Working Capital Funding for Farmers under Aatmnirbhar Bharat Package

In the year 2020, Union Finance Minister Nirmala Sitharaman made a significant announcement concerning the Aatmnirbhar Bharat Economic Package’s details with respect to farmers. She announced a Rs. 30,000 crore additional emergency working capital funding for farmers via NABARD.

Amid the Coronavirus crisis, farmers went through bad times and thus, Indian government came up with a robust economic package to support farmers and other small businesses to make them stand on their feet and revive their agricultural work and small businesses respectively. 

Recently, Finance Minister Nirmala Sitharaman analyzed the progress status of three Aatmnirbhar Bharat Packages to uplift the economy hit severely by the COVID-19 pandemic.

Emergency Working Capital Funding for Farmers: Key Highlights

The key highlights of the economic package announcement for farmers concerning additional emergency working capital funding for farmers are mentioned below-

• NABARD will extend further refinance support of Rs. 30,000 crore under the stimulus package for crop loan requirements of Regional Rural Banks and Rural Co-operative Banks. 
• It is over and beyond Rs. 90,000 crore to receive approval by National Bank for Agriculture and Rural Development (Widely recalled as NABARD) via the normal refinance track during this year. 
• This front-loaded refinance facility to 43 Regional Rural Banks, 33 State Co-operative banks, and 351 District Co-operative Banks will be easily available and accessible, based on their lending. 
• One of the significant objectives behind bringing the reformative economic Package for the agricultural domain is to meet post-harvest (Rabi) as well as Kharif requirement in May/June. 
• The Package aims to provide assistance and benefits to around three crore farmers, including small as well as marginal farmers.
• Rs 2 lakh crore concessional credit facility will be extended to lend support to 2.5 crore farmers through Kisan credit cards.

Economic Reforms for Farmers under Aatmnirbhar Bharat Package: Progress Status

• Rs. 25,000 crores has been dispensed to farmers from the special facility of emergency working capital funding for farmers under Aatmnirbhar Bharat Package.
• The remaining balance amount of Rs. 5000 crore under Special Liquidity Facility granted to National Bank for Agriculture and Rural Development (NABARD) by Reserve Bank of India & NBFC- MFIs.
• Under this special facility of working capital funding for farmers, out of Rs. 5000  crore, National Bank for Agriculture and Rural Development has sanctioned and dispensed Rs. 767 crore and Rs. 650 crore respectively.

Throwing Light on the Progress of Few Popular Running Schemes of Aatmnirbhar Bharat Packages

After concluding proper in-depth review of Aatmnirbhar Bharat Packages, Union FM Nirmala Sitharaman along with the secretaries of several departments/ministries came up with several points.

The significant components of the progress made till now in the implementation parts of the schemes are mentioned below-

Emergency Credit Line Guarantee Scheme

• With an objective to strengthen business sector PAN India, Nirmala Sitharaman has introduced Rs. 3 lakh crore collateral-free automatic loans for MSMEs and other businesses.
• Under an Emergency Credit Line Guarantee Scheme, as on 4^th of December, 2020, as recorded by Public Sector Banks, best 31 NBFCs and 23 Private Sector Banks, extra credit amounting to Rs. 2,05,563 crore has got sanctioned to 80,93,491 borrowers, and an amount of Rs. 1,58,626 crore has been dispensed to 40,49,489 borrowers.
• In addition to this, the amendment in the Emergency Credit Line Guarantee Scheme took place on 26^th of November, 2020 and scheme time period has been extended till 31^st of March, 2021. Besides this, the prescribed turnover limit has been eliminated.
• Thereafter, operational guidelines concerning Emergency Credit Line Guarantee Scheme 2.0 (ECLGS 2.0) got furnished on 26^th of November, 2020.
• It is anticipated that this ECLGS 2.0 scheme would be the pillar behind 45 lakh units as such units will be able to commence their business activity and secure jobs as well.

Partial Credit Guarantee Scheme 2.0

• In order to render top-notch flexibility to state-owned banks, the Indian government has widened the scope of the Rs. 45,000 crore Partial Credit Guarantee Scheme 2.0. 
• As on 4th of December, 2020, Public Sector Banks (PSBs) have given consent to purchase of a portfolio of Rs. 27,794 crore and are right now in the process of approval or negotiations for Rs. 1,400 crores. 
• The timeline for purchase of Commercial Papers (CPs) or bonds has been extended forward till 31st of December, 2020. 

