/startuppedia/media/media_files/ogkw0sg87LfXfhO7SYBp.png)
Union Agriculture Minister of India - Shivraj Singh Chouhan
On Tuesday, the Union Agriculture Minister of India, Shivraj Singh Chouhan, introduced two initiatives — a fund aimed at promoting farm-sector startups and a single-window portal to process investments — as part of Prime Minister Narendra Modi-led third-term government policies to augment the country’s farm economy.
AgriSure & Krishi Nivesh Nidhi - 2 Solid Supports for Agri Startups
Chouhan had announced a ₹750-crore fund called AgriSure to support agri startups and a portal called Krishi Nivesh Nidhi to speedily clear project proposals to help boost farm incomes. The minister mentioned this at an event held in Delhi attended by bankers, investors, and startup incubators.
“The agriculture sector is the backbone of the Indian economy, and farmers are its soul. Agriculture has a share of 16% of the country’s GDP. The farmer is the biggest producer as well as consumer,” the Union Agriculture Minister has remarked.
Awards for Banks: Recognition & Encouragement
In the event, the Minister also awarded scheduled banks based on credit disbursals under the government’s agriculture infrastructure fund, which finances rural assets. State Bank of India, the country’s largest lender, received the first prize, followed by HDFC Bank, which came second, and Canara Bank was awarded the third prize.
Chouhan also added that the Narendra Modi government aims to double farmers’ incomes, and to attain that mission, the government has adopted a six-pronged strategy. The Minister elaborated that the six strategies are - increasing output, lowering input costs, ensuring profitable prices, crop diversification, natural farming, and value addition to crops.
AgriSure - A Blended Capital Fund
AgriSure is a blended capital fund, with an equal contribution of ₹250 crore each from the Department of Agriculture and NABARD, the state-owned rural development bank. Besides that, an extra amount of ₹250 crore will be raised through financial institutions. The fund will be managed by a wholly-owned subsidiary of NABARD called NabVentures.
Chouhan also mentioned that several programmes have been launched to transform agriculture, including improvised storage and processing to cut down post-harvest losses. In the event, he emphasized that the agriculture infrastructure fund had so far been able to mobilize projects worth ₹78,000 crores with financing worth ₹45,000 crores.
A Dream Come True for Agri Startups
The ₹1-lakh crore fund aims at creating durable farm assets, from warehouses to processing plants. The fund can also be used by agricultural produce marketing committees for buying and selling farm produce to enhance upmarket facilities.
The fund that aims to provide medium-to-long-term debt financing for investments in rural projects was launched as part of the ₹20-lakh crore first stimulus package during the Covid-19 crisis.
The financing facility issues loans on easy terms that add up to ₹1 lakh crore over four years, beginning with a sanction of ₹10,000 crore for 2020-21 and ₹30,000 crore each for the next three financial years.
Borrowers will get an interest subvention in which part of the interest would be paid by the government, of 3% per annum up to a loan limit of ₹2 crore for seven years.