Cabinet approves establishment of Animal Husbandry Infrastructure Development Fund

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New Delhi: The Union Cabinet chaired by Prime Minister Narendra Modi met today and took several landmark decisions, including the establishment of Animal Husbandry Infrastructure Development Fund.

This will go a long way providing a much-needed boost to infrastructure across sectors, which are crucial in the time of COVID pandemic.

In pursuance of recently announced Atma Nirbhar Bharat Abhiyan stimulus package, Cabinet today approved setting up of Animal Husbandry Infrastructure Development Fund (AHIDF) amounting to Rs. 15000 crore.

The government had earlier approved the Dairy Infrastructure Development Fund (DIDF) worth Rs. 10,000 crores for incentivizing investment by the cooperative sector for the development of dairy infrastructure. However, the MSMEs and Private companies also need to be promoted and incentivized for their participation in processing and value addition infrastructure in the animal husbandry sector.

The AHIDF approved today would incentive infrastructure investments in dairy, meat processing, and animal feed plants. The eligible beneficiaries under the Scheme would be Farmer Producer Organizations (FPOs), MSMEs, Section 8 Companies, Private Companies, and individual entrepreneurs with only a 10% margin money contribution by them. The balance 90% would be the loan component to be made available to them by scheduled banks.

The government of India will provide a 4% interest subvention to eligible beneficiaries from the Aspirational Districts and 3% for beneficiaries from other Districts. There will be 2 years moratorium period for repayment of the loan with 6 years repayment period thereafter. The government of India would also set up a Credit Guarantee Fund of Rs. 750 crore to be managed by NABARD which would provide credit guarantee to the projects which are covered under the MSME defined ceilings. Guarantee Coverage would be up to 25% of the Credit facility of the borrower.

There is huge potential waiting to be unlocked through private sector investment in the animal husbandry sector. The AHIDF with the interest subvention scheme for private investors will ensure the availability of capital to meet upfront investment required for these projects and also help enhance overall returns/ payback 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 a significant direct impact on farmer’s income. The 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. Thus, 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 in inputs thereby driving higher productivity leading to an increase in farmers’ income. The measures approved today through AHIDF would also help in direct and indirect livelihood creation for about 35 lakh persons.

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