Special Interest Free 50-Year Loans

• There was an announcement regarding special assistance for states, i.e., special interest-free 50-year loans under Aatmnirbhar Bharat Package. Such loans will be granted to states for capital expenditure for Rs. 12,000 crores.
• As reported on 7th of December, 2020, 27 state governments have finished the submission of proposals till now for latest and running capital projects/tasks.
• Till the present time, projects amounting to Rs. 8455.61 crore under first part as well as the second part of the scheme have passed the process of approval and as the first installment; an amount of Rs. 4227.80 crore has been dispensed to the states. 

Scheme of Financing Facility under Agriculture Infrastructure Fund

• Hon’ble Prime Minister Shri Narendra Modi Ji drove the scheme of Financing Facility under Agriculture Infrastructure Fund formally on 9th of August, 2020.
• The Union Cabinet approved the Agri Infrastructure Fund on 8th of July, 2020.
• However, the formal launch took place on the 9th of August, 2020.
• In the time frame of 30 days after the Cabinet lend formal approval to the scheme, the first sanction of Rs. 1,128 crore made to around 2,280 farmer societies.
• Department of Agriculture Cooperation and Farmers Welfare (DAC&FW) have signed Memorandums of Understanding with all 9 Private Sector Banks, 12 Public Sector Banks, as well as 33 Cooperative Banks.

Pradhan Mantri Matsya Sampada Yojana (PMMSY)

• In the previous year, amid COVID-19 outbreak Finance Minister Nirmala Sitharaman allocated Rs. 20,000 crore for enhancing the lives of fishermen under Pradhan Mantri Matsya Sampada Yojana.
• In her announcement, she added that the welfare amount will address significant gaps present in the fisheries value chain and would flourish the lives of 55 lakh people by providing them with employment.
• Under this scheme, fishermen will be able to accelerate their produce.
• The Government granted approval to PMMSY (Expanded as Pradhan Mantri Matsya Sampada Yojana) in May 2020 with an overall investment of Rs. 20,250 crore.
• Operational norms of Pradhan Mantri Matsya Sampada Yojana circulated to States/Union Territories on 24th of June, 2020 along with the five-year target of fish production, first two years indicative financial allocations.
• The response has been deemed as phenomenal as Union Territories/State as the shelf of projects received of Rs. 6,445 crore from 32 Union Territories/States.
• The Fisheries department sanctioned projects of about Rs. 2,182 crore as reported on 9th of December, 2020.
• Another Rs 322 crore for two states along with Phase-2 proposals of seven UTs/States is under process.

Animal Husbandry Infrastructure Development Fund Scheme (AHIDF Scheme)

Hon’ble PM has announced for laying the foundation of Rs. 15000 crore Animal Husbandry Infrastructure Development Fund (AHIDF in short) under the provisions and framework of Aatmnirbhar Bharat Abhiyan stimulus package. The AHIDF^[1] has been approved for boosting investments by individual entrepreneurs, MSME, private firms and corporations, Farmers Producers Organizations (FPOs) as well as Section 8 companies to establish-

• The Cabinet approved theAnimal Husbandry Infrastructure Development FundScheme on 24th of June, 2020. 
• Memorandum of Understanding (MoU) with SIDBI (Small Industries Development Bank of India) was signed on 27th of July, 2020 for online Portal development.
• Around 313 applications have been received as recorded on 9th December 2020, and the same is under process.

Pradhan Mantri Awas Yojana- Urban

• Pradhan Mantri Awas Yojana-Urban is all about providing central assistance to all the states as well as union territories within the geographical boundaries of India, via several agencies, to meet the goals of the Pradhan Mantri Awas Yojana Housing for All scheme of the Indian government.
• In order to give wings to the women empowerment through residential property ownership, there is a necessary provision concerning the female head of the family that she must be the owner or the co-owner of the property constructed under PMAY-Urban.
• In the past course of time, numerous measures have been taken for revival and reconstruction of the Housing & Real Estate Sector.
• The immense contribution of these measures has brought decent recovery in this sector.
• For instance, SWAMIH (Expanded as Special Window for Affordable and Mid-Income Housing) – 135 projects got approved with an outlay of Rs. 13,200 crore.
• It will result in the completion of over 87,000 houses/Flats. Rs 18,000 crore will be granted over the Budget Estimates for 2020-21 for Pradhan Mantri Awas Yojana-Urban via additional allocation as well as Extra Budgetary Resources.
• It is over and beyond Rs 8,000 crore already allocated.

