Economy

Cabinet approves setting up ₹1 lakh-cr agri infra fund

Our Bureau New Delhi | Updated on July 08, 2020 Published on July 08, 2020

NGOs, and charitable organisations have been permitted to purchase one to 10 tonnes of foodgrains from the 2,000-odd FCI godowns   -  G Ramakrishna

The Union Cabinet on Wednesday approved a ₹1-lakh crore Central government sponsored scheme to provide medium-to-long term debt financing facility for investment to build post-harvest management infrastructure and community farming assets through interest subvention, financial support and moratorium on repayment.

Under the scheme, ₹1 lakh crore will be provided by banks and financial institutions as loans to primary agricultural credit societies (PACS), marketing cooperative societies, farmer producers organisations (FPOs), self help group (SHG), farmers, agri-entrepreneurs and start-ups to set up warehouses, cold storage, cold chains, godowns, silos, grading and assaying facilities.

“Currently nearly 20 per cent of agricultural produce is lost in post-harvest losses. Creating such infrastructure across the country would help farmers cut down the loses, said Agriculture Minister Narendra Singh Tomar, who along with Information and Broadcasting Minister Prakash Javadekar, briefed the media about decisions taken at the Cabinet meeting.

An official statement issued by the government subsequently said, loans will be disbursed in four years starting with sanction of ₹10,000 crore in the current year and ₹30,000 crore each in next three financial years.

Interest subvention

All loans under this financing facility will have interest subvention of 3 per cent per annum up to a limit of ₹2 crore. This subvention will be available for a maximum period of seven years. Further, credit guarantee coverage will be available for eligible borrowers from this financing facility under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for a loan up to ₹2 crore.

The fee for this coverage will be paid by the Centre. In case of FPOs, the credit guarantee may be availed from the facility created under FPO promotion scheme of Department of Agriculture, Cooperation & Farmers Welfare, it said.

The total budgetary outflow for the fund from the government is estimated to be ₹10,736 crore. Moratorium for repayment under this financing facility may vary from a minimum of 6 months to a maximum of 2 years.

Affordable rental houses

In another major decision, the Cabinet decided to develop affordable rental housing complexes (ARHCs) for migrants and the poor as a sub-scheme under PM Awas Yojana – Urban. Apart from converting existing vacant housing complexes into ARHCs through concession agreements for 25 years, private and public entities will be allowed to build such complexes with 50 per cent higher floor area ratio, and using concessional loan at priority sector lending rate and with other tax relief. According to Javadekar there are as many 1.08 lakh PMAY flats vacant in 106 cities/towns in the country.

The Cabinet also approved the earlier-announced extension of PM Garib Kalyan Yojana till November, extended the time to get free LPG cylinders under Ujjwala scheme till September and decided to provide 24 per cent EPF contribution to small industries with less than 100 staff for additional three months.

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Published on July 08, 2020
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