PM Modi launches Rs 1-lakh-crore agriculture infrastructure fund; over Rs 1,000 crore credit disbursed on day 1

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August 10, 2020 7:15 AM

Under the PM-Kisan, the Centre provides direct income support of Rs 6,000 each in three equal installments per year to 14 crore eligible farmers.

Under the AIF, the Centre will bear about 3% interest subsidy and up to Rs 2 crore credit guarantee to increase the viability of the projects.

Prime minister Narendra Modi on Sunday formally launched the Rs 1-lakh crore Agriculture Infrastructure Fund (AIF) under which agri-entrepreneurs, start-ups, agri-tech players and farmer groups will have access to credit at subsidised interest for building warehouses, cold storages and other facilities to reduce post-harvest losses. Modi also announced release of Rs 17,100 crore to about 8.5 crore farmers under the Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) scheme.

Under the AIF, the Centre will bear about 3% interest subsidy and up to Rs 2 crore credit guarantee to increase the viability of the projects. Already, 11 of the 12 public sector banks have signed memorandum of agreement with the agriculture ministry. The Centre targets to disburse the entire amount of Rs 1 lakh crore in four years for which Rs 10,000 crore has been sanctioned in the current fiscal and Rs 30,000 crore each has been earmarked for next three years. Moratorium for repayment under this financing facility may vary between 6-24 months.

On the first day of the launch of the scheme, over Rs 1,000 crore credit was disbursed to 2,280 farmer societies, the government said in a statement. While farmer producer organisations (FPOs) will avail the credit guarantee facility from the agriculture ministry under the FPO promotion scheme, other eligible borrowers will get it under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for which the government will pay the required fees.

The funds will be provided for setting up of cold stores and chains, warehouses, silos, assaying, grading and packaging units, e-marketing points linked to e-trading platforms and ripening chambers, besides PPP projects for crop aggregation sponsored by central/state/local bodies. Finance minister Nirmala Sitharaman on May 15 had announced creation of the AIF as part of the R 20 lakh crore relief package amid outbreak of Covid 19.

Noting that India is second largest producer of foodgrains in the world, the prime minister said that Indian agriculture has no problem with regard to production. However, there is a major problem on post-harvest wastages, he said, and added that farmers as well as the nation also suffer losses. “While the fund will help create build modern cold storages and cold chain as well as warehouses in villages, it will also provide employment opportunities in rural areas,” Modi said.

He cited the recent amendment in the Essential Commodities Act and said that this would encourage investors and traders to come forward and invest in warehousing sector. As farmers organisations have been demanding roll back of three ordinances, the prime minister assured them that the ordinance on contract farming would help farmers receive prices fixed at the time of sowing of crops and provide relief from any possibility of fall in prices.

Several farmers organisations under the All India Kisan Sangharsh Coordination Committee have demanded the government to withdraw two new ordinances on contract farming and barrier-free inter-state trading and amendment to the EC Act. They organised a nationwide protest on Sunday on these and other demands like loan waiver and guaranteed price.

Modi also said that while the government targets to create 10,000 FPOs, it has also been simultaneously promoting start-ups in the agriculture sector and so far, about 350 such ventures in food processing, artificial intelligence, mechanisation and renewable energy have been supported. He hoped that the ‘kisan rail’ launched recently would prevent distress sales by farmers as it would connect with market.

Under the PM-Kisan, the Centre provides direct income support of Rs 6,000 each in three equal installments per year to 14 crore eligible farmers. The amount is directly transferred into the bank accounts of the beneficiaries after Aadhaar authentication.

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