GOVERNMENT SUBSIDY SCHEME- MILKING MACHINE/BULK MILK COOLER UNIT

Government Subsidy scheme on milking machines /milk testers/bulk milk cooling units (upto 5000 ltr capacity)

Establish Unit Purchase-of milking machines /milk testers/bulk milk cooling units (upto 5000 lit capacity)

Subsidy 

Per Unit Rs 20.0 lakh maximum

25% of the project cost (33.33 % for SC -/ ST farmers) as back ended capital subsidy. subject to a ceiling of Rs.5.0 lakhs (Rs.6.67 lakhs for SC/ST farmers) or actual whichever is lower. 

Eligible Beneficiaries:

i) Farmers, Individual Entrepreneurs and Groups of Unorganized and Organized Sector. Group of organized sector, includes Self-Help Groups on behalf of their members, Dairy Cooperative Societies, Milk unions on behalf of their members, Milk federation, Panchayati Raj lnstitutions (PRls) etc.are eligible under the scheme.

ii) An applicant will be eligible to avail assistance for all components under the scheme but only once for each component.  However, more than one member of a family can be assisted under the scheme provided they set up separate units with separate infrastructure at different locations. The distance between the boundaries of two such farms should be at least 500 m.

iii) Priority shall be given to projects being implemented in a cluster mode covering dairy farmers/women in SHGs, Cooperatives and Producer Companies including creation of facilities of processing, value addition and marketing of milk produced in the cluster

Pattern of Assistance:

a) Back ended capital subsidy @ 25% of the project cost for general category and @ 33 % for St & SC farmers.
b) Entrepreneur contribution (Margin) for loans beyond Rs.1 lakh* -10% of  project cost minimum.

Financial Institutions: 
 Eligible for re-finance under the scheme.

a. Commercial Banks
b. Regional, Rural and urban Banks
C. State Cooperative Banks
a. State Cooperative Agriculture and Rural Development Banks: and
e. Such other institutions, which are eligible for refinance from NABARD  Linkage with credit

Sanction of project by banks (Financial Institutions):

 The entrepreneurs will prepare a project as per norms of the scheme and submit to the Bank for sanction of the project. The bank shall appraise the project as per the administrative approval issued by DADF from time to time and if found eligible, sanction the total outlay excluding the margin, as a bank loan. The loan amount shall be disbursed in suitable installments depending on the progress of the unit. After the disbursement of the first installment of the loan, the financial institution /bank shall apply to the concerned Regional Office of NABARD for sanction and release of subsidy amount.
All the financing banks shall be required to forward their subsidy claims through their controlling office to the concerned NABARD Regional Office within two months of disbursement of first installment of the bank loan.

Rate of lnterest : 

Applicable on the loan amount under the scheme Rate of interest on loans shall be as per banking guidelinies and the declared policy of the  concerned bank. The bank may charge interest on the entire loan amount, until the subsidy portion is received; and from the date of the receipt of the subsidy, interest shall be charged only on the effective bank loan portion i.e. bank loan minus subsidy.

Time limit for Completion of the project : 

Time limit for completion of the project (except for calf rearing units where disbursements are expected to continue upto two years) would be as envisaged under the project, subject to a maximum period of 9 months from the date of disbursement of the first installment of loan.
 This maximum period may be extended by 3 months in cases where justification provided by the beneficiary is found adequate by the financing bank.
ln case, the project is not completed within the stipulated period, benefit of subsidy will  not be available; the advance subsidy placed with the participating bank.

Security/Surety:

Security for availing the loan be as per the guidelines issued by RBI from time to time.  The beneficiary contribution of 10% shall not be required for loans less than Rs.1 Iakh or any amount as specified in the RBl guidelines, as revised from time to time

Repayment:

Repayment Period will vary between 3-7 years depending on the nature of the activity and cash flow. Moratorium/ Grace period may range from 3 to 6 months in case of dairy farms to 3 years for calf rearing units to be decided by the financing bank as per as needs of individual project.
The recovery of the loan will be based on the net loan amount only. Subsidy shall be adjusted by the concerns bank after the net bank loan (Bank loan minus subsidy) and interest thereon has been repaid.
Repayment Schedules shall be drawn on the total bank loan taken in a manner that the subsidy amount is adjusted after liquidation of the net bank loan (excluding subsidy).

Adjustment of subsidy: 

 Capital subsidy will be back ended (adjusted againist last few installments of repayment of the bank loan) with a minimum lock-in period of 3 years, and. shall be refunded if the account becomes a Non Performing Account (NPA).