The interest subsidy on education loans taken up to March 31, 2009, announced by Finance Minister P. Chidambaram in the interim Budget on Monday, follows from the relief announced for student borrowings after April 1, 2009, announced in the Union Budget for 2009-10.

The then Finance Minister, Pranab Mukerjee, announced that the government was taking over the burden of interest for the duration of study and a little beyond.

Mr. Chidambaram said he noticed “a sense of discrimination” among students who had borrowed before March 31, 2009. Not only did such students struggle to pay interest during the period of study but also continued to service the loans. He said the scheme was a popular move and brought “great cheer” to students and their families.

Credit access

The Minister said the increased access of minority communities to credit was an achievement of the UPA government. In the past 10 years, the number of minorities with bank accounts in 121 districts had gone up from 14,15,000 to 43,52,000. The volume of lending to minorities in these districts went up from Rs. 4,000 crore to Rs. 66,500 crore. Loans to minority communities across the country stood at Rs. 211,451 crore at the end of 2013. Data with the Ministry of Minority Affairs show that nearly 50 per cent of the loans had been given to the Muslim community. According to the Sachar Committee report, access to credit for Muslims was deemed as critical since a large proportion of the community was self-employed.

The Prime Minister’s 15-point programme for uplift of minorities mandated that 15 per cent of all priority sector lending should go to minorities.


Student loan burden easesFebruary 17, 2014

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