Interest Subsidy on Loans for Agriculture and Allied Activities

What is Goa's interest subsidy on agriculture and allied activity loans?

Interest Subsidy on Loans for Agriculture and Allied Activities is a credit scheme of the Government of Goa, implemented jointly by the Directorate of Agriculture, the Directorate of Animal Husbandry and Veterinary Services and the Directorate of Fisheries. The scheme's stated purpose is to provide credit facilities to farmers at a subsidised rate of interest, so as to accelerate investment in agriculture and allied sectors in the State.

The mechanism is straightforward and worth stating plainly, because borrowers often misunderstand it. You borrow from a bank at the bank's own rate. You pay only 4%. The Government of Goa pays the bank the difference. The subsidy never passes through the borrower's hands; it is released directly to the lending institution, which is then obliged to credit it to the borrower's loan account.

The scheme document notes that it will remain operative initially for a period of three years and will be reviewed for continuation on completion of three years. A revised version of the scheme has been notified for the period from 1 April 2025, so a borrower should confirm the current operative notification with the concerned Directorate before assuming coverage.

How much is the benefit worth?

• Interest rate to the farmer: 4% per annum.
• Maximum loan covered: Rs 5.00 lakh, cumulative across one or more loans for one or more purposes.
• Maximum subsidy period: 5 years, including on long-term loans that run longer than that.

The value in rupees depends on what the bank charges. A borrower paying a bank rate of 9% on Rs 5.00 lakh has 5 percentage points met by the State, which is around Rs 25,000 in the first year of a term loan, tapering as the principal reduces on a reducing-balance loan.

Because the ceiling is cumulative and revolving, the scheme is more flexible than it first appears: on total repayment of one loan the farmer becomes eligible for another, subject to the same overall ceiling of Rs 5.00 lakh.

Who is eligible for the Goa interest subsidy?

You can apply if you are:

• A bonafide agriculturist in the State of Goa;
• An individual in the animal husbandry sector; or
• An individual in the fisheries sector,

with or without a Kisan Credit Card, and your loan is sanctioned by a nationalised bank, a scheduled commercial bank, the Goa State Co-operative Bank or a Primary Agricultural Co-operative.

You are not eligible, and cannot apply, if:

• Your loan was sanctioned before the date of the notification. Only loans sanctioned after that date are eligible.
• Your loan is for a purpose not covered by the scheme and not cleared by the Monitoring Committee through a special addendum.
• Your cumulative borrowing exceeds Rs 5.00 lakh. The excess is outside the scheme.
• You are in default. Interest subsidy is extended only where repayment of instalments of principal and interest as specified by the lending bank is regular.
• You are seeking subsidy on penal interest, which is never considered.
• You borrowed from a lender outside the list of eligible institutions.

An important clarification: the scheme states that all loans for the listed purposes are eligible irrespective of whether the activity was eligible for other subsidies under various Government programmes. So a fisherman who has already taken a capital subsidy on a canoe or an outboard motor is not barred from also taking the interest subsidy on the loan that funded his share.

Which purposes are covered?

The scheme covers agriculture including horticulture, animal husbandry, fisheries, and the processing and marketing of agricultural produce, with a loan component up to Rs 5.00 lakh. Within those sectors it lists:

Agriculture and horticulture; crop loans; medium and long-term loans for fencing of agricultural land; land development; soil and water conservation; purchase of agricultural implements and machinery; establishment of irrigation infrastructure including sprinkler and drip systems; setting up poly houses, shade net units, green houses, plant nurseries, mushroom cultivation, and fruit and vegetable processing units; setting up horticultural orchards; and crop production loans for field and horticultural crops.

Animal husbandry: establishment of modern dairy, poultry, piggery, goat and rabbit rearing units; loans under the Kamdhenu Scheme; milk packaging infrastructure for locally produced milk; and small dairy units set up under schemes of the Goa Co-operative Milk Producers' Union.

Fisheries; purchase of canoes, outboard motors, fishing nets, fish finders and GPS units for fishing vessels; construction of fish holds in vessels; setting up aquaculture farms; mussel farming; aquarium fish farming; drying and processing units; ice plants for fisheries; and repairs and modification of fishing vessels.

Any activity not covered above must be referred to the Monitoring Committee, for which a special addendum is issued with Government approval. The scheme places the responsibility for ensuring that a loan is for a covered purpose on the lending institution, which must furnish a certificate to that effect on its claim.

