NEW DELHI: India’s agriculture minister, Radha Mohan Singh on Wednesday announced the launch of a scheme that aims to provide cheaper loans to startups in the co-operative sector and those having innovative projects costing up to Rs 3 crore.
The ‘Co-operative Enterprise Support and Innovation Scheme’ will be implemented by the National Co-operative Development Corporation (NCDC) and will be linked to its Co-operative Startup and Innovation Fund (CSIF) that has an annual corpus of Rs 100 crore.
“The new scheme aims to encourage newly formed co-operatives to take advantage of innovative ventures, especially by societies having new and innovative ideas,” Singh said after inaugurating the 65th All India Co-operative Week organised by the National Co-operative Union of India (NCUI) here.
Co-operatives operating for at least for one year and having a positive net worth are eligible to avail credit under the scheme for new and innovative project ideas, he said.
The project cost should not exceed Rs 3 crore and there will be two years moratorium on payment of principal amount, he said, adding that the period of moratorium may vary depending on type of project and ability to generate revenue.
As an incentive, the minister said the credit will be provided at 2 per cent less than the applicable interest rate on term loan for the project activities.
The interest rate incentive would be applicable only for timely repayers.
The scheme would be liberal to co-operatives in the north eastern region, those registered and operating in ‘aspirational districts’ identified by think-tank Niti Aayog as well as co-operatives which have 100 per cent women and SC/ST members.
Asserting that the Modi government is strengthening co-operative institutions, Singh said, “We are not just strengthening on paper, but working hard on ground in every state.”
Consequently, the loan amount sanctioned by NCDC has been on the rise since 2014 when the present government came to power. In the previous regime, about Rs 5,000 crore loans were sanctioned annually by NCDC, but it has doubled in the last four years, he said.
NCDC has sanctioned Rs 12,965 crore loans till November 13 of the current fiscal.
While emphasising on the role of co-operatives in achieving the government’s target of doubling farmers income by 2022, the minister called upon all 8 lakh co-operatives to focus on improving their governance and efficiency by computerisation.
Expressing concern over lack of transparency and governance in functioning of co-operatives, NCUI President Chandrapal Singh Yadav said, “It is for this reason many co-operatives are shut. Earlier, 75 per cent of co-operatives were in lending business but now it is only 15-16 per cent. The commercial banks have taken over.”
There is a need to revive closed co-operative units and involve more youth and women, he added.