Cabinet approves Central Sector Scheme of financing facility under ‘Agriculture Infrastructure Fund’

The Union Cabinet chaired by the Prime Minister Narendra Modi approved a new pan India Central Sector Scheme under Agriculture Infrastructure Fund. The main objective of the scheme is to 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.

Key Highlights

• The loans dispersed under the financing facility will carry interest subvention of 3 percent per annum up to a limit of Rs 2 crore. The interest subvention will be available for a maximum of seven years.
• The credit guarantee coverage will be provided to 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 the credit coverage will be paid by the central government.
• In the case of Farmer Producer Organizations, the credit guarantee can be availed from the facility set up under the FPO promotion scheme of the Department of Agriculture, Cooperation & Farmers Welfare (DACFW).
• The total budgetary support from the central government will amount to Rs 10, 736 crores.
• The moratorium period for the repayment of the loan under this facility will vary subject to a minimum of 6 months and a maximum of 2 years.

Significance

• The project by facilitating formal credit to farm and farm processing-based activities will create more job opportunities in rural areas.

Other Details

• The Agriculture Infrastructure Fund will be managed and monitored through an online Management Information System (MIS) platform.
• It will require qualified entities to apply for the loan under the fund. It will provide benefits such as transparency of interest rates offered by multiple banks, interest subvention and credit guarantee offered, minimum documentation and faster approval process along with integration with other scheme benefits.
• The centre will set up national, state and district-level monitoring committees to ensure real-time monitoring and effective feed-back of the scheme.
• The scheme has been launched for a period fo 10 years from FY2020-FY2029.

UPSC