Problem due to reduction in interest subsidy for cooperative societies

Madikeri, Dec. 11: The state government has reduced the interest subsidy provided to primary agricultural cooperative societies for zero interest rate loans, which has hit the working activities of cooperative societies. In this context, Legislative Council member M.P. Suja Kushalappa has demanded that the interest subsidy be revised and sanctioned as per the demand of the society.

He raised this issue during the zero hour of the Legislative Council session. The minister concerned informed that a reply will be provided through the Chief Minister.

The interest subvention rate for short-term agricultural, animal husbandry and fisheries loans and medium-term loans disbursed to farmers at zero interest rate for the year 2024-25 and proposed for the year 2025-26 has been reduced and the interest subvention rate for 2025-26 has been reduced from 2.00 percent to 1.75 percent and for loans disbursed directly to farmers by the association with its own capital, it has been fixed at 4.60 percent and for loans disbursed directly to farmers by the association with its own capital, it has been fixed at 9.10 percent.

For medium-term and long-term agricultural loans disbursed by the association with its own capital, the interest rate which was earlier 7.02 percent has been reduced to 6.23 percent. And if the DCC Bank capital is reduced to 1.75%, the cooperative societies will suffer financial losses and their functioning will become difficult, Suja pointed out.

 Primary agricultural cooperative societies are an important center for the economic self-reliance of farmers at the rural level, and they aim at service rather than profit-making. Therefore, the cooperative societies have been maintaining financial discipline by disbursing zero-interest loans and medium-term-long-term loans provided by the state government, and have been recovering more than 99% every year. The interest subsidy provided by the government is the main source of income of the society, and reducing this will make the societies suffer losses and make it difficult to provide good service. Therefore, he urged the government to grant the request of the society and revise and sanction the interest subsidy as per the demand of the society.

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