Interest Subsidies
By way of interest subsidy the Government promotes the credit take off and also relieve the economically weaker section of the society by reducing their interest liability. The subsidy schemes are announced from time to time with specified terms and conditions.
For example, a certain part of the country may have faced a drought and the State or the Central Government declares that they will pay 50% of the interest payable for crops loans.
The Central Government has recently announced an Interest Subsidy scheme for educational loans availed by students, who belong to the economically weaker sections from scheduled Banks.
The salient features of the schemes - Educational Loan
- It will be applicable from the academic year 2009-10
- The annual family income of the student should be within Rs.4.5 lakhs
- Only the interest component during the moratorium period (as decided by IBA) will be paid by the Government.
- The loan should be availed for pursuing technical or professional courses in India.
- The facility can be availed by a student only once either for undergraduate course or postgraduate course. However, if it is a combined course, the full interest is subsidized.
- Canara Bank is the nodal Branch for this scheme.
Providing subsidary to the economically weaker section of our society boost their morale. It also adds up in the manifesto of the goverment in power. Whatever be the reason the thought is itself noble. But in country like ours its a pity that all these subsidies hardly reaches the needy. It is grabbed up much before and the needy are left at the mercy of God.
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