Cabinet in the statement said, "Government has been implementing several schemes for incentivizing the investment made by dairy cooperative sector for the development of dairy infrastructure. However, the government realizes that even MSMEs and Private companies also need to be promoted and incentivized for their involvement in processing and value addition infrastructure. AHIDF would facilitate much-needed incentivisation of investments in the establishment of such infrastructure for dairy and meat processing and value addition infrastructure and establishment of animal feed plant in the private sector."
Under the new package, minimum 10% margin money contribution would be done by the beneficiaries, while balance 90% would be the loan component to be made available by scheduled banks.
On timely repayment, the government also gives 3% interest subvention to eligible beneficiaries. There will be 2 years moratorium period for the principal loan amount and 6 years repayment period thereafter.
Further, the cabinet has announced to set up Credit Guarantee Fund of Rs750cr which will be managed by NABARD. Cabinet adds credit guarantee would be provided to those sanctioned projects which are covered under MSME defined ceilings. Guarantee Coverage would be up to 25% of Credit facility of the borrower.
Since, almost 50-60% of the final value of dairy output in India flows back to farmers, therefore, Cabinet says, "growth in this sector can have a significant direct impact on farmer’s income. Size of the dairy market and farmers’ realization from milk sales is closely linked with the development of organized off-take by cooperative and private dairies."
Thereby, Cabinet points out investment incentivization in AHIDF would not only leverage 7 times private investment but would also motivate farmers to invest more on inputs thereby driving higher productivity leading to an increase in farmers income. The measures approved would also help in direct and indirect livelihood creation for 35 lakh.