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The Chairman/Managing DirectorAll Scheduled Commercial Banks/RRBs/SCARI)Bs/StcBs/Scheduled PUCBs

Dear Sir/Madam

Capital Investment Subsidy Scheme forCommercial Production Units of OrganicFarming under National project on organicFarming -Inclusion of Establishment ofSoil Testing Labs(Static/Mobile)/MiniLabsand Soil Testing Projects at Village level -_Operational guidelines

Please refer to our circular No.88/TSD-1/2oll dated 9 May 2oll on revisedoperational guidelines on continuation ofthe two components viz. Fruit andVegetable Market Waste Compost andBiofertilizers-Biopesticides productionunits under the Capital Investment SubsidyScheme for Commercial Production Unitsof Organic Inputs under National Projecton Organic Farming and circulars No 13odated 7 June 2ol6 on continuation of thescheme during 2ol6-17.

2. Govt. of India has launched a massivecampaign for promotion of Soil HealthCards among farmers and Got hasproposed to provide capital subsidy forsetting up of Soil Testing Labs. In thisregard, Ministry of Agriculture andFarmers Welfare(Pert Use Cell/INMDivision), Col vide their letter dated 8

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Department of RefinancePlot No. C-24, 'G' Block, Bandra-Kurla Complex, Bandra (E), Mumbai -4oo o5l. . Tel. : +9122 2653 9325 . Fax : +9122 2653 oogo . E-mail : dor@nabard.org

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February 2ol7 and letter dated 17 April2ol7 has forwarded the approvedoperational guidelines for establishment ofSoil Testing Labs(Static/Mobile), MiniLabs and Soil Testing projects at Villagelevel as additional components under thecaptioned scheme. The operationalguidelines of the scheme as approved byGovt. of India is enclosed.

3. Under the scheme, Each Soil TestingLaboratories (Static/Mobile) will beprovided with a subsidy @ 33.33% of costof the project subject or {251akh whicheveris lower, with the ceiling on project costincluding working capital for one operatingcycle at { 75 lakh. Similarly each soil testinglab at village level will be provided with asubsidy @4o% of cost or {41akh whicheveris lower with a ceiling on project cost @{1olakh. Mini-Soil Testing Lab with ICARTechnology will be provided with a subsidyassistance @44%of cost or {44,ooowhichever is lower with a project costceiling of {86ooo+ applicable tax. In allthese categories, Banks are free to provideloan to the units with higher cost than theceiling of project cost, however subsidy willbe provided upto the ceilings indicated.

4. The scheme will be implemented byNCOF, Ghaziabad in collaboration with theAgriculture and Co ope rati o nDepartment/concerned Department of theState Governments. Under NationalMission for Sustainable Agriculture(NMSA), District Level ExecutiveCommittees (DLEC) are formed, whichide ntify be nefici aries.Agriculture/Concerned Department ofState Govt. on recommendation by theDLEC will refer the cases to banks underthe scheme and the banks will sanction theloan subject to their norms/procedures.Banks can also refer the cases to DLEC forcon si deratio n. The fin an cingbanks/concerned Department of State

D:\GSS\7-1-NPOF\soil testing\bil.ingual word circular.docx

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Govt. will be monitoring the project closely.NABARD is the subsidy channelizingagency for the scheme.

5. AJthough subsidy is released in twostages ie. Advance and final subsidy in caseof the two components viz. Fruit andVegetable Market Waste Compost andBiofertilizers-Biopesticides unit underNPOF, subsidy will be released upfront(onetimesubsidy)tothefinancingbanksincase of the soil testing unit components byNABARD on submission of requireddocuments for subsidy by the financingbank. An application for one time subsidyas per proforma in Annexure I may besubmitted by the financing bank throughtheir Controlling office after release of firstinstalment of loan and after conductinginspection of the unit by the bank,DAC&FW/NCOF and State Govt.Department. After release of subsidy byNABARD a Utilization Certificate as perAnnexure 11 may be submitted by thefinancing bank to NABARD.

6. AIl the loans of soil testing units financedby the banks under the scheme from 1February 2ol7 will be eligible for subsidy.The scheme is applicable upto 31 March2ol8. The other two components, i.e Fruitand Vegetable Market Waste Compost andBio-Fertilizers-Biopesticides ProductionUnits under CISS of Organic Inputs underNational Project on Organic Farming alsowould continue during the year 2ol7-18.The sanction and release of subsidy issubject to availability of funds by Govt. ofIndia and adherence of instructions issuedby Got from time to time in this regard.

7. AIl the other conditions stipulated in ouroperational guidelines on CISS forCommercial Production Units of OrganicInputs under National Project on organicFarming would continue.

