Cabinet nod for Rs 1-lakh crore agricultural infra fund

The Union Cabinet on Wednesday approved the Rs one-lakh crore agriculture infrastructure fund to finance setting up of post-harvest facilities such as cold stores, warehouses, silos for storing food grains in villages across the country.

The fund will be a centrally sponsored scheme under which Rs one lakh crore will be provided by banks and financial institutions as loans to primary agricultural credit societies, marketing cooperative societies, farmer producer organisations, self-help groups, farmers, agri-entrepreneurs and start-ups to build the post harvest management infrastructure.

“Currently, nearly 20% of farm produce is lost after harvest and before reaching the markets. Creating such infrastructure across the country will help farmers to reduce the losses,” Agriculture Minister Narendra Singh Tomar told reporters after the meeting of the Union Cabinet.

The Union Cabinet also approved the PM Garib Kalyan Ann Yojana aimed at distributing free foodgrains to 81 crore beneficiaries till November. The scheme was announced by Prime Minister Narendra Modi in a televised address to the nation on June 30.

On the Agriculture Infrastructure Fund, Tomar said the loans under the new scheme will be disbursed in the span of four years starting with a sanction of Rs 10,000 crore in the current year and Rs 30,000 crore each in the next three financial years.

He said the loans under the new scheme will be disbursed in the span of four years starting with a sanction of Rs 10,000 crore in the current year and Rs 30,000 crore each in the next three financial years.

All loans under this financing facility will have interest subvention of 3% per annum up to a limit of Rs two crore, an official statement said.

The fund would also finance projects to set up assaying, grading and packaging units, e-marketing points linked to e-trading platforms, ripening chambers besides PPP projects for crop aggregation sponsored by central/state/local bodies, Tomar said.

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, an official statement said.

The Agriculture Infrastructure Fund was part of the Rs 20 lakh crore stimulus package announced by the government in response to the Covid-19 disaster.

The 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 Rs two crore.

The total outflow as budgetary support from the Government of India will be Rs 10,736 crore.