GUIDELINES FOR ADMINISTERING SUBSIDY UNDER
AGRI-CLINICS AGRI-BUSINESS CENTRES SCHEME (ACABCs)
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of Agriculture & Cooperation
Ministry of Agriculture
Government of India
1. Objectives of the scheme
To provide extension and other services to farmers on
To support agriculture development and entrepreneurship:
To promote self-employment
Agri-Clinics: Agri-Clinics are envisaged to
provide expert advice and services to farmers on technology,
cropping practices, protection from pests and diseases,
market trends, prices of various crops in the markets and
also clinical services for animal health, etc. which would
enhance productivity of crops/animals and increased income
2.2 Agri- Business centers:
Business centers are envisaged to provide farm equipments on
hire, sale of inputs and other services.
3.1 The scheme is open to agriculture graduates
/graduates in subjects allied to agriculture like
horticulture, Animal Husbandry, Forestry, Dairy, Veterinary,
Poultry farming and Pisci-culture.
3.2 The subsidy would be admissible only in respect
of agricultural graduates trained under the ACABC
scheme on or after 1st April 2004.
3.3 The agricultural graduates who were trained on or
after 1st April 2004 and had availed of loan earlier for
ACABC project, would also be eligible for subsidy for
expansion / additional to exiting units or for fresh
investments, only if the earlier loan is not closed
3.4 The trained graduates could also undertake group
projects. If the group consists of a total of five more
persons, all except one of them would have to be agriculture
graduates trained under the scheme and the remaining person
could be non-agriculture graduate with experience in
business development and management.
3.5 Delivery of Extension services shall be the main
component of ACABC projects for availing of the
benefit of subsidy under the scheme. Commercial activities
in agriculture and allied sectors may, on a case-by-case
basis, considered as eligible component of ACABC
projects with a view to improve their viability.
States are encouraged to provide information on all
government policies, programs, schemes, etc. to agriprenurs
and also use their services in implementation of extension
activities funded by the Government.
4. Project Cost Ceiling
4.1 The ceiling of project cost for individual
projects will be Rs. 10.00 lakhs. The ceiling of project
cost for group projects would be 10.00 lakhs per trained
graduates, subject to an overall ceiling of Rs. 50.00 lakhs.
Incase of groups having five persons, of which one is
non-agriculture graduate, the ceiling of such group projects
would also be Rs.50.00 lakhs.
5. Linkage with credit:
5.1 Assistance under the scheme would be purely
credit linked and subject to sanction of the project by
Commercial /Cooperative/Regional Rural Banks based on
economic viability and commercial considerations.
5.2 The eligible financial institutions under the
Cooperative Agriculture and Rural Development Banks: and
other institutions, which will be eligible for refinance
5.3 Term Loan
loan would be composite in nature and participating banks
would extend bank loan as per the project cost, which would
be inclusive of subsidy amount eligible, as capital subsidy
is back-ended, but exclusive of margin money as stipulated.
repayment schedules will be drawn on the total amount of the
loan (including subsidy) in such a way that the subsidy
amount is adjusted after liquidation of net bank loan
will depend on the nature of activity and will vary between
5 to 10 years. The repayment period may include a maximum,
grace period of 2 years (to be decided by the financing bank
as per needs of individual projects).
On term loan shall be as per RBI guidelines and
declared policy of the bank in this regard. Interest would
be chargeable on borrower’s accounts as per procedure laid
down by RBI for direct agricultural advances under
priority sector guidelines.
financial institutions may also provide working capital
separately, if needed for the project.
6. Margin Money
In case of
loans up to Rs. 5.00 Lakhs, no margin money is required as
per present norms. The margin money to be contributed by the
general category entrepreneur will be as per prevailing
concessions would be made in respect of SCs/STs,
women and beneficiaries of North-eastern States, Hill areas.
Insuch cases, a maximum of 50% of the margin money
prescribed by banks could be given by NABARD to meet
the shortfall in borrower’s contribution, if the bank is
satisfied that the borrower is unable to meet the margin
money requirements. Such assistance to banks by NABARD
will be without any interest. The banks may, however, levy a
service charge up to 2% per annum from the borrowers.
security for availing the loan will be as per guidelines
issued by RBI from time to time. As most of the eligible
activities pertain to agricultural input supply and services
and the cost of investment will be less than Rs. 25.00 Lakhs
in most cases, the security norms applicable to tiny
industries as prescribed in RBI circular No.
