Hon’ble Finance Minister announced on 15.05.2020 a Rs 1 lakh crore Agri Infrastructure Fund for farm-gate infrastructure for farmers. Accordingly, Central Sector Scheme of Financing Facility under Agriculture Infrastructure Fund was approved by Cabinet on 08.07.2020. 

Features

    • 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.

    • The duration of the Scheme shall be from FY2020 to FY2029 (10 years).

    • Under the scheme, Rs. 1 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 and 

        ◦ Central/State agency or Local Body sponsored Public Private Partnership Project.

    • All loans under this financing facility will have interest subvention (for a maximum period of 7 years) of 3% per annum up to a limit of Rs. 2 crore.

    • Credit guarantee coverage will be available for eligible borrowers from this financing facility under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for a loan up to Rs. 2 crore, the fee for this is paid by the government.

    • Moratorium for repayment under this financing facility may vary subject to minimum of 6 months and maximum of 2 years.

Implementation so far

    • Operational guidelines of the scheme have been circulated to all States/UTs on 17th July, 2020

    • Various meetings to quickly roll out the scheme have been held by DAC&FW with all States/UTs Governments and other stakeholders

    • Memorandum of Understandings (MoUs) with all twelve public sector banks and four private sector banks have been signed by DAC&FW

    • The scheme has been formally launched by Hon’ble Prime Minister of India on 09.08.2020 wherein only 30 days after Cabinet formally approved the scheme, the first in-principle sanction of Rs. 1128 Crore was made to over 2,280 farmer societies by NABARD

    • So far NABARD has received 3055 proposals of PACs through state cooperative banks in 22 states for which in-principle sanction of Rs. 1568 Cr. has been accorded.

(The author is a trainer for Civil Services aspirants. The views expressed here are personal.)