Capital Investment Subsidy Scheme for Bamboo

Capital Investment Subsidy Scheme for Bamboo Industry

Capital Investment Subsidy Scheme for Bamboo Industry

India has a huge untapped potential in the bamboo sector, yielding an income of more than Rs.30,000 Crores. The National Bamboo Mission was launched as a centrally sponsored scheme to strengthen the domestic cultivation of more than 136 varieties of bamboo species spread across the country and boost the income of the farmers and other stakeholders involved in the sector. The capital investment scheme is launched to provide a credit link facility to bamboo farmers through Financial Institutions and support various activities carried out under the National Bamboo Mission. The scheme encourages the farmers and entrepreneurs in the bamboo sector to submit their project proposals to the eligible banks and obtain subsidy.

Types of Assistances

The nature of assistance that is extended under the scheme are as follows:

Subsidy in Advance

The State Level Bamboo Development Agency releases 50% of the grant amount to the eligible financial institutions as an advance after reviewing the project scrutiny note/ claim form as per the requirement and norms of the National Bamboo Mission (NBM). It is retained in a Subsidy Reserve fund Account of the respective debtors and adjusted against the loan amount of the banks at the end of the repayment duration and on timely completion of the project.

Final Instalment of Subsidy

The State Level Bamboo Development Agency disburses the outstanding grant amount of 50% to the eligible financial institutions after conducting an inspection and recommendation of the project by the Joint Monitoring Inspection Committee. The Committee includes representatives from banks and State and District Level Bamboo Development Agency.

Settling Subsidy to Debtor’s Account

The grant disbursed to the financial institutions is maintained separately in an individual borrower-wise account. The adjustment towards grant is back-ended. The agency releases the cost of completed projects, including the grant amount and excluding the beneficiary’s contribution amount, as a credit by the banks. The repayment schedule would be drawn on the loan amount in such a way that the total subsidy amount is adjusted after the complete bank loan element with interest is settled.

Utilisation Certificate

The financing institutions must submit utilisation Certificate after the disbursal of the final instalment of subsidy. It must certify that the complete amount of grant obtained for the project is utilised and adjusted in the books of Account under the approved terms and conditions of the project and comprehensive guidelines of the scheme.

Interest-free Subsidy

The agency releases grant to the financial institutions on the principle of providing interest-free subsidy to the stakeholders. The financial banks may charge interest on the entire loan amount of the project, but the subsidy amount should be excluded from the loop. The creditor balance of the Subsidy Reserve Fund account will not form part of demand and time liabilities for the purpose of SLR/CRR.

Funding Pattern

The funding pattern of the scheme as laid out by the Ministry is as follows:

  • The farmers or the entrepreneurs involved in the bamboo sectors should contribute 10% of the total project cost.
  • The Ministry of Agriculture & Farmers Welfare, Government of India, disburses 50% of the total project cost in the form of subsidy to the general states and 10% to the NER states.
  • The remaining 40% is obtained in the form of bank loans.

Sanction of Project and Disbursement of Subsidy

The projects under the scheme are supported and assisted with subsidies through banks and the procedure followed by the financial institutions is as follows:

  • The beneficiaries must present the project proposal for term loan and subsidy to the concerned banks, along with the application form as suggested by the respective banks, project report and other documents for evaluation and approval of the loan.
  • Financial Institutions inspect and evaluate the submitted proposals and forward a brief project profile cum claim form to the District Level Bamboo Development Agency to seek out the advance subsidy.
  • The loan amount is released to the beneficiaries only after the clearance and approval of the project by the State Level Bamboo Development Agency and a representative of the financial institutions.
  • The District Level Bamboo Development Agency reviews the project profile cum claim form submitted by the financial institution and suggests the proposals to the State Level Bamboo Development Agency.
  • The State Level Bamboo Development Agency inspects and approves for the release of 50% of advance subsidy to the concerned financial institution to be reserved in the Subsidy Reserve Fund Account.
  • At the near end of the completion of the project, the beneficiaries should intimate the respective banks about the progress.
  • The committee representatives, comprising of bank representatives, officials from the District and State Level Development Agency, would then arrange for an inspection and ensure that the projects are in progress as per the technical and financial guidelines framed.
  • The bank submits the claim form, inspection and approval report of the Committee and completion certificate to State Level Bamboo Development Agency through District Level Bamboo Development Agency for the receipt of final subsidy.

Eligible Financial Institutions

The financial institutions which are identified as eligible under the scheme are as follows:

  • Commercial Banks, Regional Rural Banks (RRBs), State Cooperative Banks (SCBs), State Co-operative Agricultural and Rural Development Banks (SCARDBs), Primary Urban Co-operative Banks(PUCBs), Agricultural Development Finance Companies (ADFCs), North-Eastern Development Finance Corporation (NEDFi) and such other financial institutions.
  • Other Cooperative corporations that are looking out for credit facilities from National Cooperatives Development Corporation (NCDC).

Other Terms & Conditions

  • The farmers and entrepreneurs from the bamboo sector can obtain 50% of the total project cost as a loan from the financial institutions.
  • The 25% of the subsidy amount is disbursed initially to the beneficiaries in the form of credit.
  • The financial institutions may offer working capital to the entrepreneurs separately for initiation of new business.
  • The Rate of Interest (ROI), scale of financing and Security changes as per the norms notified by the RBI.
  • The repayment duration of the credit depends upon the cash flow, and it may normally take 8 years with one year as a grace period.
  • In case of incompletion of the project within the stipulated 8 years, the beneficiaries wouldn’t be able to get benefits out of the subsidy.
  • In such a case, the beneficiaries should refund the advance subsidy amount within the six months after the duration of the 8 years.

Contact Details

Entrepreneurs can approach the National Bamboo Mission in the below-mentioned address:

Additional Secretary, National Bamboo Mission, Ministry of Agriculture & Farmers Welfare, Government of India, Krishi Bhawan, New Delhi-110001.

Entrepreneurs in states Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Sikkim, Telangana, Tripura, Uttarakhand, Uttar Pradesh can approach their respective state offices to avail this subsidy scheme.

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