• 9863020202    
  • contact@financeseva.in

Capital Investment Subsidy Scheme under National Bamboo Mission

The capital investment subsidy scheme has been launched to strengthen the domestic cultivation of more than 136 varieties of bamboo species and increase the income of the farmers. India has huge bamboo production and It generates more than 30,000 crores of income. The capital investment scheme is launched to provide a credit link facility to bamboo farmers through Financial Institutions under the National Bamboo Mission. The scheme encourages the farmers and entrepreneurs in the bamboo sector to submit their project proposals to eligible banks and obtain subsidies.   


There are several activities by NBM that provide credit linked to getting subsidies from various banks and financial institutions. These assistances are the following:   

  • Advance subsidies  

The state-level bamboo development agency releases 50% of the eligible subsidy amount to the participating financial institutions after reevaluating the project scrutiny note form as per the norms of the national bamboo mission (NBM). At the end of the repayment duration, it will be the same in a subsidy reserve fund account of the respective borrower and adjusted with the loan amount of the banks at the completion of the project on time.  

  • Final installments of subsidy  

The State Level Bamboo Development Agency disburses the remaining amount of 50% to the eligible financial institutions and other lenders after conducting an inspection and recommendation of the project by the Joint Monitoring Inspection Committee. This Committee has representatives from banks and the State and District Level Bamboo Development Agency.  

  • Adjustment of the subsidy   

The adjustment of the subsidy will be maintained separately in an individual borrower-wise account. The agency adjusts the cost of complete projects, with the grant amount, and without the beneficiary's contribution amount, as credit by the banks. The repayment schedule will be drawn on the loan amount as the total subsidy amount is adjusted after the full bank loan component with interest also included.  

  • Utilization certificates  

Utilization Certificate has to be submitted by the financing bank certifying that the full amount of subsidy received as per the project after the disburse of the full loan amount or subsidy. This has been utilized and adjusted in the books of Account as per the sanctioned terms and conditions of the project according to the guidelines of the scheme.  

  • No interest in subsidy portion   

The agency releases grants to financial institutions on the principle of providing interest-free subsidies. The financial banks can charge interest on the entire loan amount of the project, but the subsidy amount could be excluded. The creditor balance of the Subsidy Reserve Fund account will not form part of demand and time liabilities for the purpose of SLR/CRR (cash reserve ratio).  

  • Pattern of Assistance  
  • The fund's pattern of the scheme as prescribed by the Ministry is as follows:  
  • The owner of the project has to contribute 10% of the total cost of the project.  
  • The Ministry of Agriculture, Government of India grants a subsidy of 50% of the total cost of the project cost.  
  • It is 10% more for the North-Eastern States  
  • The bank loan is 40%


Eligibility for the scheme   

The applicant can submit their project proposals to eligible financial institutions for a grant of subsidy. The following are the eligible financing institutions under the scheme:  

  •  Commercial Banks, Regional Rural banks (RRBs), State Cooperative Banks (SCBs), State Co-operative Agricultural and Rural Development Bank (SCARDBs), Scheduled Primary Urban Cooperative Banks (PUCBs), Agricultural Development Finance Companies (ADFCs), Northeastern Development Finance Corporation (NEDFT), Cooperatives where they take loans from National Cooperatives Development Corporation (NCDC).  


Procedure to sanction the project and to release subsidy  

  1. The procedure to sanction the project and to release subsidies for a project under this scheme are provided through banks and other financial institutions described as follows:    
  2. The borrower must present the project proposal for term loan and subsidy along with the application form by the concerned bank, project report, and other documents for evaluation and approval of the loan is required.  
  3. The lender evaluates the profile and beneficiary's documents after they send a brief project profile cum claim form to the District Level Bamboo Development Agency to receive the advance subsidy.  
  4. District Level Bamboo Development Agency evaluates the project profile cum claim form submitted by the financial institution and sends the proposals to the State Level Bamboo Development Agency.  
  5. When the clearance and approval of the project were given by the State Level Bamboo Development Agency and a representative of the financial institutions, they released the loan amount to the beneficiaries.  
  6. The State Level Bamboo Development Agency approves the release of 50% of the advance subsidy to the concerned lender to be reserved in the Subsidy Reserve Fund Account.  
  7. To get the final subsidy receipt, the lender submits the claim form and approves the report of the committee and completion certificate to the state-level bamboo development agency through the district-level bamboo development agency.  

The period of the repayment will be as per the cash flow and may be extended up to 8 years with a grace period of 1 year. Security will be as per the norms of the RBI (Reserve Bank of India), it may vary from time to time.  

How Would You Rate This Article ?