How to Get Subsidy on Power Tillers

A farmer must know about the financial assistance provided by the government for procurement of agricultural machinery and equipments. The main category of the machinery in agriculture is Tractor and on the secondary is, Power Tiller.  In case of the SC, ST, Small & Marginal Farmers, Women and NE States` beneficiaries, the maximum permissible subsidy per machine/equipment is Rs.50,000 and the Pattern Assistance is 50 percent for the Power Tiller (below 8 BHP) and Rs.75,000 for the 8BHP & above).  Similarly for other beneficiaries, the maximum permissible subsidy per machi9ne is Rs.40,000 and Rs.60,000 respectively with the pattern assistance of 40 percent.

Power tillers, which are essentially mini-tractors with two wheels and rotary tillers, should logically be preferred over tractors by Indian farmers particularly the small and marginal farmers. In Japan, where the average farm size is smaller than India, power tillers are extensively used for paddy cultivation. But this is not the case in India. 

In the beginning of the 2018, the Department of Agriculture & Cooperation, Mechanization & Technology Division at Krishi Bhawan, New Delhi issued the notification 13-10/99-M&T (I&P) to the Secretary, Director, Agriculture of all the states & UTs, MD, All State Agriculture Industrial Corporations and the Director Agriculture Engineering, Government of MP, TN, Chhatisgarh and WB along with the list of power tiller tested by Farm Mechanization Training and Testing Institute. 

The models of power tillers that are complying with the conformity of production (COP) /TA for mass emission of exhaust gases and the requirements under the Central Motor Vehicle Rules (CMVR) as ordered by the Additional Commissioner (M&T). The email is: kalevn2000@yahoo.co.in for further information.  

Permissible procedure for subsidy Inputs for Indian Power Tiller Industry  

Any subsidy provision mandating preference to domestic manufacturers would be WTO incompatible both under Article 3.1(b) of Agreement on Subsidies and Countervailing Measures (ASCM), Article III of General Agreement on Tariff and Trades (GATT), Article 2.1 of Trade-Related Investment Measures (TRIMs).  The Domestic Content Requirement (DCR) is not allowed even under Agreement on Agriculture (AOA). On perusal of the existing WTO jurisprudence (Analytical Index), it would be evident that the benefit of DCR is not available even under domestic support under AOA.  

In the light of above, any subsidy contingent upon DCR, shall not be WTO compliant. Hence other ways of incentivizing the domestic industry say through production subsidy, which can be made available to the producer at the point of sale itself and Excise Duty exemption on assemblies and spare parts can be thought of as an alternative.  

The existing provision of the Sub-Mission on Agricultural Mechanization without any discrimination between the imported and the domestically manufactured power tillers, when the subsidy is provided to the farmers on their purchase, is WTO compatible. The imported and the domestically manufactured power tillers cannot have differential rates of subsidy. 

The Ministry of Agriculture & Farmers Welfare, Department of Agriculture, Cooperation and Farmers Welfare under its different schemes provide financial assistance to the farmers for purchase of power tillers. The domestic power tiller industry can be incentivized through these funds if are made available to the producer/industry at the point of sale itself as production subsidy. This will also benefit the Government as well as the users. Thus, the Government will also be able to regulate the prices of power tillers in the country. 

Commercial Banks currently extend long-term credit for purchase of tractors and other farm machineries as per prevalent norms (11 to 14 percent interest rates) and against security and collateral. However, Banks usually prefer financing equipments that either have multiple utility or demand driven business model or organized dealer and service network, good resale value etc. Only Tractors and Combine Harvesters fit into this. As a result, institutional credit off take is heavily skewed towards tractors and combine harvesters accounting for about 75% of total. Power tillers are multiutility devices which are ideal for small and marginal farms, which account for nearly 86 per cent of total landholdings. Lower rates of interest and easy availability of credit for purchase of power tillers to these small and marginal farmers would be helpful. The Department of Agriculture, Cooperation and Farmers Welfare may take up this issue suitably with the Department of Financial Services for lowering the rates of interest to at least 7% and simplifying the norms for extending institutional credit. 

