Agriculture Infrastructure Fund

Prime Minister of India has recently launched the financing facility of 1 lakh crore rupees under the Agriculture Infrastructure Fund.

About the Agriculture Infrastructure Fund

• The Union Cabinet had given the approval to this new pan India Central Sector Scheme-Agriculture Infrastructure Fund in July 2020.

Objective

• 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, 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 Group (SHG)
• Farmers, Joint Liability Groups (JLG)
• Multipurpose Cooperative Societies
• Agri-entrepreneurs, Startups
• Aggregation Infrastructure Providers
• Central/State agency or Local Body sponsored Public-Private Partnership Project
• All loans under this financing facility will have interest subvention of 3% per annum up to a limit of Rs. 2 crores.
• 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 2 crores.
• The Fund will be managed and monitored through an online Management Information System (MIS) platform.
• 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 FY2020 to FY2029 (10 years).

Significance

• 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.
• 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.
• It will also help in the faster approval process as also integration with other scheme benefits.

About Central Sector Scheme

• Under Central sector schemes, it is 100% funded by the Union government and implemented by the Central Government machinery.
• Central sector schemes are mainly formulated on subjects from the Union List.
• The Central Ministries also implement some schemes directly in States/UTs which are called Central Sector Schemes but resources under these Schemes are not generally transferred to States.

UPSC