Agri Business

Capital subsidy schemes to converge with Agri Infra Fund

Our Bureau New Delhi | Updated on November 09, 2020 Published on November 09, 2020

Loans sanctioned under the fund will have interest subvention of 3 per cent per annum up to a limit of ₹2 crore   -  istock/RomoloTavani

To give impetus to agriculture infrastructure projects, the government has decided to allow seamless convergence of capital subsidy schemes of other departments and ministries with those undertaken with the Agriculture Infra Fund, according to officials.

“Those who are availing funding from the ₹1-lakh crore National Agriculture Infra Fund would be able to avail capital subsidies available under existing Central and State government schemes so that they would be able create infrastructure at lowest capital cost,” said Agriculture Ministry officials during an informal interaction last week. They cited the example of Kusum scheme of Ministry of New and Renewable Energy and Gobar-Dhan scheme of the Department of Drinking Water and Sanitation and Agriculture Ministry’s own Sub-Mission on Agricultural Mechanisation as examples.

Banks and FI support

The Ari Infra Fund scheme is planned in a such a way that banks and financial institutions would give ₹1 lakh crore over four years as loans to primary agricultural credit societies (PACS), marketing cooperative societies, farmer producers organisations (FPOs), self-help group (SHG), joint liability groups (JLG), multipurpose cooperative societies, individual farmers, agri-entrepreneurs, start-ups and public private partnership projects sponsored by Central or State agencies and local bodies. Loans sanctioned under the fund will have interest subvention of 3 per cent per annum up to a limit of ₹2 crore. This subvention is available for a maximum period of seven years. The government will stand guarantee for eligible borrowers up to ₹2 crore under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme.

Proposals coming

The Ministry, which has activated the fund soon after it was announced in July this year, has so far received proposals worth more than ₹3,500 crore and they are being processed currently. Loans worth ₹1,566 crore have already been sanctioned to 3,055 PACS by NABARD. The officials said they hope to fund project worth ₹40,000 crore by the next financial year. They said majority of the projects received so far from PACS. So far, the Project Management Unit has received over 9,435 projects of which 9,200 applications worth nearly ₹610 crore are from Andhra Pradesh, they said.

The authorities have received 641 applications from entities other than PACS as well. Of these, 352 projects to the tune of ₹303 crore were found eligible.

Making a departure from the existing practice, the Ministry has signed memoranda of understanding with banks and financial institutions to finance schemes, they said adding that most public and private sector banks, cooperative banks, State cooperative banks and regional rural banks and some non-banking finance companies have already signed up.

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Published on November 09, 2020
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