Gandhinagar : In a major relief to Gujarat’s farming community, the state govt on Tuesday approved Rs 174.1 crore in interest subsidies for short-term agricultural loans, benefiting over 10 lakh farmers across the state. The subsidy covers loans disbursed by cooperative banks from their own funds between April 1 and Sept 30, 2025.
This network includes the apex state cooperative bank, 18 district central cooperative banks, and over 10,900 primary agricultural credit societies (PACS). Under the 2% interest relief scheme — in place since 2009–10 — farmers can access crop loans at a concessional rate of 7%. Vaghani noted that before the scheme’s rollout, cooperative banks charged interest rates as high as 10% to 13%.
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Announcing the decision, agriculture minister Jitu Vaghani said the move aims to ease the interest burden on farmers while bolstering the state’s three-tier cooperative credit structure. Acknowledging that cooperative banks face higher funding costs than commercial institutions, Vaghani added that the state provides this subsidy to absorb the differential, ensuring farmers are shielded from steep borrowing rates. Download the TOI App.