Terms and conditions of Subsidy for Seed Production in India

Lending by Institutions

• Initially, a 25% subsidy will be provided to the beneficiary in the form of a term loan, and 65% of the project cost can be raised from the financing bank.
• The repayment period will be determined by the amount borrowed and can last up to 11 years, including a one-year grace period. The first installment is due within 23 months of the first disbursement date. Early payment is also permitted without penalty.
• Borrowers' interest rates on term loans will be determined by RBI guidelines. This is effective as of the loan's disbursement date.
• The financial institution may also provide working capital separately for the beneficiary's business venture.

Completion Time Limit

• From the date of loan sanction by the bank, a time limit of 15 months is set for the completion of the project. However, if the reasons for the delay are specified, the NCDC or participating bank will grant an additional grace period of three months. If the project is not completed within the specified time frame, the benefit of the subsidy will be lost, and the advance subsidy must be refunded.

• NABARD Refinance Assistance NABARD would provide refinance to Nationalized Banks up to a maximum of 90% of the amount financed in the form of a term loan, subject to their guidelines and norms.

Other Situations

• The NCDC or participating banks will adhere to their project appraisal standards.
• It is the beneficiaries' responsibility to maintain insurance coverage for the infrastructure being built as part of the project.
• The interpretation of various terms by the government will be final.
• If necessary, additional pre- and post-inspection will be performed to verify physical and financial progress.
• The government has the authority to add, delete, or modify any term or condition at any time and for any reason.
• Subsidies for the sector should focus on low-value or high-volume seeds like paddy, wheat, oilseeds, pulses, and other coarse cereals.

Procedure to be followed for Project Approval

To apply for the Scheme for Assistance to Seed Production, the applicant must follow the steps outlined below:

• The bank will verify the application and sanction the first installment of the loan, along with the brief project profile-cum-claim form and a copy of the bank's sanction letter provided to the Managing Director of National Seeds Corporation for an advance subsidy.
• On receipt of such project profile cum claim form from the participating bank, the NSC will approve and sanction a 50% advance subsidy to the participating bank for deposit in the Subsidy Reserve Fund Account (borrower-wise).
• The NCDC would verify the proposal for consideration and evaluate it in accordance with their guidelines.
• The NCDC should notify the Cooperatives and the NSC of its approval.
• The interest rate, funding pattern, and mode of release of sanctioned assistance should be carried out in accordance with NCDC's norms and policies circulated from time to time to the scheme's overall guidelines.
• The funds would be made available to the cooperatives within 15 days of the sanction.
• The NCDC should provide NSC with progress reports on a regular basis.
• The NSC should deposit a 50% advance subsidy in the NCDC's account. NSC must adjust/replenish the project-specific subsidy.
• The NCDC should provide NSC with a utilization certificate.
• The NCDC and NSC will inspect seed infrastructure facilities to ensure that they are being used as intended.

When the project is completed, the beneficiary will notify the bank, which will initiate steps for inspection by the Committee, which will consist of bank officials.

• Furthermore, the NSC must ensure that the seed infrastructures adhere to the financial and technical parameters.
• This inspection must be completed within one month of the beneficiary's submission of details.
• Following the inspection, the bank will submit the claim form for the final subsidy in duplicate to NSC in the prescribed format.
• The Committee's completion certificate and inspection report must be enclosed with the claim form for the final subsidy.
• The NSC will distribute the final subsidy to banks, which will be provided by the Seed Division, DAC, or adjusted against the advance subsidy given to the NSC.

NCDC is funding this project.

• The NCDC must help the cooperatives with seed infrastructure facilities.
• The cooperatives will develop proposals in the NCDC format and submit them directly to NCDC.

Also Read:- Subsidy for Seed Production in India