Sri. Abhijeet Laxman Mahadik, 

 Newazi, Sangli dist, Maharashtra



Sri. Bhalarao Ramchandra Dhordira, 

Vasmar, Hingoli dist, Maharashtra



Sri.Kandula Narasi Reddy,

Kurnool, Andhra Pradesh








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 Department of Agriculture & Cooperation

Ministry of Agriculture

Government of India


1.           Objectives of the scheme

  • To provide extension and other services to farmers on payment basis:

  • To support agriculture development and entrepreneurship:

  • To promote self-employment


2.           Concept/Definition


2.1    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 to farmers.


 2.2        Agri- Business centers:           Agri- Business centers are envisaged to provide farm equipments on hire, sale of inputs and other services.


3.           Eligibility


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 prematurely.


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.


3.6        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 scheme are;

(a)   Commercial Banks

(b)   Regional Rural Banks

(c)   State Cooperative Banks

(d)   State Cooperative Agriculture and Rural Development Banks: and

(e)   Such other institutions, which will be eligible for refinance from NABARD.


5.3        Term Loan


(a)   The term 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.

(b)   The 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 (excluding subsidy).

(c)   Repayment Period 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).

(d)   Rate of Interest 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.

(e)    The 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 norms.


However, 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.


7.           Security


The 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.


(a)    Time 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 concerned.

(b)    If 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.


9.       Other Conditions


(a)     Projects under the scheme may be treated as direct financing to agriculture.

(b)     The participating banks will adhere to the norms of appraising the projects regarding technical feasibility and commercial/financial viability.

(c)     The 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.

(d)     A 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.

(e)     Pre 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


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.        Subsidy


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 States.


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 concurrent.


11.7      The capital and interest subsidy would be admissible only if all repayments till date had been made as per schedule.


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 loan amount.


12.        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 advance.


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


(a)     An 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.


(b)     Bank, 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.


(c)     NABARD, 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.


(d)      When the project is nearing completion, the agri-preneur will inform the participating bank for conducting inspection.


(e)      The participating bank would conduct inspection on the project site, within the overall scope of the operational guidelines of the scheme.


(f)       After 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.


(g)       After 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.


(h)       NABARD shall release the final subsidy to banks, which will be replenished by GOI or adjusted against the subsidy amount provided to NABARD in advance.


(i)        NABARD 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


(a)        Interest 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 released.


(b)        The 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.


(c)        The 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.


(d)        The 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 format.


(e)        After 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.          Monitoring


13.1      The participating bank shall do the monitoring of each project. Review will be undertaken on a monthly basis by participating bank/NABARD.


13.2     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 MANAGE.


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.


14.        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 success.


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:

Secretary (A&C)                                                Chairman

Additional Secretary (Extn.)                           Member

AS & FA, DAC                                                       Member

DDG (Extn.), ICAR                                              Member

DG, MANAGE,                                                       Member

ED, NABARD                                                         Member

JS (EXTN.)                                                            Member Secretary

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 reason therefore.




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