How to apply for the Goa interest subsidy on farm loans

1. Identify your sector. Agriculture and animal husbandry borrowers take one route; fisheries borrowers take another.
2. If you are in agriculture or animal husbandry, approach the bank directly — a nationalised bank, a scheduled commercial bank, the Goa State Co-operative Bank or a Primary Agricultural Co-operative, with the requisite documentation. Banks sanction the loan as per their usual norms, including the approved scales of finance.
3. If you are in fisheries, apply through the nearest office of the Directorate of Fisheries, indicating your preferred bank. The Directorate scrutinises the application and forwards it to the bank branch within 15 days of receipt.
4. Confirm at sanction that the loan is recorded under the interest subsidy scheme, because the claim is raised by the bank branch and not by you. Ask the branch manager to note it on the sanction letter.
5. Repay every instalment on time. Regular repayment is a condition of the subsidy, not merely of the loan.
6. Check your loan account statement each quarter to confirm that the subsidy released by the Government has actually been credited against your interest.

How is the subsidy released and how do I check it?

Interest subsidy is released on a quarterly basis. Every bank branch sends its consolidated claim, in the prescribed tabular format with the office seal of the bank, to the Director of Agriculture, the Director of Animal Husbandry and Veterinary Services or the Director of Fisheries as the case may be, within one month after each quarter ending June, September, December and March. The concerned Directorate scrutinises and approves the claims, and issues a branch-wise cheque.

The scheme places a specific duty on the Branch Manager to ensure that the released subsidy is credited to the borrower's account, and to submit a certificate to that effect to the Government. That sentence is the borrower's real protection: if your interest is not falling to an effective 4%, the person to ask first is your branch manager, with the quarter in question named.

Implementation is monitored by a State Level Monitoring Committee chaired by the Secretary (Agriculture), with heads of the implementing Departments and senior bank representatives, and the Director of Agriculture as Member Secretary. Both banks and SLMC representatives undertake sample field visits to verify utilisation of the loan and report quarterly.

What happens if I default?

The scheme is explicit. The Government stops releasing subsidy from the month the default takes place, and the bank branch cannot claim interest subsidy for that period. While recovering its dues under its own procedure, the bank must also recover the entire interest subsidy already released by the Government and refund that component to the Government.

There is a recovery path back. If the borrower regularises the loan in the meantime, they become eligible for interest subsidy for the defaulting period as well, but penal interest charged by the bank is not considered for subsidy in any circumstance.

Note also that recovery of the loan is the responsibility of the banks, and there is no Government guarantee for loans provided under this scheme. The State subsidises the price of the credit; it does not stand behind the credit.

Why do borrowers lose the subsidy?

• Irregular repayment, which stops the release from the month of default.
• Loan sanctioned for a purpose outside the listed sectors and not cleared by the Monitoring Committee.
• Loan taken from an institution outside the eligible list.
• Cumulative borrowing crossing Rs 5.00 lakh, taking the excess out of scope.
• Loan sanctioned before the notification date.
• Bank branch failing to raise the quarterly claim in the prescribed format and within one month of the quarter end, a failure the borrower feels but does not cause.
• Monitoring Committee finding the sanction outside scheme parameters, in which case the bank must refund the interest paid by the Government.

Where do I complain?

Take the first complaint to the branch manager, since the duty to credit the subsidy to your loan account sits there. If that does not resolve it, approach the implementing Directorate for your sector, the Directorate of Agriculture, the Directorate of Animal Husbandry and Veterinary Services at Pashusamvardhan Bhavan, Patto, Panaji (0832-2437245, dir-ahvs.goa@nic.in), or the Directorate of Fisheries at Dayanand Bandodkar Marg, Panaji (0832-2224838, dir-fish.goa@nic.in).

The Government of Goa's public grievance registration route at goaonline.gov.in is the escalation path, and the State Level Monitoring Committee is the forum where systemic delays in release are taken up.

Practical points

• Ask for the subsidy at sanction, not afterwards. The bank raises the claim; if the branch has not flagged the loan under the scheme, no claim goes out.
• Fisheries borrowers must not go straight to the bank. Routing through the Directorate of Fisheries is a scheme condition, and the Directorate has a 15-day forwarding obligation you can hold it to.
• The Rs 5.00 lakh ceiling is per beneficiary and cumulative, not per loan. Splitting borrowings across purposes does not raise it.
• Five years is the outer limit even on a ten-year term loan. Plan the later years at the full bank rate.
• Keep repayment regular above everything else. A single default costs not only the future subsidy but the subsidy already received, which the bank must recover from you.