Modi’s New Cabinet Focuses on Agriculture; Approves the Modifications in Agriculture Infrastructure Fund

The revamped Union cabinet announced major decisions after its first meeting on July 8, 2021 in the agriculture sector. The cabinet has approved some changes in the central sector scheme of financing facility under ‘Agriculture Infrastructure Fund’. 

The modifications in the scheme will help in generating investments while ensuring that the benefits reach small and marginal farmers. 

The modifications are as follows: 

• The eligibility has now been extended to state agencies/APMCs, national & state federations of cooperatives, federations of farmer’s producer organizations (FPOs) and Federations of self help Groups (SHGs).

• Presently, Interest subvention for a loan upto Rs.2 crores in a single location is eligible under the scheme. In case, one eligible entity puts up projects in different locations then all such projects will be now eligible for interest subvention for a loan of upto Rs.2 crore. However, for a private sector entity, there will be a limit of a maximum of 25 projects. This limitation is not applicable to state agencies, national and state federations of cooperatives, federations of FPOs and federation of SHGs. 

• This limitation of 25 projects will not be applicable to state agencies, national and state federations of cooperatives, federations of FPOs and federation of SHGs. Location will mean physical boundary of a village or town having a distinct LGD (Local Government Directory) code. Each of such projects should be in a location having a separate LGD code.  

• For APMCs, interest subvention for a loan upto Rs crore will be provided for each project of different infrastructure types g cold storage, sorting, grading and assaying units, silos within same market yard. 

• The period of financial facility has been extended from 4 to 6 years upto  2025-26 and overall period of the scheme has been extended from 10-13 upto 2032-33 

The power has been delegated to Narendra Singh Tomar to make necessary changes with regard to addition or deletion of beneficiary in such a manner so that the basic spirit of the scheme is not altered. 

What is Agriculture Infrastructure Fund?

Agriculture Infrastructure fund was first approved by union cabinet in July 2020. It aimed 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 report. The duration of this scheme shall be from FY 2020 to FY 2029.