New Scheme for Diary Sector: GoI subsidizes interest rates on working capital
- On May 14, 2020, the Government of India launched a new scheme for the diary sector.
- The scheme has introduced Interest Subvention on Working Capital to support Diary Cooperatives and FPO (Farmer Producer Organization).
- The scheme intends to modernize existing milk processing units.
- It will also enhance the milk processing capacity of the country to 126 lakh litres per day.
- The scheme will provide interest subsidies to the loans that were availed by the banks to the cooperatives and farmer owned milk organizations and companies.
- The scheme will include those loans that were sanctioned between April 1, 2020 and March 31, 2021.
- The scheme has also provided interest subvention of 2% per annum.
- An additional incentive of 2% of interest subvention will be provided if the farmers repay the loans on time.
- The modified scheme is expected to make 100 crores of rupees available in farmers’ hands.
- The scheme is to be implemented by National Dairy Development Board (NDDB).
- The National Dairy Development Board was established through an act of Parliament of India.
- It was founded in 1965.
- The main aim of the board was to spread similar successes as that of the AMUL Cooperative.
- The World Bank assisted the mission.
- It was named “Operation Flood” and lasted for 26 years.