NABARD refinance for short-term agricultural loan at subsidised interest rate has dropped by 58%: Cooperation Minister K.N. Rajanna

The short-term agriculture loan at subsidised rate of interest, extended as part of refinance by National Bank for Agricultural and Rural Development (NABARD) to the State cooperative sector, has come down by 58% this financial year, Cooperation Minister K.N. Rajanna said on Tuesday.

NABARD has so far released ₹3,236 crore in 2024-25, a dip from ₹5,600 crore released in 2023-24, he told the Legislative Council in reply to a question from Congress member Dinesh Gooligowda.

While Karnataka had placed a demand for ₹9,219 crore for the financial year in the category of short-term agriculture loan at a subsidised rate of interest, Mr. Rajanna said that NABARD initially released only ₹2,340 crore. “After Chief Minister and I wrote seeking higher amount, NABARD released another ₹896 crore. We are hoping more fund will come,” he said.

As per the data released by the government, the State received ₹5,500 crore in 2020-21, ₹5,483.90 crore in 2021-22, ₹5,550 crore in 2022-23, and ₹5,600 crore in 2023-24. Additionally, the State received ₹1,700 crore and ₹1,415 crore during COVID-19 in 2020-21 and 2021-22, respectively.

At higher rate of interest

In the current financial year, NABARD has also released ₹8,580 crore at a higher rate of interest against ₹5,200 crore released during 2023-24 in this category. However, the medium- and long-term loan agriculture loan extended by NABARD to the Apex Bank has come down from ₹2,199.62 crore in 2023-24 to ₹1,128.65 crore in 2024-25.

Mr. Rajanna also said that nationally, all States had received lesser allocation, and Karnataka was the only State to receive additional money after communication with NABARD seeking higher funds.

In his written reply, the Minister said that NABARD in its Seasonal Agricultural Operation loan policy had been requested to provide 40% refinancing under realistic lending programme. Accordingly, the Apex Bank had sought ₹9,160 crore that is about 40% of ₹22,902 crore. However, there has been a shortfall of ₹5,924.69 crore against the total demand placed.