The list of manufacturers and the models available is given below: 

1. Greaves Cotton Ltd., Chennai TNGreaves - GS 15 DILS15.4

2. Ranipet, TN - GS 14 DI13.3

3. Greaves Cotton Ltd - Bahubali GC 15 DL13.6

4. Southern Agro Engineers Pvt Ltd. - MANAM MCF 12 I12.0

5. Chirag Corporation, Kolkatta, - WBDivya Shakti Power12.6 

6. Sunrise International, Kolkatta - WBSunrise DI13.2

7. Bengal Tools Limited, Kolkatta - WBSHRACHI SF 15DL14.7

8. Shrachi All Rounder11.8

9. Kerala Agro Machinery - ErankulamKAMCO KMB 2009.1

10. KAMCO Super DI12.4

11. VST Tillers Tractors Ltd. - BangaloreMITSUBIHI SHAKTI8.6

12. VST Shakti 130DI12.1

13. VST Shakti 135 DIultra 13.3

14. 135 DI ultra S   12.8

15. VST Shakti 130 DI S12.2

16. VST Shakti VWH 120 variant 8.6

17. Assam Sai Motors Pvt, Kolkatta, - WBRohino 15 DI13.5 

18. Kubota Agricultural Machinery India Pvt  - KUBOTA PE M 140 13.2

19. Kirloskar Oil Engines Pvt Ltd., Pune Kirloskar - KMTN Moga T15  15.8

20. Samyak Motors Pvt Ltd.,  - Samyak ST 96012.2

21. Indtec Electro Control Punjab - Kranti IND 1812.6

22. George Maijo Industries, Chennai - TNDF AMGC13.7

23. Indra Marshal Power Pvt. Ltd, - MPIndra Marshal14.1

The Ministry of Agriculture & Farmers Welfare, Department of Agriculture, Cooperation and Farmers Welfare under its different schemes provide financial assistance to the farmers for purchase of power tillers. The domestic power tiller industry can be incentivized through these funds if are made available to the producer/industry at the point of sale itself as production subsidy. This will also benefit the Government as well as the users. Thus, the Government will also be able to regulate the prices of power tillers in the country. 

Commercial Banks currently extend long-term credit for purchase of tractors and other farm machineries as per prevalent norms (11 to 14 percent interest rates) and against security and collateral. However, Banks usually prefer financing equipments that either have multiple utility or demand driven business model or organized dealer and service network, good resale value etc. Only Tractors and Combine Harvesters fit into this. As a result, institutional credit off take is heavily skewed towards tractors and combine harvesters accounting for about 75% of total. Power tillers are multi-utility devices which are ideal for small and marginal farms, which account for nearly 86 per cent of total landholdings. Lower rates of interest and easy availability of credit for purchase of power tillers to these small and marginal farmers would be helpful. The Department of Agriculture, Cooperation and Farmers Welfare may take up this issue suitably with the Department of Financial Services for lowering the rates of interest to at least 7% and simplifying the norms for extending institutional credit. The Interested can apply with the following documents: 

To apply for subsidy download form, from the link below: www.krishijagran.com/media/8779/power-tiller-tractor-subsidy-form.docx

List of documents required for different categories of Agricultural loan schemes 

1. Common requirements: 

a. KYC documents for identification. 

b. Stamp size/Passport size photographs of the borrowers in duplicate. 

c. Cropping pattern. 

d. Copies of land records regarding lands owned/leased as certified by revenue authorities.  

e. Latest land tax paid receipts are to be produced for verification.  

f. Original/certified copies of the title deeds and other required documents to satisfy that the applicant is the true and legal owner of the land whenever landed property is offered as security/where developments are proposed and that it is free from encumbrance.

g. Project report to be produced wherever applicable. h. Proforma invoice / invoice should be submitted wherever applicable.  

2. Other specific requirements:

a. Farm development loan: 

b. Whenever construction is involved estimates, layout plan approvals are to be submitted. 

c. Valuation certificate of the land from a competent authority/approved valuer. 

ii) Crop /plantation loan for Coffee/Cardamom a. Original Coffee/Cardamom Registration Certificate (CRC/CDRC.)  

iii) Plantation/horticulture loan: 

1. Latest Agricultural Income Tax and Wealth Tax Assessment Order/returns filed. 

2. Audited Balance sheets for three years and latest ITAO/WTAO if loan is above Rs.10 lakhs 

iv) Pump set loan 

1. Feasibility certificate from the electricity board wherever applicable.  

2. Water rights certificate from competent authority in case of public source of water. 

3. Proforma invoice / invoice showing the prices separately for each item.\ 

4. Water yield certificate from Dept. of Mines & Geology, Ground Water Directorate in respect of bore well drilled. 

v) Farm machinery loan-Tractors/Power tillers/Combine harvestors  

1. Proforma invoice for the farm machinery proposed to be purchased in duplicate.  

vi) ALLHV 

1. Proforma invoice in duplicate  

2. Valid permit to run the vehicle in respect of heavy vehicles a) Medium & heavy vehicle-valid permit to run the vehicle in respect of heavy vehicles.  

viii) Drip/Sprinkler irrigation loan:  

1. Proforma invoice with Technical report containing layout plan from the dealer 

ix) Loan for sheep/goat farming:  

1. A certificate from Dept of Animal Husbandry/Forest Department recommending goat rearing in the area.  

x) Marine Fisheries loan: a. Copy of license/inspection certificate issued by port authority of the area. 