RPCD.PLNFS.BC.65/06/02.31/99-2000 dated 31.03.2000 would be
made applicable to these units. Accordingly, up to a loan
amount of Rs. 5.00 Lakhs, the loans can be secured against
hypothecation of assets created and no further security
would be necessary.
8. Time limit for Completion of the project.
limit for completion of the project would be as envisaged
under the project, subject to maximum of 6 months period
from the date of disbursement of the first installment of
loan by a further period of 6 months, if reasons for delay
are considered justified by the financial institution
the project is not completed within the stipulated period,
benefit of subsidy shall not be available and advance
subsidy placed with the participating bank, if any, will
have to be refunded forthwith to NABARD.
under the scheme may be treated as direct financing to
participating banks will adhere to the norms of appraising
the projects regarding technical feasibility and
participating banks should ensure insurance of the assets
created under the project, wherever required statutorily. If
beneficiary opts to buy insurance on these assets, even if
insurance is not required statutorily, such expenditure
would be eligible component of ACABC project.
signboard displaying “Assisted under the scheme of Agri-Clinics
and Agri-Business centers, Ministry of Agriculture,
Government of India” will be exhibited at the unit.
and post completion inspection of the project shall be
undertaken by the participating bank to verify physical,
financial and operational progress as and when required.
10. Refinance Assistance from NABARD
would provide refinance assistance to commercial banks, RRBs,
SCBs SCARDBs and other such eligible institutions at the
rate of 100% of the amount financed by the banks as term
loan. Rate of interest on refinance will be as decided by
NABARD from time to time.
11.1 Credit linked capital subsidy @ 25% of the
capital cost of the project funded through bank loan
would be eligible. This subsidy would be 33.33% in respect
of candidates belonging to SC, ST, Women and other
disadvantaged sections and those from North-Eastern and Hill
11.2 In addition, full interest subsidy would be
eligible for the first two years of the project.
11.3 In case subsidy of whatever amount is availed of
under any other scheme of Central of State Government,
subsidy will not be admissible under this scheme.
11.4 The benefit of subsidy will be extended only once.
11.5 The capital subsidy will be back_ended with
minimum 3 Years lock-in period.
11.6 The interest subsidy would, however, be
11.7 The capital and interest subsidy would be
admissible only if all repayments till date had been made as
11.8 The capital subsidy will be adjusted against the
last few installments of repayment of bank loan.
11.9 The capital subsidy admissible under the scheme
will be kept in the “subsidy reserve Fund Account”
(Borrower-wise) in the books of the financing bank. No
interest will be charged on this by the bank. In view of
this, for the purposes of changing interest on the loan
component, the subsidy amount should be excluded. The
balance lying to the credit of the “ Subsidy Reserve Fund
Account” will not form part of Demand and Time Liabilities.
11.10 Interest subsidy shall be provided for a period of
First two Years of bank loan sanctioned
as per the net outstanding balance in the account.
11.11 The banks should levy interest on annual basis and
claim interest subsidy accordingly during this period.
11.12 Banks should prescribe interest rates as per
declared policy of the bank, at the time of sanction of the
Procedure for Release of Subsidy.
12.1 The subsidy will be routed through NABARD
by the Department of Agriculture and Cooperation, Government
of India and the amounts will be placed with NABARD in
12.2 For the present, NABARD shall not change
any service charge for handling subsidy under the scheme. If
at a future date, Ministry of Finance approves payment of
service charge to NABARD for handling subsidy under
all the schemes similar to the Agri-Clinics Scheme, the
matter could be revisited on the amount of advance subsidy
placed with them.
