Cabinet Approval for Agriculture Infrastructure Fund

In News

The Union Cabinet approved the ‘Agriculture Infrastructure Fund’, a Central Sector Scheme.

In-Detail

• The Union Cabinet chaired by Shri Narendra Modi had approved a new pan-India Central Sector Scheme named ‘Agriculture Infrastructure Fund’.
• Under the scheme, the banks and financial institutions will provide Rs. One Lakh Crore as loans for developing agriculture infrastructure.
• The loan beneficiaries under the scheme- Primary Agricultural Credit Society (PACS), Marketing Co-operative Societies, Farmers Producers Organizations (FPO), Self Help Group (SHG), Joint Liability Groups (JLG), Multipurpose Cooperative Society, Startups, Agri-entrepreneurs, Farmers, Aggregation Infrastructure Providers and Central/State agency or Local Body sponsored by the Public-Private Partnership Project.
• For the current year Rs. 10,000 crore is sanctioned and Rs. 30,000 crore each for the next three financial years.
• The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme will facility credit guarantee coverage for eligible borrowers, for a loan up to Rs. 2 crore.
• The FPO promotion scheme of the Department of Agriculture, Cooperation and Farmers Welfare (DACFW) provides the credit guarantee for FPOs.
• The total budgetary support outflow by the Government of India is Rs. 10,736 crore.
• The moratorium under this scheme is a minimum of 6 months and a maximum of 2 years.
• The scheme is monitored and managed by an online Management Information Systems (MIS) platform.
• The MIS platform provides benefits such as scheme details, transparency of interest rates, minimum documentation, faster approval process and integration with other schemes.
• To ensure real-time monitoring and effective feed-back the National, State and District level monitoring schemes will be set up.

Features of the Scheme

• The Agriculture Infrastructure Scheme provides a medium-long term debt financing facilities.
• Provides interest subvention and financial support for projects like post-harvest management infrastructure and community farming assets.
• The interest subvention under this scheme is 3% per annum up to limit of Rs 2 crore and for seven years.
• The project provides formal credit to farm and farm processing based activities.
• Provides job opportunities in rural areas.

Conclusion

There is a huge in India’s agriculture infrastructure, be it for pre-harvest or post-harvest activities. Due to the lack of such infrastructure, Indian farmers are unable to increase their yields and are losing their produce. The new scheme is set to augment agri-infrastructure and a dedicated fund means results will be achieved soon.