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The National Bank for Agriculture and Rural Development (NABARD) has unveiled plans to inaugurate a Rs.1,000-crore fund aimed at bolstering technology-driven agricultural startups and rural enterprises. This initiative, disclosed by Shaji K.V. on Monday, seeks to address the challenges faced by startups in scaling up operations due to limited access to equity and debt instruments, while also fostering new linkages within the rural ecosystem.
Support for Technology-Driven Startups
Shaji K.V. highlighted the significance of enabling startups with the requisite technology and machinery, emphasizing the need for diverse activities to facilitate their growth. He underscored the importance of startups being equipped with the necessary skills to utilize financial resources effectively, particularly for production activities such as processing. NABARD aims to incubate such startups through the allocation of a Rs.750-crore fund, with an additional Rs.1,000 crore earmarked for this purpose.
Government Initiatives and Collaborations
While acknowledging the government’s efforts in various agricultural schemes and funds, Shaji K.V. emphasized the necessity to channel funds towards new players introducing innovative technologies. The government’s plans for a blended capital fund, announced in the FY23 budget, aim to support startups in the agricultural and rural enterprise sectors. Additionally, the agriculture ministry has been driving the ‘Innovation and Agri-Entrepreneurship Development’ program under the Rashtriya Krishi Vikas Yojana since 2018-19, offering financial and technical assistance to nurture the startup ecosystem.
Addressing Regional Disparities in Credit Distribution
K.V. addressed the disparities in agricultural credit distribution, particularly favoring southern regions over eastern and central India. To mitigate this issue, proposals include introducing collateral in the form of social guarantees or a guarantee fund to facilitate increased lending by banks in less-favored regions.
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Statistical Insights
Data from the Union Agriculture Ministry revealed significant disparities in agricultural credit disbursal, with five southern states receiving a disproportionate share despite accounting for a smaller gross cropped area compared to northern states. Despite these challenges, the agricultural credit disbursement targets for FY23 and FY24 have been surpassed, indicating a positive trend in credit availability.