Emergency Working Capital Funding for Farmers through NABARD

• Out of this special facility of emergency working capital funding for farmers, about Rs. 25,000 crore has been disbursed as on 4^th of December, 2020.
• Remaining balance amount of Rs. 5,000 crore under Special Liquidity Facility issued to NABARD by Reserve Bank of India for small-sized NBFCs as well as Non-Banking Financial Companies- Micro-Finance Institutions.
• In addition to this, National Bank for Agriculture and Rural Development had circulated the guidelines on 6^th of October, 2020 to roll out disbursement out of Special Liquidity Facility for smaller Non-Banking Financial Companies &
   NBFC-MFIs. Besides, proposals amounting to Rs. 690 crore have been authorized to 6 NBFCs-Micro-Finance Institutions out of the remaining balance amount of Rs 5,000 crore.
• Till 4^th of December, 2020, disbursement of Rs.130 crore has been achieved.

Rs. 2 Lakh Crore Credit Boost to Farmers through Kisan Credit Cards 

• Under the Ministry of Finance, Department of Financial Services has taken up the special drive to render concessional credit to beneficiaries of PM-Kisan via Kisan Credit Cards. 
• In the first phase, a total number of 58.83 lakh KCC Cards with KCC limit of about Rs. 46,532 crore has been sanctioned. 
• 110.94 lakh KCC with KCC limit of about Rs. 1, 07,417 crores has been sanctioned in the second phase as on 4th of December, 2020. 
• Out of this 110.94 lakh KCC sanctioned in the second phase, 92.40 lakh has been considered for crop loan, 2.73 lakh for crop loan along with AH or fisheries activities, 46,786 for poultry, 4.75 lakh for dairy, cattle as well as sheep rearing, etc.
• 15,037 for fisheries as well as 10.44 lakh cases previously have been KCC sanctioned by the bank.

Aatmnirbhar Bharat Rozgar Yojana

With a mission to drive employment creation in the COVID-19 pandemic-hit economy, Indian FM Nirmala Sitharaman on November 12, 2020, introduced the Aatmnirbhar Bharat Rozgar Yojana. The scheme encompasses subsidies to employers for hiring and bringing new employees on board. Most importantly, it endeavours to help those who lost jobs amid COVID-19 crisis.

The Cabinet lent the much-needed approval to the proposal on December 9, 2020. Guidelines that will be helpful in the implementation of the scheme are being composed.  

What is the Importance of Working Capital in the Sphere of Farming?

The farming industry is considered as an unpredictable one. Farmers have to keep themselves prepared for the uncertainties of the future. Changes in weather would bring disheartening results for the farmers and the entire farming industry. Farmers also face economic hurdles. We can say that stability factor is not present in the lives of farmers.  Farms can’t proceed ahead for reinvesting in their crops without working capital funding for farmers. Thus, farmers would fail to leap ahead for making the payment to their employees. Even making investment in brand-new equipment won’t be a possibility for them.

The survival and recovery of a farm in the hours of darkness are possible due to the working capital loan facility. Most of the farm business struggle to keep up with this buffer despite having ample working capital funding for farmers.  A working capital loan can be essential in accelerating the farming industry.

 The Final Words

In order to enhance the lives of farmers who undergone pain, Union Finance Minister Nirmala Sitharaman announced the Aatmnirbhar Bharat Economic Package last year. She affirmed a Rs. 30,000 crore additional emergency working capital funding for farmers via NABARD. In addition to this, she adopted a comprehensive review method to analyze the implementation part of Aatmnirbhar Bharat Package with Secretaries of different concerned departments.  Our Organization Aatmnirbhar Sena is working in line with all the initiatives and schemes by the government and is proactively fulfilling its responsibilities.