As a major step in agricultural reforms, the union cabinet under the chairmanship of PM Modi had approved the new central scheme- Agriculture Infrastructure Fund on July 8, 2020.
The major objective of the government launched scheme is to uplift the agricultural sector by providing a long-term-medium debt financing facility for the investment in projects for post-harvest management infrastructure and community farming assets through interest subvention and financial support.
The scheme comes with a limited time duration as well as a prescribed mode for the loan distribution. The total outflow in the scheme as budgetary support from the Indian government will be Rs. 10,736 crores.
What is the significance of the Agriculture Infrastructure Fund?
The Agriculture Infrastructure Fund approved by the central government will facilitate formal credit to farm and farm processing- based activities which in return is expected to create several job opportunities in the rural areas.
How the loan will be disbursed under the scheme?
The disbursal of the loan will be in four years which will start with the sanction of Rs. 10,000 crores in 2020 while Rs. 30,000 crores each in the next 3 financial years.
Under Agriculture Infrastructure Fund, Rs. One lakh crores will be provided by the financial institutions and banks as loans to Marketing Cooperative Society, Primary Agricultural Credit Societies, Self-Help Groups, Farmer Producers Organisation, Joint Liability groups, Startups, Agri-entrepreneurs, Multipurpose Cooperative Societies, State/central agency or local body sponsored Public-Private Partnership, and Aggregation Infrastructure Providers.
Interest subvention on loan under the scheme: Key Details
• All the loans under the facility will have an interest subvention of 3% per annum upto a limit of Rs. 2 crores.
• The subvention will only be available for a maximum period of 7 years.
• The credit guarantee coverage will be available only for the eligible borrowers from this facility under the Credit Guarantee Fund Trust for Micro and Small Enterprises scheme- CGTMSE for a loan of upto Rs. 2 crores.
• The fee for this credit coverage will be paid by the central government.
• In the case of FPO’s, the credit guarantee scheme can be availed from the facility which is created under the Department of Agriculture, Cooperation and Farmer Welfare’s FPO Promotion Scheme.
Moratorium for repayment under the scheme:
The moratorium for repayment under the government’s financing facility varies subject to a minimum of 6 months and a maximum of 2 years.
Duration of the scheme:
The duration of the government launched the Agriculture Infrastructure Fund scheme will be for 10 years from Financial Year 2020 to Financial Year 2029.
How the Agriculture Infrastructure Fund will be managed and monitored?
It will be monitored and managed through an online Management Information System-MIS platform. It will enable all the qualified organisations or entities to apply for the loan under the fund.
Apart from this, the online platform will also be providing benefits such as minimum documentation, transparency of interest rates that are offered by multiple banks, scheme details which will include credit guarantee offered and interest subvention, fast approval process as also integration with other scheme benefits.
Also, the National, State, and District Level Committee will be set up in order to ensure real-time monitoring and effective feedback.
Comments
All Comments (0)
Join the conversation