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The main objectives of the scheme include creation of scientific storage capacity with allied facilities
in rural areas to meet the requirements of farmers for storing farm produce, processed farm
produce, consumer articles and agricultural inputs; promotion of grading, standardization and
quality control of agricultural produce to improve their marketability; prevention of distress sale
immediately after harvest, promotion of pledge financing and marketing credit and to strengthen
agricultural marketing infrastructure in the country for the introduction of a national system of
warehouse receipts in respect of agricultural commodities stored in such godowns. However, the
materials used and design of the godown would depend upon the produce proposed to be stored.



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a) The project for construction of rural godowns can be taken up by individuals, farmers, group of
farmers / Growers, Partnership / Proprietary firms, Non-Government Organisations (NGO͛s), Self
Help Groups (SHGs), Companies, Corporations, Co-operatives, Agro-Processing Co-operative
Societies, Agricultural Produce Marketing committees, Marketing Boards and Agro Processing
Corporations in the entire country, Assistance for renovation / expansion of rural godown will
however, be restricted to the godowns constructed by cooperatives only.

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Under the scheme, the entrepreneur will be free to construct godown at any place and of any size as
per his commercial judgement except for the restrictions that it would be outside the limits of
Municipal Corporation area and be of a minimum capacity of 100 MT.

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Subsidy under the scheme is linked to institutional credit and will be available to only such projects
as are financed by commercial banks, cooperative banks, regional rural banks, ADFCs, Scheduled
PCBs, NEDFI and other institutions eligible for refinance from NABARD. Loan to the entrepreneur͛s
from banks for the construction / renovation / expansion of godowns etc. would carry an adequate
long-term repayment period.

Assistance under the scheme shall be available on capital cost of construction of godown only. Banks
will, however, be free to finance, in addition to storage, allied facilities like consumer
shop,Agriclinics, weighing, grading, packaging and qualitycertification, warehousing etc. to meet
various requirements of the farmers.

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A general awareness programme on the scheme for the farmers and a training programme for the
entrepreneur for construction, maintenance and operation of Rural godown will be organised by the
National Institute for Agricultural Marketing, Jaipur (NIAM) and also be eligible under the scheme for
assistance.

V

Subsidy under the scheme shall be provided on the capital cost of the project and the rate of
subsidy shall be as follows:

i) 25% of the capital cost of the project where the beneficiaries are farmers, agri-graduates,
co-operatives, Central/State Ware Housing Corporations;
ii) 15% in case of individuals, Companies & Corporations;
iii) 33.33% In case of North-Eastern States, hilly areas and in cases where the entrepreneur
belongs to SC/ST,
iv) Minimum size of the godown eligible for subsidy would be 100 MTs.
v) Capital cost of the project for the purpose of release of subsidy under the scheme shall be
calculated as follows:

a) For godowns upto 1000 tonnes capacity ± actual cost or Rs.2000 /- per tonne of storage
capacity, whichever is lower.
b) For godowns exceeding 1000 tonnes capacity ± actual cost of Rs.1500/- per tonne of
storage capacity, whichever is lower.
c) For renovation / expansion of godowns constructed by cooperative with the assistance
from NCDC ± actual cost or Rs.500 per tonne of storage capacity whichever is lower.

vi) Amount of subsidy calculated as above shall be further restricted to a maximum storage
capacity of 10,000 MT and further to a maximum amount of Rs.37.50 lakhs for each project.
In the case of, N-E states and hilly areas and for entrepreneurs belonging to SC/ST,
maximum amount of subsidy shall be Rs.50 lakhs for each project. There will, however, be
no such ceiling in respect of renovation / expansion of godowns already constructed by the
cooperatives with assistance from NCDC.

vii) Subsidy for the projects under the scheme shall be released through NABARD for
projects financed by the commercial, cooperative and Regional Rural Banks, ADFCs,
Scheduled PCBs, NEDFI and other institutions eligible for refinance from NABARD and
through NCDC for projects financed by the NCDC.

viii) The capacity of godown shall be calculated @ of 1.8 MT per sq.mt. of floor area with an
average height of not less than 4.50 meters.

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i) 50% of the subsidy amount will be released to NABARD by DAC in advance.