D:\GSS\7-1-NPOF\soil testing\bilingual word circular.docx

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8. You may, instruct your controllingoffices/branches about the details of thescheme and initiate other necessary stepsi n consultation with StateAgriculture/concerned Department ofState Govt. for its effective implementation.You may submit the proposals to theRegional Offices of NABARD in therespective states which will sanction andrelease subsidy under the scheme, subjectto availability of funds from Gol.

9. A copy of formats for submission ofsubsidy claims to NABARD, broadoperational guidelines of the scheme andformat for utilization certificate areattached.

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D:\GSS\7-1-NPOF\soil testing\bilingual word circular.docx

Annexure I

Format for One time Subsidy

Format for Project profile cum claim from the financing branch of the bank through itsControlling office for release of one time subsidy in respect of the component of Establishment ofSoil Testing Labs (Static/Mobile)/ Mini Labs and Soil Testing Projects at Village level under CISSforNationalProjectonOrganicFarming(TobesubmittedtoNABARDROconcernedwithacopyto NCOF, Ghaziabad and State Agriculture/concerned Department of State Govt.)

1. Name and Address of the project2. Name and Address of the promoter3. E-mail address/Aadhar No of the promoter4. Name and Address of the financing bank5. E-mail address/direct telephone Number of financing bank6. Date of receipt of proposal/application by the financing bank7. Date of sanction of term loan bybank8. Loan Account Number9. Date of disbursement offirst instalment of loanlo. Means of finance

Total Financial Outlay :Promoters ContributionBank Loan (term loan including working capital for one operating cycle) :

11. Type of unit

Soil Testing Laboratories (Static/Mobile)Soil Testing Labs (village Level)Mini - Soil Testing Labs with ICAR Technology

12. Rate of interest to be charged13. Repayment schedule prescribed14. Date of Inspection by financing bank15. Date of Inspection by Agriculture/concerned Dept. of St. Govt.16. Brief coverage on technical feasibility and financial viability

(Enclose separate sheet along with project report)17. Other relevant information, if any18. The project has been appraised and found to be technically feasible and financially

viable. We intend/do not intend to avail refinance from NABARD.19. An amount of ..... { ..... (..), being the eligible amount of subsidy may please be released in

respect of the project for crediting to the "Subsidy Reserve Fund Account - Borrowerwise"

2o. We undertake having complied with all the instructions contained in the circular No96/DOR-GSS-23/2ol7 dated 21 April 2ol7.

D:\GSS\7-1-NPOF\soil testing\Annexure final circular.docx

21. We note that a time limit of 15 months is stipulated for completion of the pro].ect fromthe date of sanction of the project. If reasons for delay in completion of the project isjustified, a maximum grace period of 3 Months may be allowed for completion of theproject. We also note that the subsidy has to be refunded forthwith to NABARD if theproject is not completed within the above stipulated period as per the broad parametersof the scheme. We also undertake to submit utilization certificate to NABARD aftercrediting the subsidy of the project to Subsidy Reserve Fund Account. It is further notedthat in case of any delay in refund of subsidy, the participating bank/beneficiary will beliable for payment of penal interest.

Branch ManagerSeal and Signature

Controlling officerSeal and Signature

Encl : (i) Bank's sanction letter (2) Brief profile on technical feasibility and financial viabilityand project report

D:\GSS\7-1-NPOF\soil testing\Annexure final circular.docx

line- 11Format for Utilization Certificate

Format for Utilisation Certificate from the financing branch of the bank in respect of thecomponent of Establishment of Soil Testing Labs (Static/Mobile)/Mini Labs and Soil TestingProjects at Village level under CISS for National Project on Organic Farming (To be submitted toNABARD RO concerned with a copy to NCOF, Ghaziabad and State Agriculture /concernedDeDartment of State Govt.)

1. Name and Address of the project2. Name and Address of the promoter3. E-mail address/Aadhar No of the promoter4. Name and Address of the financing bank5. E-mail address/direct telephone number of financing bank6. Date of sanction of term loan bybank7. Date of disbursement of first instalment8. Means offinance

Total Financial Outlay :Promoters ContributionBank Loan ( term loan including working capital for one operating cycle)

9. TypeofunitSoil Testing Laboratories (Static/Mobile)Soil Testing Labs (village Level)Mini - Soil Testing Labs with ICAR Technology

lo. Number of Soil Health Cards issued11. Date of Field Monitoring /Joint Inspection by officials of financing bank and State Govt.

Department and DAC&FW/NCOF12. Date of commission of the unit.13. Date of Completion of the Unit14. Brief Description of the assets created15. Date and amount of subsidy received

Amount of Subsidy received from NABARDDate of receipt of subsidy fl.om NABARDDate of credit to the Subsidy Reserve Fund A/c of the borrower

16. Rate of interest charged by the financing bank17. The bank has availed/not availed refinance from NABARD18. Other relevant information, if any

This is to certify that the fiill amount of subsidy received in respect of the above project hasbeenfullyutilised®ywayofcreditingtothe"SubsidyReserveFundAccount"-borrower-wise)and adjusted in the books of account under the sanctioned terms and conditions of the pro].ectwithin overall guidelines of the scheme.

