4.1 INCENTIVES :

In India most projects in the agro industrial sector have been too highly leveraged considering the seasonal availability of raw material and their perishability, which contribute to considerable variability in revenues and concomitant debt repayment capability of the business. This has resulted in a reluctance of the financial sector to lend to this sector.

The Government of Gujarat will offer an attractive package of financial support and incentives for agro industrial projects to reputed companies with proven technical capability and track record to successfully conceive and implement agro industrial projects. Projects under the ambit of infrastructure, marketing, research and development and facilitation will be eligible for these incentives.

Incentive would be available to new Units as well as existing Units undertaking technology upgradation, modernisation, expansion or diversification. Incentives would be available in entire State except areas covered under jurisdiction of Municipal Corporation of Ahmedabad, Vadodara, Surat, Rajkot, Jamnagar and Bhavnagar. However, Cold Chain projects and Retail outlets for perishables will be entitled for incentives in areas under jurisdiction of Municipal Corporations also.

4.1.1

INTEREST SUBSIDY TO AGRO INDUSTRIAL UNITS :

The State Government will offer back ended interest subsidy to Tiny, Small, Medium and Large agro industrial units, as under:

1. 6% per annum back ended interest subsidy for first 5 years, from commencement of operations,
   

2. The aggregate interest subsidy will not exceed Rs.100 lacs,
   

3. The interest subsidy will be available on the funds borrowed from financial institutions/banks for capital investments only. No interest subsidy will be available towards working capital loan or any other loan, which is not in the nature of Term Loan meant for acquiring capital assets,
   

4. The interest subsidy will be released so long as the eligible unit continues timely repayment of the loan and remains in production.

4.1.2

AGRI INFRASTRUCTURE DEVELOPMENT:

The experience world over has demonstrated that impeccable agri supply chain infrastructure is key to a vibrant and competitive agriculture and agro industrial sector. The piecemeal attempts so far of setting up infrastructure for agri produce in Gujarat will be replaced by an well-orchestrated effort from the Government for coordinated and integrated infrastructure development all across the State.

In order to spearhead the development of infrastructure facilities in an efficient manner, the Government needs to plan the facilities that are required and proactively promote and support the same. Government has therefore decided to accord the highest priority for creation of supply chain infrastructure and support services for the agro industrial sector to create world class infrastructure corridors integrated with appropriate surface transport connections, cold storages, auction centers and retail chains.

The State Government will offer the following incentives for projects providing common infrastructure facilities in the value chain of agri produce from farm to market as decided by Single Window Clearance Committee:

4.1.3

ASSISTANCE FOR PREPARATION OF PROJECT REPORT :

Preparation of Project Report to set up Agro Industrial Unit is an intricate exercise, and requires multi disciplinary expertise such as Marketing, Finance, Technical and knowledge of supply chains, including involvement of foreign consultants, at times.

The State Government will reimburse 50% cost of preparation of the project report to set up new agro industrial units subject to ceiling of Rs.5.00 lacs. Financial Assistance will be released after the Unit is set up and commences its operations.

4.1.4

SUPPORT FOR SETTING UP OF CENTER OF EXCELLENCE/ SPECIFIC CROP DEVELOPMENT INSTITUTE :

Gujarat has proven edge in production and productivity of certain agri produce like castor, guar, psyllium husk, oil seeds, seed spices and some horticultural and herbal crops. These agri produce are generally cultivated and processed in geographical clusters which make it feasible for development of centre of excellence/specific crop development institute. Such institutes/centres would take up demonstration of agronomic practices, R&D (varietal and derivatives) developing, domestic and international market certification, quality assurance, standards, logistics, patenting, brand promotion, upgradation of technology for processing and packaging, improving and professionalising the term of trade in the whole chain and such other promotional activities.

The State Government proposes to encourage private sector industries, apex co-operatives institutions, APMCS, etc. to come forward and set up such centers/ institutes. The State Government will support such projects by providing land at concessional rate and 50% initial seed capital matching the industry contribution within a ceiling of Rs.5.00 Crores. In case the Center for Excellence is incorporated as a Company under the Companies Act, Government support will be treated as Equity. The centre/ institute will be managed professionally by the industry and information will be made available to farmers, processors and planners.

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