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Gramin Bhandaran Yojana or Rural Godown Scheme

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  • Last Updated : 17 Aug, 2022
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Gramin Bhandaran Yojana is a capital investment subsidy scheme that promotes the construction and renovation of rural godowns. This scheme is also available to rural godowns located in various food parks. This yojana, announced in 2001, is a capital investment subsidy scheme for rural godown renovation and construction. However, godowns should be built outside of municipal corporation boundaries. It is important to note that rural godowns (promoted by the Ministry of Food Processing) in food parks can also benefit from the Gramin Bhandaran Yojana.

Background of the Gramin Bhandaran Yojana:

During 2001-2002, the Indian government launched the Gramin Bhandaran Yojana, under which many rural godowns were built or renovated for the benefit of local farmers. This was a capital investment subsidy program aimed at improving the living conditions of Indian farmers. Many corporates, non-profit organizations, self-help groups, like-minded individuals, farmer groups, companies manufacturing and marketing agricultural products, and others have taken an interest in this scheme and have contributed significantly to the construction of many rural storage godowns across the country in a relatively short period of time. Farmers can build their rural storage godown anywhere outside of their Municipal Corporation’s jurisdiction.

Important Terms/Definitions of the Gramin Bhandaran Yojana:

  • Subsidy: A government incentive or subsidy is a type of financial assistance or support given to an industry typically with the goal of advancing economic and social policy.
  • Godown: A godown is a type of commercial structure that houses products for storage. Products that customers can utilize are created with the help of the items.
  • Municipal Corporation: The legal word for a local governing body is a municipal corporation, which includes (but is not limited to) cities, counties, towns, townships, charter townships, villages, and boroughs. 

Goal of the Gramin Bhandaran Yojana:

The Gramin Bhandaran Yojana envisions a strong network of non-urban godowns to assist in the construction of adequate scientific storage for farm produce in rural areas. Farmers in villages are less likely to sell their harvest in distress due to increased storage capacity provided by the scheme’s marketing credit and pledge financing. The scheme’s goal is to provide better storage facilities for farm produce, agricultural inputs, and processed farm produce, as well as standardize farm produce to increase demand in the market for a national warehouse receipts system.

Implementation of the Gramin Bhandaran Yojana:

  • So far, the Gramin Bhandaran Yojana has provided subsidies to farmers across the country for the construction of storage godowns in urban, rural, or hilly areas. If the entrepreneur is from the SC or ST community and the godowns will be built in rural or mountainous areas, this scheme will provide a subsidy of 33.33 percent of the capital cost of the godown, with the maximum allowable subsidy set at around 3 crore INR. If godown entrepreneurs are agricultural graduates or professionals, they will receive a 25 percent subsidy on the total capital cost, with the maximum allowable subsidy set at 2.25 crore INR. If the entrepreneurs are corporates, individuals, or other companies, the subsidy is set at 15% of the total capital cost, with a maximum limit of 1.35 crore INR. If godowns must be renovated with the help of NCDC, the subsidy is set at 25% of the total capital cost.
  • The government uses a specific method for calculating the total capital cost for implementation purposes. The capital cost for godowns with a maximum storage capacity of 1000 tonnes is the actual cost or amount fixed by the bank that finances the cost, or it is valued at 3500 INR per tonne – the lowest of the three.
  • For godowns with more than 1000 tonnes of storage capacity, the capital cost is the actual cost or amount fixed by the bank that finances the cost, or it is valued at 1500 INR per tonne – the lowest of the three. NABARD is primarily the bank that distributes subsidies to entrepreneurs for godowns built or renovated with financial assistance from Regional Rural Banks, Commercial Banks, and Cooperative Banks. State Cooperative Agricultural and Rural Development Bank, Agricultural Development Finance Companies, Urban Cooperative Banks, North Eastern Development Finance Corporation, and other approved agents can also finance these projects.

Eligibility of the Gramin Bhandaran Yojana:

The Gramin Bhandaran Yojana is available to the following people:

  1. Marketing committees
  2. Cooperative societies for agricultural processing
  3. Quality control laboratories
  4. Agro-processing companies
  5. Partnership corporations
  6. Agro-industrial companies
  7. Companies
  8. Marketing Committees for Agricultural Products
  9. Farmers
  10. Private companies
  11. Co-operatives
  12. Non-Governmental Organizations (NGOs)
  13. Corporations
  14. Farmers’ organizations
  15. Self-help organizations

Features of the Gramin Bhandaran Yojana:

  • Size of godown: The capacity of the owner’s godown must be determined. The scheme is subsidized for a minimum of 100 loads and a maximum of 30,000 loads. On the basis of topography or viability analysis/requirement of a region, a smaller rural godown with a capacity of 50 tonnes is also qualified under the scheme. In some cases, godowns in hilly areas with a capacity of 25 tonnes are also eligible for the scheme.
  • Conditions: Godowns should have a strong structure for storing agricultural produce. The State Warehousing Act may require entrepreneurs to obtain a license. The Central Warehousing Corporation must accredit godowns with a storage capacity of around 1,000 tonnes.
  • Location: Godowns must be built outside the municipal corporation’s boundaries. Additionally, any godowns (promoted by the Ministry of Food Processing Industries) located in food parks are eligible.
  • Pledge Loan: Farmers can obtain a pledge loan after a hypothecating farm produce. The interest rates, loan amount, and pledge period are determined by the RBI/NABARD guidelines and various financial institutions’ banking practices.
  • Assistance with credit: Subsidies linked to institutional credit are available for projects funded by the following institutions: Cooperative Banks in Cities, Rural regional banks, Banks for business, State Co-operative Agricultural and Rural Development Bank of North Eastern Development Finance Corporation, Cooperative state banks,
  • Capital Expense Godowns (1000 tonnes): The actual cost or the cost of a project appraised by a bank, or Rs.3500 per tonne, whichever is less.
  • Godowns with a capacity greater than 1000 tonnes: It is determined by the actual cost or the cost of a project appraised by a bank, whichever is less.

Frequently Asked Questions about the Gramin Bhandaran Yojana:

Q1. When the Gramin Bhandaran Yojana is launched?

Ans: The Gramin Bhandaran Yojana, launched in 2001, is a capital investment subsidy scheme for rural godown renovation and construction. However, godowns should be built outside of municipal corporation boundaries. It is important to note that rural godowns (promoted by the Ministry of Food Processing) in food parks can also benefit from the Gramin Bhandaran Yojana.

Q2.  Who are eligible for the Gramin Bhandaran Yojana?

Ans: The Gramin Bhandaran Yojana is available to the following people:

  • Marketing committees
  • Cooperative societies for agricultural processing
  • Quality control laboratories
  • Agro-processing companies
  • Partnership corporations
  • Agro-industrial companies
  • Companies
  • Marketing Committees for Agricultural Products
  • Farmers
  • Private companies
  • Co-operatives
  • Non-Governmental Organizations (NGOs)
  • Corporations
  • Farmers’ organizations
  • Self-help organizations

Q3. What are the Objectives of the Gramin Bhandaran Yojana?

  • Creation of scientific storage capacity, thereby avoiding distressed sales reduction of quantity and quality losses.
  • Increased employment opportunities in rural areas
  • FCI and other agencies assist in the easy procurement of food grains.
  • Cooperatives renovated and upgraded existing storage capacity with the assistance of NCDC.

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