Subsidy for Agriclinics, Loan for Agribusiness Centres

Introduction to a subsidy for agriclinics, agribusiness centers

Agri-clinics and its uses: Agri-Clinics are foreseen to offer proficient advice and facilities to farmers on many facets to improve the output of crops/animals thereby increase farmer income. Agri-Clinics deliver sustenance in the following areas:

• Soil health
• Cropping practices
• Plant protection
• Crop insurance
• Post-harvest technology
• Clinical services provided for animals, their feed, and management
• Charges of several crops in the marketplace, etc.

Now let us look into the subsidy component of agriclinics.

A guide to a subsidy for agriclinics, agribusiness centers

Agribusiness Centres: Agri-Business Centres are profit-making units of agri-ventures familiar to proficient agriculture professionals. Such undertakings usually include maintenance and practice hiring of farming equipment, sale of inputs, and other services in agriculture and alliances, including post-harvest management and market relations for revenue generation and entrepreneurship expansion.

Eligibility for applying to the subsidies for agri-clinics and agribusiness

Below is the list of eligible candidates’ criteria for the subsidies:

1. Graduates with their major subject as agriculture or associated subjects from SAUs/ Central Agricultural Universities/ Universities recognized by ICAR/ UGC. A degree in Agriculture and related subjects offered by other organizations are also considered but are subject to the approval of the Department of Agriculture and Cooperation, Government of India majorly on the recommendation of the State Government.
2. A diploma having a minimum of 50% marks or Post Graduate Diploma in Agriculture should be there and it should be associated with subjects from the State Agricultural Universities or the State Agriculture as well as Allied Departments along with the State Department of Technical Education in Agricultural sector.
3. A Diploma in Agriculture and related subjects offered by other organizations is also considered subject to the approval of the Department of Agriculture & Cooperation, Government of India on the reference of the State Government.
4. Biological Science Graduates having their masters in Agriculture & allied subjects.
5. Degree courses recognized by UGC having greater than 60 percent of the course content in Agriculture and related streams.
6. Diploma/Post-graduate Diploma courses with greater than 60 percent of course content in Agriculture and allied topics, after B.Sc. with Biological Sciences, from recognized colleges and universities.
7. Agriculture-related courses at intermediate (i.e. plus two) level, with a minimum of 55% marks.

Project cost ceiling

The ceiling of the plan price for individual projects will be around Rs. 10.00 lakhs. The ceiling of project cost for group plans is estimated to be 10.00 lakhs per expert graduates, subject to an overall ceiling of Rs. 50.00 lakhs. In the case of groups having a number of people to 5, of which one is a non-farming graduate, the ceiling of such group projects would sum to around Rs.50.00 lakhs.

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Eligible financial institutions under the scheme

These include the below list of the banks or institutions-

• Commercial Banks
• Regional Rural Banks
• State Cooperative Banks
• State Cooperative Agriculture and Rural Development Banks
• Such other institutions, which will be eligible for refinancing from NABARD

Loans, repayment period, and rate of interest

The word loan would be complex in nature and the contributing banks would extend bank loan as per the plan price, which would be inclusive of subsidy amount eligible, as capital subsidy is back-ended, but the elite of margin money as specified. The repayment schedules will be drained on the total amount of the loan (including subsidy) in such a way that the subsidy amount is accustomed after the liquidation of the net bank loan (excluding subsidy).

The repayment Period will depend on the nature of the activity and will differ between 5-10 years. The repayment term may include a maximum, grace period of 2 years (to be decided by the financing bank as per needs of individual projects).

The rate of Interest on the term loan will be as per RBI guidelines and declared bank policies in this regard. Interest is chargeable on borrower’s accounts as per the process placed down by RBI for direct agricultural advances under priority segment rules. The financial organizations may also deliver working capital separately, in case if required for the project.

Security deposit for the loan

The security for seeking the loan will be as per RBI guidelines which are amended from time to time. As most of the eligible happenings relate to agricultural input supply and services and the capital price investment will be lower than Rs. 25.00 Lakhs in utmost cases, the security standards applicable to small industries as prescribed in RBI circular No. RPCD.PLNFS.BC.65/06/02.31/99-2000 dated 31.03.2000 are pertinent to these units. Accordingly, up to a loan amount of Rs. 5.00 Lakhs, the loans can be secured against hypothecation of possessions created and no need for any additional security.

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List of subsidies available for agriclinics and agribusiness units

• Credit linked capital subsidy at 25% of the capital price of the plan funded through bank loan would be eligible. This subsidy would be around 33.33% to candidates belonging to SC, ST, Women, and other disadvantaged segments and those from North-Eastern and Hill States.
• In accumulation, a full interest subsidy will be eligible for the first two years of the plan.
• In case subsidy of whatever price is availed of under any other scheme of Central of State Government, the subsidy will not be permissible under this scheme.
• The benefit of subsidy will be stretched only once.
• The interest subsidy is mostly concurrent.
• The capital and interest subsidy would be allowable only if all repayments till date had been made as per schedule.
• The capital subsidy will be attuned against the last few installments of repayment of bank loans.
• The capital subsidy admissible under the scheme will be reserved in the “subsidy reserve Fund Account” (Borrower-wise) in the records of the bank which is the financer. No interest will be charged on this by the bank. In view of this, for the resolutions of changing interest on the loan component, the subsidy amount should be excluded.
• Interest subsidy shall be provided for the First two Years of bank loan sanctioned as per the net outstanding balance in the account.
• The banks should levy interest on an annual basis and claim interest subsidy accordingly during this period.
• Banks should prescribe interest rates as per the declared policy of the bank, at the time of sanctioning of the loan amount.

Procedure for release of subsidy for agriclinics

The subsidy will be transmitted through NABARD by the Department of Agriculture and Cooperation, Government of India, and the expanses will be placed with NABARD in advance.

Currently, NABARD will not charge any service charge for managing the subsidy under the scheme. In the future, if the Ministry of Finance supports the payment of service charge to NABARD for handling subsidy which is similar to the Agri-Clinics Scheme, the problem could be revisited on the amount of advance subsidy agreed with them.

Interest on subsidy for agriclinics

• Interest subsidy will be released to the bank(s) after accomplishment of a year for the first year and after the end of two years for the second year, from the date of initial pay-out, based on the rate of interest actually which has been charged by the bank, on balance outstanding in the account against the principal sum of loan net of capital subsidy is released.
• The contributing bank will assert interest subsidy annually from NABARD, which was indicted to the loan account and upon receipt of interest subsidy from NABARD, the bank should credit the borrower’s account with the interest subsidy.
• The contributing bank shall visit the entity on completion of one year/two years as the case may be, and conduct inspection to satisfy that unit is stable in terms of finance, physical set up, and operational progress and must submit its report in the prescribed format (Annexure-IV) recommending the release of first/final installment of interest subsidy.
• The contributing banks should prefer to claim for interest subsidy within 90 days, after accomplishment of the stipulated term together with the certificate/inspection statement. The claims for the first/final installment of interest subsidy may be submitted by banks on a quarterly basis, in the approved format.
• After the release of capital and interest subsidy to the borrower, the contributing bank shall submit a final Utilization Certificate, in the prescribed layout (Annexure – V) to NABARD to the effect that the subsidy price acknowledged by them has been fully utilized and adjusted in the records under the sanctioned terms and conditions of the plan within the overall rules of the scheme.

That’s all folks about subsidy for agriclinics and agribusiness centers in India.  

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