New Delhi, June 24, 2020: The government on Wednesday approved setting up Rs 15,000 crore Animal Husbandry Infrastructure Development Fund (AHIDF) to support private investments in dairy, meat processing and animal feed plants through soft loans.
Though creation of the fund was first announced in the 2018-19 budget, approval of Rs 15,000 crore for this by the Union cabinet on Wednesday is in tune with the Rs 20 lakh crore stimulus package announced by the government last month to help the economy affected by the lockdown due to Covid-19 situation.
Briefing about the Cabinet decision on AHIDF, Union minister for fisheries, animal husbandry and dairying Giriraj Singh said the move would help in increasing milk processing capacity, boost exports, provide interest subvention to beneficiaries and create additional jobs for 35 lakh persons.
The government through this fund will support Farmer Producer Organizations (FPOs), MSMEs and individual entrepreneurs for creating infrastructure in the livestock sector.
Eligible individuals, private companies or FPOs with a contribution of 10% margin money may go for creating necessary infrastructure. The balance 90% would be the loan component to be made available to them.
The government will provide 4% interest subvention to eligible beneficiaries from 115 aspirational districts (backward districts as per socio-economic indicators) and 3% for beneficiaries from other districts. There will be two years of moratorium period for repayment of loan with six years repayment period thereafter.
The AHIDF is in addition to the Dairy Infrastructure Development Fund (DIDF), worth Rs 10,000 crore, which has been operational since 2017-18 for creation of infrastructure exclusively in the dairy sector. The DIDF incentivises investment by the cooperative sector for development of dairy infrastructure.
“For the first time, we will give interest subvention up to 3% to private players for setting up of processing infrastructure for dairy, poultry and meat,” said Singh.
The government will also set up a Credit Guarantee Fund of Rs 750 crore to be managed by NABARD. It will provide credit guarantee to the projects which are covered under the MSME defined ceilings. The guarantee coverage would be upto 25% of the credit facility of borrower according to the reports published in timesofindia.indiatimes.com.
Underlining benefit of the AHIDF, a government statement on the Cabinet decision said the Fund with the interest subvention scheme for private investors will ensure availability of capital to meet upfront investment required for infrastructure projects and also help enhance overall returns/ pay back for investors.
“Such investments in processing and value addition infrastructure by eligible beneficiaries would also promote exports.
Since almost 50-60% of the final value of dairy output in India flows back to farmers, the growth in this sector can have significant direct impact on farmers’ income,” it said.
The government claimed that the investment of Rs 15,000 crores through AHIDF would not only leverage several times more private investment but would also motivate farmers to invest more on inputs thereby driving higher productivity leading to increase in farmers income.