12.3 Capital Subsidy
interested Agri-entrepreneur will submit the project
proposal for term loan and subsidy to the bank on an
application form as prescribed by the concerned bank along
with the project report and other documents for appraisal
and sanction of loan.
after sanction of the project and disbursal of first
installment of loan, the project and disbursal of first
installment of loan, will furnish a brief project
profile-cum-claim form for advance subsidy in the
prescribed format (Annexure-I) along with a copy of a
banks sanction letter to RO, NABARD, in the state
where the unit is located.
on receipt of project profile-cum-claim form from the
participating bank will sanction and release 50% advance
subsidy to the participating bank for keeping the same in
the subsidy Reserve Fund A/c (Borrower-wise). The release of
subsidy by NABARD will be subject to availability of
funds from GOI.
the project is nearing completion, the agri-preneur will
inform the participating bank for conducting inspection.
participating bank would conduct inspection on the project
site, within the overall scope of the operational guidelines
of the scheme.
inspection is conducted, the bank will submit the claim for
final capital subsidy in the Prescribed format (Annexure
II & Annexure VII) to NABARD, Regional Office. The
inspection report and completion certificate should be
enclosed with the claim form for final subsidy.
crediting the final installment of subsidy in the reserve
fund of the Borrower, a Utilization Certificate in the
prescribed format (Annexure III) shall be submitted by
the participating bank to NABARD to the effect that
the amount of subsidy received by them has
been fully utilized and adjusted in the books of account of
the project within the overall guidelines of the scheme.
shall release the final subsidy to banks, which will be
replenished by GOI or adjusted against the subsidy amount
provided to NABARD in advance.
would delegate adequate powers to Chief General Managers/In
charges of Regional Offices of NABARD so as to facilitate
expeditious sanction of projects and release of
refinance/subsidy amount under the scheme.
12.4 Interest Subsidy
subsidy would be released to bank(s) after completion of
one year for the first year and after completion of two
years for second year, from the date of first
disbursement, based on rate of interest actually charged by
the bank, on balance outstanding in the account
against principal amount of loan net of capital subsidy
participating bank will claim interest subsidy annually from
NABARD, which was charged to the loanee account and upon
receipt of interest subsidy from NABARD, the bank should
credit the borrowers account with the interest subsidy.
participating bank shall visit the unit on completion of one
year/two years as the case may be, and conduct inspection to
satisfy that unit is physically, financially and
operationally progressing well and submit its report in
prescribed format (Annexure - IV) recommending release
of first/final installment of interest subsidy.
participating banks should prefer claim for interest subsidy
within 90 days, after completion of the stipulated period
together with the certificate/inspection report. The claims
for first/final installment of interest subsidy may be
submitted by Banks on quarterly basis, in the prescribed
release of capital and interest subsidy to the borrower, the
participating bank shall submit a final Utilization
Certificate, in the prescribed format (Annexure - V) to
NABARD to the effect that the amount of subsidy received
by them has been fully utilized and adjusted in the books of
account under the sanctioned terms and conditions of the
project within the overall guidelines of the scheme.
13.1 The participating bank shall do the monitoring of
each project. Review will be undertaken on a monthly basis
by participating bank/NABARD.
may prescribe suitable formats for submission of various
reports by participating banks, taking in to account
reporting requirements of the DAC and subject to
guidance off DAC/Empowered Steering Committee.
13.3 The progress report of the scheme in the
prescribed format (Annexure - VI) shall be sent
to the Department of Agriculture and Cooperation, Government
of India by NABARD on monthly basis, with a copy to
13.4 The scheme of ACABC and the progress there
under shall be reviewed invariably in all District Level
Consultative Committee and State Level Bankers Committee
meetings with a view to sorting problems/issues emerging in
smooth implementation thereof.
General Awareness and Training Programme.
14.1 General Awareness, publicity and training
programmes for eligible candidates and hand holding support
would be undertaken by MANAGE Nodal Training Institutions as
per the scheme.
14.2 MANAGE will be responsible for providing
training to eligible candidates, through its
Nodal institutes and motivating them for setting up
of Agri-Clinics and Agri-Business Centres.
14.3 MANAGE will ensure sponsoring of sufficient
number of cases to the participating banks for financing
under the scheme and arrange to establish required number of
units at ground level, as envisaged, to make the scheme a
15 Empowering Steering Committee
15.1 The following empowered Steering Committee would
take all important decisions within the framework of
approved scheme, for its smooth implementation:
Additional Secretary (Extn.) Member
AS & FA, DAC Member
DDG (Extn.), ICAR Member
ED, NABARD Member
16. Another independent evaluation of the scheme should
be organized two years after implementation of subsidy.
17. Government’s interpretations of these Guidelines
will be final.
18. Government reserves the right to modify, add and
delete any part of the Guideline without assigning any
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