New Delhi: Ahead of the Lok Sabha polls, the Government on Monday reached out to rural women by rolling out a Rs 1,400 crore interest subvention on loans taken by Self Help Groups working for their empowerment.
Interest subvention for the loans taken by women Self Help Groups (SHGs) is a significant initiative under Cetre's ambitious programme National Rural Livelihoods Mission (NRLM).
Rural Development Minister Jairam Ramesh said that it is applicable for loans availed by women SHGs from April 1, 2013.
According to the Minister, from today onward, all banks will lend to women SHGs at upfront 7 per cent interest (for loans upto Rs 3 lakhs) in 150 select backward districts, most of which are affected by Naxal menace.
These SHGs will get a further 3 per cent subvention on prompt repayment, thus the effective charge on all such loans will be 4 per cent only.
In addition, all women SHGs with outstanding loans (from April 1, 2013 onwards for loans upto Rs 3 lakhs) will pay interest only at 7 per cent from today. They will be reimbursed the differential interest amount for the period April 1, 2013 to January 31, 2014, Ramesh said.
In the remaining districts, women SHGs that are NRLM compliant and are regular in repaying bank loans will enjoy interest subvention on reimbursement basis, making effective interest 7 per cent for loans upto Rs 3 lakhs. This is also with effect from April 1, 2013.
"In 2013-14, total budgetary allocation for the NRLM is Rs 2,600 crores. Out of Rs 2,600 crores, we are spending Rs 650 crores for subsidising interest rate in 150 districts and we are spending Rs 750 crores to subsidise the interest rates in the non-150 districts," Ramesh said.
"So out of Rs 2,600 crore budgetary allocation for NRLM, Rs 1,400 crores is the total allocation for subsidising interest rates. That is all coming from the Ministry of Rural Development. It is not the favour being done to us by the Finance Ministry," he added.
NRLM has set out with an agenda to cover 7 crore rural poor households across all the 2.5 lakh Gram Panchayats in the country through 60-70 lakh SHGs and federated institutions of the rural poor women in a period of 8-10 years and provide hand-holding support to help them come out of poverty.