: Provide level playing field to AgriNBFCs in Budget 202122: NAFA #FinanceIndia #StockMarketNEWS Provide level playing field to Agri-NBFCs in Budget 2021-22: NAFA New Delhi, Jan 28 (KNN) Netafim Agricultural

@StockMarketNEWS Thu 28 Jan, 2021

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Provide level playing field to AgriNBFCs in Budget 202122: NAFA #FinanceIndia #StockMarketNEWS
Provide level playing field to Agri-NBFCs in Budget 2021-22: NAFA New Delhi, Jan 28 (KNN) Netafim Agricultural Financing Agency (NAFA), CEO, Prabhat Chaturvedi has urged the government to provide a level playing field to Agri-NBFCs in the upcoming Budget 2021-22.

He said that agriculture and allied activities employ more than 50 per cent of the workforce and yet remain largely unorganized and fragmented. Even after showing the silver lining during the gruelling economic slowdown induced by an unforeseen pandemic, the Indian agribusiness is not flourishing to its full capacity.

He further said that lack of knowledge about the advantages of modern and scientific agricultural practices, and depleting natural resources, are adding to the distress in the sector.

The Government of India has taken multiple measures to bring radical and profound changes to the sector, but the reality remains that change is coming at a much slower rate than required, especially when it comes to farmers receiving adequate credit. Agriculture requires substantial capital commitment, as procurement of equipment remains a major spend for most farmers, but most of the agricultural credit extended to farmers is of a working capital nature (in front of Kisan Credit Cards), said Chaturvedi.

In this regard, Chaturvedi demands the followings to consider in the upcoming budget:

Inclusion of NBFCs for interest subsidy on agriculture loans:

For enabling Agri-NBFCs to emerge as a significant contributor in financing the entire value chain of agriculture, the budget should ensure that Agri-NBFCs are included in the major Government subsidy schemes and programs, a benefit hitherto available only to the Banks. This will bring about certainty and predictability in the business of rural lending and make the system transparent in terms of policy implementation. Additionally, customer benefits will also significantly increase. The government statistics suggest that more than 85% of the farmers are small & marginal with < 2 ha of land and have <30% access to formal credit. To ease the access of credit and support the government’s ambition of financial inclusion, Agri-NBFCs has played a pivotal role by offering access to financing at attractive and competitive commercial terms for farming equipment and machinery. However, these NBFCs have traditionally been excluded from the purview of government subsidy schemes.

Credit Guarantee Scheme for adopting micro-irrigation:

Credit guarantees are one of a pool of instruments for risk mitigation and credit enhancement measures. Addressing the inherent volatility in agricultural business, the creation of a credit guarantee corpus, using a blend of structured finance instruments such as subordination and portfolio concentration limits, would address the new and changing needs of Agri-NBFCs.