NABARD Scheme Update: A Boom for Warehousing Sector

We bring you fantastic news for the Warehousing Sector, specifically for Agriculture-Based Godowns. NABARD (National Bank for Agriculture and Rural Development) has introduced a crucial modification to its Subsidy Scheme for Warehousing Projects. This amendment, effective from November 10, 2024, has a significant impact on the subsidy component and benefits eligible applicants.

Let’s explore the details of this scheme and how it can enhance your subsidy for Warehousing Projects.

Key Update in NABARD Scheme :

As per the recent notification, revised guidelines are applicable to all term loans sanctioned after November 10, 2024. The changes focus on increasing the permissible cost of construction for subsidy calculations, addressing inflation and the rising cost of construction.

Revised Permissible Cost of Construction :

Earlier, the permissible cost of construction for subsidy calculations was capped at ₹3,000 per metric ton (MT). This limit has now been doubled to ₹6,000 per MT. Here’s how this change translates into subsidy benefits:

For a godown with a capacity of 5,000 MT, the permissible project cost increases from ₹1.5 crore to ₹3 crore.
The subsidy calculation remains at 33% of the cost for female entrepreneurs and 25% for other cases, but now applies to the revised cost cap.
This means the subsidy amount for a 5,000 MT godown increases from ₹50 lakh to ₹1 crore.

Compliance with WDRA Norms :

To avail of the subsidy, it is essential to construct godowns in compliance with WDRA (Warehousing Development and Regulatory Authority) norms. These norms ensure:

High-quality construction.
Proper storage conditions for agricultural produce.

Why the Change?

NABARD’s decision to increase the permissible cost reflects its consideration of:

Escalating construction costs due to inflation.
Additional costs incurred for building WDRA-compliant godowns.

Additional Benefits :

Apart from the NABARD subsidy, you can also leverage the Agriculture Infrastructure Fund (AIF) for additional financial support. Key benefits under AIF include:

3% interest subvention on term loans.
Loans up to ₹2 crore for eligible projects.

Who Can Benefit?

This scheme is ideal for:

Entrepreneurs planning to build food grain storage facilities.
Businesses requiring private warehousing.
Industries with storage needs for food processing.
Individuals building godowns for leasing to Government Agencies.

Important Aspects to Consider :

Ensure Compliance with WDRA Norms: Avoid cost-cutting measures that deviate from these standards, as subsidy eligibility requires full compliance.
Plan with Revised Guidelines: Utilize the increased permissible cost to build high-quality storage facilities.
Leverage Multiple Schemes: Combine NABARD’s subsidy with AIF’s interest subvention for maximum financial benefit.

Conclusion :

This update from NABARD offers an excellent opportunity to enhance storage infrastructure while benefiting from doubled subsidy provisions. By aligning your projects with WDRA norms and utilizing the Agriculture Infrastructure Fund, you can significantly reduce costs and improve project viability.

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