Union Cabinet Current Affairs
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The Union cabinet has approved the Interest Subvention Scheme (ISS) for farmers for the year 2017-18. The Government has allocated Rs. 20,339 crore for this scheme.
The objective of the scheme is to make available agricultural credit for Short Term crop loans at an affordable rate. The scheme is expected to boost agricultural productivity and production in the country.
Under this scheme, farmers will be given a short term crop loan up to Rs. 3 lakh payable within one year at an interest rate of 4% per annum.
The scheme will be continued for 1 year and will be implemented by NABARD and RBI.
The interest subvention will be provided to Public Sector Banks (PSBs), Private Sector Banks, Cooperative Banks and Regional Rural Banks (RRBs) and to NABARD for refinancing to RRBs and Cooperative Banks.
Interest subvention of 5% per annum will be provided to those farmers who pay the short term crop loan in time. Farmers will have to effectively pay only 4% as interest. For farmers who do not pay crop loan in time the interest subvention of only 2% will be applicable as against 5% available above.
This institutional credit is expected to demotivate farmers from taking loans from non-institutional sources of credit at high rates of interest.
Interest Subvention Scheme (ISS) has been running since 2006-07. Under this scheme, crop loans are offered at 7% rate of interest for loans up to Rs.3 lakh. Further subvention of 3% will be provided to farmers who prompt repay the loans within a period of one year from the date of advance.
The scheme also offers post-harvest loans for storage in accredited warehouses against Negotiable Warehouse Receipts (NWRs) for a period of 6 months to check distress sale.
The Union Cabinet has approved the abolition of 25 year old FIPB. Henceforth, concerned ministries will be responsible for direct approval of foreign investment proposals. The decision falls in line with Finance Minister Arun Jaitley’s proposal to scrap FIPB in this year’s Union Budget.
FIPB was constituted in the mid-nineties under the Prime Minister’s Office following economic liberalisation.
Over 90% of the FDI inflows in value terms enters through automatic route. The government expects that scrapping of FIPB would help in ease of doing business. At present, only 11 sectors, including defence and retail trading needs government approval for foreign direct investment (FDI).
FDI proposals would be approved by the ministries concerned by following the standard operating procedure approved by the Cabinet. Those 11 sectors that require approval would be dealt directly by the concerned ministry.
In proposals related to security, the proposals will also need to require the approval of Home Ministry.
Those proposals which are presently pending before the FIPB will be sent back to the ministries concerned.
The FDI proposals above Rs 5,000 crore will continue to come under the purview of the Cabinet Committee on Economic Affairs (CCEA).