Accordingly, NABARD would release subsidy to the participating banks in advance for
keeping the same in the Subsidy Reserve Fund Account of the concerned Borrower, to be
adjusted finally against loan amount of the bank on completion of the project. This amount of
50% advance subsidy would be released by NABARD to the participating banks on
submission of a project profile cum claim form.

ii) The remaining 50% of the subsidy amount would be disbursed to the participating bank(s)
by NABARD, after conduct of an inspection by the Inspection Committee consisting of
Officials from NABARD, participating banks(s) and DMI in the concerned State.

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Other than Individuals, In North-

north Companies and eastern
easternStates & Corporations in states
hilly areas areas other than NE &Hilly
States/Hilly areas areas *And
for SC/ST
i)**Owner¶s 25% 25% 20%
Contribution
ii) Subsidy from 25% 15% 33.33%
the Govt.
iii) Institutional 50% 65% 46.67%
loan from
Commercial /
coop. Banks etc.

* Where the project site is located at a height of more than 1000 meters above mean sea level.

** Cost of land not exceeding 10% of the project cost can form part of the owner¶s
contribution.

NCDC will follow their existing pattern of assistance.

  



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The eligible financing institutions under the scheme are I) Commercial Banks, Regional Rural banks
(RRBs), State Cooperative Banks (SCBs), State Co-operative Agricultural and Rural Development Bank
(SCARDBs), Agricultural Development Fianance Companies (ADFCs), North Eastern Development
Finance Corporation (NEDFI), and such other institutions which will be eligible for refinance from
NABARD. Ii) Scheduled Primary Urban Cooperative Banks (PUCBS), and Co-operatives where they
seek loan from NCDC.

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i) 50% of the project can be raised as term loan from the financing banks. As the subsidy is back-
ended, eligible amount of the subsidy (25%) would be initially allowed as term loan to the
beneficiary. The repayment schedule will be drawn on the total loan amount (including subsidy) in
such a way that the subsidy amount is adjusted after liquidation of net bank loan (excluding
subsidy).
ii) Repayment period will depend upon the cash flow and will be upto 11 years including a grace
period of one year. The first annual installment will fall due after 23 months from the date of first
disbursement.
iii) Rate of interest to borrowers on term loan shall be as per RBI guidelines. This is applicable form
the date for the first disbursement of loan.
iv) The financial institution may also provide working capital separately for undertaking business by
entrepreneurs.

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A time limit of 15 months is prescribed for completion of the project from the date of sanction by
bank. However, if reasons for delay are justified, a further grace period of 3 months may be allowed
by the participating bank. If the project is not completed within stipulated period, the benefit of
subsidy shall not be available and advance subsidy has to be refunded forthwith.

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a) Interested promoter will submit the project proposal for term loan and subsidy to Bank on
application form as prescribed by the concerned Bank along with project report and other
documents for appraisal and sanction of loan. A copy of the proposal shall also be endorsed by the
promoter to sub office / regional officer of DMI as per list enclosed at annexure VI.

b) Bank after appraisal and sanctioning of project will furnish a brief project profile-cum-claim form
for advance subsidy in the prescribed format given at Annexure-I along with a copy of bank͛s
sanction letter to RO, NABARD with a copy to the sub office / regional office of DMI as per list
enclosed at annexure VI.

c) NABARD on receipt of project profile cum claim form from participating bank will sanction and
release 50% advance subsidy to the participating bank for keeping the same in the Subsidy Reserve
Fund Account (Borrower wise). NABARD will forward a copy of claim form as indicated in annexure I
to Head Office of DMI project-wise for replenishment or adjustment against advance subsidy
provided by DMI to NABARD. The release of subsidy by NABARD will be subject to availability of
funds from DMI.

d) When the project is nearing completion, the promoter will inform the bank who will initiate action
for an inspection by the Inspection Committee consisting of officials from bank, NABARD and DMI to
ensure that the rural godown conforms to technical & financial parameters. After inspection is
conducted, the bank will submit the claim form for final subsidy in the prescribed format given in
annexure II to NABARD, in triplicate, with a copy to Regional office / sub-office, DMI. The inspection
report of committee and completion certificate should be enclosed with claim form for final subsidy
to banks, which will be replenished by DMI or adjusted against the subsidy amount provided to
NABARD in advance.

e) In case of Onion Godowns, NHB has advised that the Joint Monitoring Committee (JMC) for
release of subsidy to onion godowns may consist a representative from National Horticulture
Research and Development Federation (NHRDF). In case NHRDF official is not available, one
representative from concerned State Horticulture/Agriculture Department may be co-opted in
addition to the representative of NHB from the concerned State in the JMC