With the intent to support the scale and operations of agricultural start-ups and rural enterprises, the government will soon launch a Rs 750 crore fund. The fund will help promote investments and bring efficiency to the agricultural sector, as per a report by the Financial Express (FE).
To finance agri based start-ups and rural enterprises, blended capital support will be rolled out by the Ministry of Agriculture, says the FE report.
“Blended finance is the strategic use of development finance for the mobilisation of additional finance towards sustainable development in developing countries,” as per the Organization for Economic Co-operation and Development (OECD).
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The blended capital support will be managed by Nabventures, a wholly owned subsidiary of the National Bank for Agriculture and Rural Development (NABARD).
From the Rs 750 crore fund, Rs 250 crore will be contributed both by NABARD and the Ministry of Agriculture. Start-ups that fall under agritech, animal husbandry, fisheries, food processing, and biotechnology would benefit from it.
One of the fund's main intentions is to help start-ups unable to scale their operations due to a lack of equity. The fund's goal is to support approximately 85 start-ups in expanding their operations over the next five years, with individual investments ranging up to Rs 25 crore. Further, a distinct trust will be set up within the Nabventures to formally register the fund with the Securities and Exchange Board of India (SEBI).
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Data from Startup India as of March 2023 says that there are “about 2207 DPIIT-recognized startups in the Agri-Tech industry spread across 360 districts.” In 2022 as well, the Ministry of Finance launched a fund to help agricultural start-ups.
Finance Minister Nirmala Sitharaman said that a fund with blended capital, raised under the co-investment model, will be facilitated through NABARD, as per a release by PBI. It said, “The aim of the fund will be to finance startups for agriculture and rural enterprises relevant to the farm produce value chain." From 2018–19, the government also launched the Entrepreneurship Development” programme under the Rashtriya Krishi Vikas Yojana (RKVY).
A release by the PIB says that 554 agri-start-ups working in various fields of agriculture and the allied sector have been provided technical and financial assistance of Rs. 111.57 crores from 2019–20 to 2023–24 under this programme.
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