'Govt to launch ₹1,000 cr Credit Guarantee Fund to boost farm pledge financing'

New Delhi, Sep 18 (PTI) The government on Wednesday said it will soon launch a Rs 1,000 crore credit guarantee fund to enhance lender confidence in pledge financing against electronic Negotiable Warehouse Receipts for farmers and traders using WDRA-registered warehouses.

Food Secretary Sanjeev Chopra told reporters here that the fund with a corpus of Rs 1,000 crore will address the anticipated credit risk of lenders.

"A credit guarantee scheme has been approved recently and will be launched shortly," Chopra announced, highlighting the achievements in 100 days of the Modi 3.0 government.

The pledge financing against electronic Negotiable Warehouse Receipts (e-NWRs) was not gaining traction to a satisfactory level despite the government efforts to make it seamless with the recent introduction of the Kisan Upaj Nidhi portal, he said.

The Kisan Upaj Nidhi is a government initiative aimed at supporting farmers by providing financial assistance and facilitating easier access to credit.

The secretary said the pledge post-harvest financing was only Rs 3,962 crore in the total Rs 13 lakh crore credit in 2023-24. The lower pledge financing was due to "reluctance on the part of bankers anticipating a credit risk." The new credit guarantee fund aims to address the credit risk and ensure a pick up in loans against pledge of eNWRs to Rs 1,05,000 crore in the next 10 years from the current level.

The Secretary further said his department has used the PM Gati Shakti to optimise the routes taken by vehicles for carrying PDS foodgrains from FCI godowns to state godowns to fair price shops, thereby saving Rs 112 crore.

"We have received reports from 13 states and there are savings to the tune of Rs 112 crore. With a small intervention we are able to make this kind of savings," he said, adding that the department is exploring the possibility to quantify the carbon emissions that were reduced and avail carbon credits.

He said the government is gradually moving towards storing and movement of bulk foodgrains instead of bags. "Silos are coming up. A capacity of almost 21.75 lakh tonnes is already functional. Silos with a capacity of 7.5 lakh tonnes are under construction," he said.

A capacity of 3 lakh tonne at six locations has been completed during the 100 days. The department has planned to develop a capacity of 111.12 lakh tonne under Hub and Spoke Model, out of which tenders have been awarded for construction of 34.8 lakh tonne capacity in phase-I.

The government is in process to make arrangements for movement of foodgrain in bulk through specialized wagons with top loading and bottom discharge which will harness the optimum benefits of Silos by reducing the logistics cost, he added.

To make fair price shops (FPS) viable and bridge the nutritional gaps among PDS beneficiaries, the secretary said a pilot programme to transform 60 fair price shops as Jan Poshan Kendra (JPK) was launched last month in Ghaziabad (UP), Jaipur (RJ), Ahmedabad (GJ) and Hyderabad (Telangana).

These Jan Poshan Kendras offer non-PDS commodities with particular focus on nutrition-dense commodities at prices that are competitive with those in the open market, he said.

"Over the next five years, 50,000 FPSs are planned to be converted to JPKs across the country," he said. PTI