Thursday, July 20 2006 17:46 Hrs (IST) - World Time -

New Delhi: The Government today (July 20, 2006) liberalized the scheme for strengthening Agriculture Marketing Infrastructure by allowing state agencies to utilise their funds for the purpose instead of relying on bank credit.

Under the existing guidelines for the Central Scheme on Development/Strengthening of Agricultural Marketing Infrastructure, Grading and Standardisation, assistance under the scheme was credit linked.

Assistance for the scheme under the existing guideline is credit linked and subject to sanction of infrastructure project by the specified banks based on economic viability and commercial considerations.

Under the revised guidelines, State Government Agricultural Marketing Board/State Agencies would be permitted to utilise their funds in lieu of bank loans for financing projects under the scheme, Information and Broadcasting Minister P R Dasmunsi told reporters after the meeting of the Cabinet Committee on Economic Affairs.

It also decided to allow projects located in Hill States of Uttaranchal, Himachal Pradesh and Jammu and Kashmir to be eligible for higher subsidies admissible for Hill Areas irrespective of the altitude at which a project may be located.

Hilly area is defined as land situated 1000 metres above mean sea level.

Under the existing guidelines, the rate of subsidy stands at 25 per cent of the capital cost of the project.

But for North Eastern States, hilly areas, tribal areas and to entrepreneurs belonging to SC and STs and their cooperatives, the rate of subsidy is 33.33 per cent of the capital cost of the project.

With this approval, state agencies will be better enabled to take up infrastructure projects from their own funds by dovetailing the subsidy under the scheme, without borrowing from the financial institution, Dasmunsi said.

He said J&K, Himachal Pradesh and Uttaranchal will been titled to higher subsidy in the on-going scheme for taking up marketing infrastructure projects at all places irrespective of altitude.

This would benefit producers at higher altitudes who market their produce from projects located at lower altitude.