The Union Cabinet chaired by the Prime Minister Narendra Modi today has given its approval to a new pan India Central Sector Scheme-Agriculture Infrastructure Fund. The scheme shall provide a medium – long term debt financing facility for investment in viable projects for post-harvest management infrastructure and community farming assets through interest subvention and financial support.
Under the scheme, Rs 1 lakh crore will be provided by banks and financial institutions as loans to Primary Agricultural Credit Societies (PACS), Marketing Cooperative Societies, Farmer Producers Organizations (FPOs), Self Help Group (SHG), Farmers, Joint Liability Groups (JLG), Multipurpose Cooperative Societies, Agri-entrepreneurs, Startups, Aggregation Infrastructure Providers and Central/State agency or Local Body sponsored Public-Private Partnership (PPP) Project.
Loans will be disbursed in four years starting with the sanction of Rs 10,000 crore in the current year and Rs 30,000 crore each in the next three financial years.
Also Read: Himanshu Goyal – How AI helps agriculture in India survive critical weather
All loans under this financing facility will have interest subvention of three percent per annum up to a limit of Rs 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 the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for a loan up to Rs 2 crore. The fee for this coverage will be paid by the government. In the case of FPOs, the credit guarantee may be availed from the facility created under FPO promotion scheme of the Department of Agriculture, Cooperation & Farmers Welfare (DACFW).
The total outflow as budgetary support from the Government of India will be Rs 10,736 crore. Moratorium for repayment under this financing facility may vary subject to a minimum of six months and maximum of two years.
The project by way of facilitating formal credit to farm and farm processing-based activities is expected to create numerous job opportunities in rural areas.
Also Read: Telangana’s agriculture sector all set to serve amidst COVID-19 crisis
Agri Infra fund will be managed and monitored through an online Management Information System (MIS) platform. It will enable all the qualified entities to apply for the loan under the fund. The online platform will also provide benefits such as transparency of interest rates offered by multiple banks, scheme details including interest subvention and credit guarantee offered, minimum documentation, faster approval process as also integration with other scheme benefits.
The national, state and district level monitoring committees will be set up to ensure real-time monitoring and effective feedback. The duration of the scheme shall be from FY 2020 to FY 2029 (10 years).