Farm loan gets dearer, sops for house buyers

New Delhi
Sept. 10: The Union Cabinet on Thursday decided to reduce the subsidy given to farmers on short-term crop loans by one percentage point to two per cent for this fiscal year (2009-10). The move is expected to reduce the liability of the Central exchequer by Rs 311 crore. But, for housing loans up to Rs 10 lakh for houses that cost no more than Rs 20 lakh, the government has decided to provide a one per cent interest subsidy.
The government will pay two per cent interest subsidy to banks against three per cent in the last fiscal for granting short-term crop loans at a concessional rate of seven per cent, the I&B minister, Ms Ambika Soni, said.
The one per cent subsidy will benefit home loan seekers in Tier-1 and -II cities, who will be able to save up to Rs 10,000 on monthly repayments for one year on their loans.
The government also cleared a proposal to give five per cent additional dearness allowance to its more than eight lakh employees and pensioners. The additional DA will be given with effect from July 1, 2009.
Source::DC