme launched in 2017, facilitates farmers to easily avail loan up to Rs. 3 lakhs. All eligible beneficiaries can get loans with zero interest rate. The article takes a closer look at the features of the Gujarat Zero Interest Loan Scheme.

Objective of the Scheme

The farmers of Gujarat has been protesting for their current situation for a very long time. To make the loans burden free, all the state governments along with the Central government is taking initiatives. The scheme is considered to be one of the many schemes for farmers in the State, that benefits the farmers. By implementing this scheme, farmers can avail crop loans without interest payment.

Scheme Overview

The State Government of Gujarat has announced a Zero Interest Loan Scheme up to 3 Lakh rupees for the farmers. The Central and State government together gives 7% interest to the farmers. This interest rate relief given to the farmers reduces their short-term production credit (crop loan) within one year of distribution of the loans. Moreover, to reduce the concerns of the marginal farmers, the government provides crop loans on 0% interest under the Chief Minister’s scheme. The State Government has decided to provide a crop loan facility to the farmers of the state at 0% interest so that they can be granted loans to the banks.

Features of Gujarat Zero Interest Loan Scheme

The main highlights of the zero interest loan scheme are as follows.

  • The scheme intends to enhance the empowerment of farmers of the state.
  • The whole sets of benefits of the scheme are for the development and welfare of the farmers in the state.
  • Apart from this, necessary assistance is also provided for the farmers.
  • The farmers cannot stand the pressure of the interest rates of the scheme. Therefore, the GujaratZero Interest Loan scheme sees to that, there are no interest rates that are added to the loan amount.
  • The scheme offers a loan up to Rs. 3 lakhs without any interest rates.
  • Previously, the farmers have to pay only 1% of interest while the remaining 6% is shared equally between both the Central and State Government.
  • Now, the Government has decided to pay that 1% by launching this scheme.
  • Around 25 lakhs of farmers across the state would be the beneficiaries of the loan scheme.

Interest Subvention

The farmers were paying 7% interest loan in the state. Later, the Central Government stated that 3% of the loan would be paid by the Central Government and 3% will be paid by the State Government. The remaining 1% has to be paid by the farmers. The Chief Minister of the State has announced that the remaining 1% would be paid by the Gujarat State Government.

Interest Subvention Scheme

Beneficiaries of the Scheme

All the small and medium farmers are the main beneficiaries of the scheme. According to the announcement, 25 lakhs farmers will be benefited from the scheme. The beneficiaries have to be the residents of the State, possessing a residential certificate.

The budget of the Scheme

For the implementation of the scheme, the State Government has allotted Rs. 700 Crores.

Implementation of the Scheme

The State Government has implemented the loan waving scheme of the farmers across the state. Through this, a portion of the loan amount will be waived off. With the zero interest crop loan, the State Government has taken other steps to enhance the lives of the farmers in Gujarat.