Cabinet approves agri fund, rental scheme for migrants
Finance minister Nirmala Sitharaman announced both plans in May as part of the Rs 20 lakh crore economic stimulus and relief package announced by Prime Minister Narendra Modi to fight the slowdown caused by the Covid-19 pandemic and the ensuing lockdown.Updated: Jul 09, 2020 01:20 IST
The cabinet on Wednesday approved an agriculture infrastructure fund worth Rs 1 lakh crore, by far the National Democratic Alliance government’s largest federally funded programme in the farm sector, and green-lighted an affordable rental housing scheme for migrant workers, millions of whom left cities and returned home to the hinterland in the aftermath of the coronavirus disease pandemic and the lockdown imposed to stop its spread.
Finance minister Nirmala Sitharaman announced both plans in May as part of the Rs 20 lakh crore economic stimulus and relief package announced by Prime Minister Narendra Modi to fight the slowdown caused by the Covid-19 pandemic and the ensuing lockdown.
The fund, in the form of special loans with discounted interest rates, is meant for farm entrepreneurs, aggregators of farm produce and for building infrastructure such as refrigerated storage, markets and farm supply chains. The scheme running the fund shall begin in this fiscal year and end in 2029.
While announcing the fund, the finance minister said the loans would benefit private agricultural entrepreneurs and start-ups that aimed to buy the produce of farmers and aim to reach global markets, but which did not have the infrastructure. “This fund will immediately address the issue. It will be created at the earliest,” she said on May 15.
The total credit will be disbursed over four years, starting with an initial sanction of Rs 10,000 crore in the current financial year and Rs. 30,000 crore each in the next three fiscal years.
The Rs 1 lakh crore fund, aimed at boosting farm infrastructure and logistics, will offer medium to long term debt facility for investment in harvest management projects and community farming assets. It will work on a model of discounts on interest along with financial support, a Cabinet note said.
All loans under the fund will have interest discount of 3% per year up to a limit of Rs 2 crore. This benefit of this discount will be available for a maximum period of seven years.
Also, credit guarantee coverage – where loans are underwritten -- will be available for eligible borrowers under the Credit Guarantee Fund Trust for Micro and Small Enterprises scheme for loans up to Rs 2 crore.
The infusion of Rs 1 lakh crore in the rural-agri infrastructure space will generate rural employment and reduce farm wastage, according to Arindam Guha, partner and leader, government and public sector, Deloitte India.
The cabinet also approved the development of affordable rental housing complexes for urban migrant poor as a “sub-scheme” under the Pradhan Mantri Awas Yojana -- Urban (PMAY–U) . Existing vacant government funded housing complexes will be used for the scheme through concession agreements for 25 years.
The housing scheme for urban poor entails a funding of Rs 600 crore, which will be released for projects with innovative technologies for construction. The government hopes the scheme will benefit nearly 300,000 migrant poor.
Existing and vacant government-funded housing complexes will be converted into such complexes. Concessionaires will make the complexes livable by undertaking repair and maintenance and filling gaps in infrastructure including water and drainage connections and roads.
Special incentives such as permission to use existing vacant land, 50% additional Floor Area Ratio or Floor Space Index, concessional loans at priority sector lending rates and tax relief at par with those offered to affordable housing will be given to private and public entities to develop such complexes.
According to internal ministry data accessed by HT, 1.2 million government houses are available; they were built under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), PMAY and housing schemes of state governments. Of these, Maharastra has the maximum number of dwelling units available ( 35,000) and Delhi has 30,000 houses, officials aware of the development said on condition of anonymity.
The Centre will also be issuing model tenancy agreement guidelines which the states can follow, they added .
Millions of migrant workers who either lost their jobs or were concerned about losing their livelihoods left the cities in an exodus to their homes in states such as Bihar, Uttar Pradesh, Odisha, Jharkhand and West Bengal after the post-Covid-19 lockdown’s enforcement on March 25. Many complained that they were under pressure from landlords to vacate their rented houses.
“The Covid-19 pandemic has resulted in massive reverse migration of workers/ urban poor in the country who come from rural areas or small towns for seeking better employment opportunities in urban areas. Usually, these migrants live in slums, informal/ unauthorized colonies or peri-urban areas to save rental charges. They spend a lot of time on roads by walking/ cycling to workplaces, risking their lives to cut on the expenses,” the ministry of housing and urban affairs said in a statement.
“A large part of workforce in manufacturing industries, service providers in hospitality, health, domestic/commercial establishments, and construction or other sectors, labourers, students etc who come from rural areas or small towns seeking better opportunities will be the target beneficiary under affordable rental housing complexes ,” it added.
The affordable rental housing scheme will strengthen the government’s commitment of Housing for All, said