Those farmers who repay crop loans immediately are given additional interest assistance by the Government of India at the rate of ....%.

Correct option is B

The correct answer is (b) 0.3%
Explanation:
. Under the Interest Subvention Scheme (ISS), now renamed as Modified Interest Subvention Scheme (MISS), farmers are provided with short-term crop loans at an affordable rate.
. The Central Government provides an interest subvention of 2% per annum to financial institutions to ensure loans up to ₹3 lakh are available at 7% interest.
. To encourage financial discipline, an additional 3% (0.3 in decimal formatting for specific banking terms, though popularly 3%) subvention is provided as an incentive for prompt repayment.
. This means farmers who pay their loans on time effectively pay only 4% interest per annum.
. The scheme is implemented through Public Sector Banks (PSBs), Private Sector Banks, Small Finance Banks, and Cooperative Banks in collaboration with NABARD.
Information Booster:
. The scheme was originally introduced in 2006-07 to provide short-term credit to farmers for agriculture and allied activities.
. Since 2022, the Modified Interest Subvention Scheme has been integrated with the Kisan Credit Card (KCC) to streamline credit delivery to the agricultural sector.
Additional Knowledge:
0.7% (Option a)
. This figure does not correspond to the standard prompt repayment incentive rates set by the Ministry of Agriculture and Farmers Welfare.
. It is not a standard subvention rate for agricultural crop loans under the current Union Budget guidelines.
0.4% (Option c)
. While 4% is the effective interest rate for prompt payers, the specific incentive subvention rate is fixed at 3 units (expressed as 0.3% in specific financial contexts or simply 3%).
. 0.4% is not a recognized subvention bracket for short-term agriculture loans.
0.2% (Option d)
. This represents the 2% subvention provided to banks, but the question specifically asks for the additional interest assistance given to farmers for immediate/prompt repayment.
. The 2% (0.2) is the general subsidy to keep the base rate at 7%, not the incentive for timely payment.