Prime Minister Narendra Modi presiding over a meeting of the Union Cabinet, in New Delhi on July 8, 2020.
Prime Minister Narendra Modi presiding over a meeting of the Union Cabinet, in New Delhi on July 8, 2020.
Business & Economy

Cabinet approves financing facility under 'Agriculture Infrastructure Fund'

NetIndian News Network

New Delhi, July 9, 2020

The Union Cabinet on Wednesday gave its approval to a new pan-India Central Sector Scheme, the Agriculture Infrastructure Fund.

The scheme will 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, an official press release said.

The release said that, under the scheme, Rs one 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 Groups (SHGs), Farmers, Joint Liability Groups (JLGs), Multipurpose Cooperative Societies, Agri-entrepreneurs, Startups, Aggregation Infrastructure Providers and Central/State agency- or Local Body-sponsored Public-Private Partnership 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, the release said.

All loans under this financing facility will have interest subvention of 3% 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 could be availed from the facility created under FPO promotion scheme of Department of Agriculture, Cooperation & Farmers Welfare (DACFW).

The total outflow as budgetary support from the Government will be Rs 10,736 crore.

The moratorium for repayment under this financing facility may vary subject to a minimum of 6 months and a maximum of 2 years.

According to the release, 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.

The 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 a 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.

National-, State- and District-level Monitoring Committees will be set up to ensure real-time monitoring and effective feedback.

The duration of the scheme will be from FY2020 to FY2029 (10 years), the release added.