1. Copy of Registration certificate issued by Marine Products Export Development Authority (MPEDA) and from Fisheries Department.  

2. Proforma invoice/Estimate of the Boat to be purchased/constructed  

xi) Deep sea fishing Vessel loan a. Estimates/quotation of the vessel to be acquired.  

1. Design of the vessel. 

2. Project report giving full details of description of vessel, method of fishing, assumptions made while working out the economics etc. 

3. Necessary permission from appropriate authorities whenever vessels are to be imported. In respect of fishing vessels of above 20 meters in length, letter of permission from ministry of agriculture should be submitted. In other cases, necessary permission from appropriate authorities to be submitted.  

xii) Inland fisheries loan: a. Estimate/invoice of the works to be done 

xiii) Agri Clinic and Agri Business Scheme: 

1. Valuation certificate of the land from competent authority/approved valuer. 

2. Wherever construction is involved, estimates, layout plan approvals (wherever necessary) are to be submitted.  

3. Proforma invoice for machinery / equipment / vehicles to be purchased. 

4. Copy of Degree Certificate / marks card as a proof of being a graduate in Agricultural Science e. Copy of the project report.  

xiv) Krishi Mitra Card: a. Crops cultivated /proposed to be cultivated by the tenant farmer and nature of tenancy etc, to be submitted by the farmer.  

xv) Land purchase Scheme  

1. Documents of title and other relevant documents in respect of presently held landed property as well as lands to be purchased.  

2. Copy of sale agreement if entered into or offer letter by the vendor. xvi) Loan for Poultry, Duck rearing:  

3. Proforma invoice for purchase of Equipments, cages, birds 

4. Plan and Estimate for construction of building xvii) Bio gas plant loan: 

5. Technical feasibility report from KVIC/KVIB/BDO/Dept. of Agriculture 

6. Quotation for gas holder from approved fabricator/supplier xviii) Estate Purchase loan/ Purchase of land for Agricultural purpose 

7. Documents of title and other relevant documents in respect of presently held landed property as well as lands to be purchased. b. Copy of sale agreement if entered into.  

8. The valuation reports from the panel valuer / technical consultant for both estate to be purchased and collateral security of existing immovable’s offered.  

9. Crop history of the estate to be purchased as well as existing estates. 

10. If the repayment of loan is to be made out of the other sources of income, supporting documentary proof of the same is to be furnished. 

11. Tax assessment orders and copies of the tax returns filed indicating financial position.  

12. Audited Balance Sheet for the last 3 years. 

13. Original registration certificate in respect of coffee/tea/rubber /cardamom Estates.  

xix) Scheme for redemption of debts of farmers from non-institutional sourcesa.  

A declaration indicating the source (name and address), amount of debt, date of creation of debt and other relevant details certified by Gram Panchayat Member / reputed existing customer of the Branch/ President or Secretary of a reputed NGO operating in the Block / office bearers of the Farmers' Clubs promoted by the branch. 

1. An undertaking that no borrowing would be made from Non institutional sources during the pendency of loan, in case loan is permitted.  

2. In cases where the land is not mortgaged, copy of available title deeds in duplicate to be submitted.  

xx)SHG loans:  

1. Credit plan  

2. Resolution of the group members (Annexure 45) 

Financial assistance by State Bank of India 

Who is eligible? 

Individual Farmers or a group of not more than 3 farmers owning 2 acres of perennially irrigated land (contiguous / nearby) or corresponding acreage of other lands. 

Financing models: 

Bank will finance only for those models of power tillers which have completed the commercial test from organizations viz. Central Farm Machinery Training and Testing Institute (CFMTTI) Budni (Madhya Pradesh) or Farm Machinery Training and Testing Institute (FMTTI), Hissar. 

Loan amount: 

Up to 90 % on the total cost of power tiller plus accessories. 

Security: 

1. For loans up to Rs.1,00,000/- 

Hypothecation of Power tiller, accessories, implements and trailer purchased out of Banks finance. 

2. For loans above Rs.1,00,000 and up to Rs.2.00 lacs : 

Hypothecation of Power tiller, accessories, implements and trailer purchased out of Banks finance and mortgage on land/ One third party guarantee, good for the amount involved or any other acceptable collateral security like NSCs, Banks own term deposits, Kisan Vikas Patras, Indra Vikas Patras, gold, urban property, surrender value of LIC Policy; the value of it should be at least 50% of the loan amount. 

1. For loans above Rs.2.00 lacs : 

Hypothecation of Power tiller, accessories, implements and trailer purchased out of Banks finance and mortgage of land. 

How to repay the loan: 

Repayment will be half yearly/ yearly installments with the Maximum 9 years, with one year as gestation period. 

To apply for the loan: you may contact SBI’s nearest branch or talk to the marketing officers visiting your village.