PlaceDateSeal and Signature of Branch Manager

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Operational Guidelines for including the component of Soil Testing Labs(Static/Mobile and village level)/Mini-Soil Testing Labs in CISS for Vegetableand Fruit Market Waste Compost and Bio-Fertilizers - Bio-PesticidesProduction Units.

1. Introducti on :

Fertilizer consumption in India is highly \skewed with inter-state, inter-district and inter-crop

variations. The NPK ratio - a measure of balanced use of fertilizer - shows wide inter-state

disparity. Though there has been an impressive growih in the consumption of fertilizers in post

green revolution period, their reckless use has been one of the reasons for declining productivityin recent years. Investigations have revealed that one reason for the unbalanced fertilizer use is

lack of adequate soil testing facilities that forced the farmers to rely on fertilizer dealers for advice

on the fertilizer requirement. Hence the Government of India has launched a massive campaign

for promotion of Soil Health Cards among farmers. Further, the Got has proposed to provide

capital subsidy support for setting up of Soil Testing Labs in rural areas and include this as eligible

component under CISS for Vegetable and Fruit Market Waste compost and Bio-fertilizers - Bio-

pesticides Production Units.

The above scheme is credit-linked with back-ended capital subsidy. NABARD is the subsidy

channelizing agency. The Soil Testing Labs to be promoted are required to facilitate the quick

issuance of Soil Health Cards.

The objectives and parameters of the scheme are as under:

2. Objectives :1. To improve soil quality and profitability of farmers.

11. Employment generation for rural youth.

iii. To improve timeliness in analysis of soil samples.

iv. To provide soil testing facilities to farmers at their door step.

v. To facilitate state Governments to quickly provide soil health cards to farmers.

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4.

Expected Outcome :It will promote balanced and judicious use of plant nutrients.

The demand for organic sources of plant nutrient like bio-fertilizers, organic manure,

vermi-compost, slow release nitrogenous fertilizer like neem/sulphur coated urea will

increase, which in turn improve the soil fertility as well nutrient use efficiency.

Eligible Beneficiaries :Fertilizer companies, private industries, private entrepreneurs/individuals, PACS,

Farmers clubs and any other entity approved by the Government of India.

5. Types of units eligible under the scheme:i. Soil Testing Lab (Static/Mobile and village level) for catering upto lo,ooo samples/year

with command area of cluster of villages with facility to analyse 12 parameters tJ1.z pH, EC,

OC, N, P, K, S, Zn, Fe, Mn, 8 & Cu.

11.

6.

Mini-soil testing labs with ICAR technology for catering to 3,ooo samples/year with

facility to analyse 12 parameters LJi.z pH, EC, OC, N, P, K, S, Zn, Fe,Mn,Cu & 8.

Unit Cost and Rate of Subsidy:

Sr. Type of Unit Unit Cost (including Rate of SubsidyNo. working capital for oneoperatingcycle)*

1 Soil Testing {75,Oo,ooo 33.33% of cost orLaboratories (Static {25,oo,ooo whichever is

/Mobile) lower

2. Soil Testing Project { 10,00,000 4o% of cost or {4,oo,oooat Village level whichever is lower.

3. Mini-soil Testing { 86,ooo + applicable 44% of Cost or { 44,oooLab with I CARTechnology tax whichever is lower.

#Banks can provide loan to the units with higher cost than indicated here. But the subsidy

will be provided up to the ceilings indicated above.

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7. Margin:

The margin may be stipulated by the financing bank as per RBI Guidelines.

8. Rate of lnterest on loan:

9.

10,

11,

12,

The rate of interest on the loan will be charged as per the norms of financing bank.

Eligible Financial Institutions :

NABARD, Scheduled Commercial Banks, RRBs, StcBs, SCARDBs and such other

institutions which are eligible for refinance from NABARD can participate in the scheme.

Security for the loan:

As regards obtaining security for the loans, banks may follow RBI Guidelines.

Repayment period and Lock-in period:

Sr.No. Type of Unit Repayment Period Lock-in Period

1 Soil Testing Laboratories 8 years 3 years(Static /Mobile)

2. Soil Testing Project at village 8 years 3 yearslevel

3. Mini-soil Testing Labs with 4 years 1 yearICAR Technology

Refinance from NABARD :The refinance from NABARD will be available to banks as per the applicable NABARD

Refinance Policy.

13. Parking of advance funds with NABARD:The Government of India will park funds in advance with NARARD to facilitate quick

release of subsidy.

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14. Schemeperiod:AIl the loans financed by banks under the scheme from ol February 2ol7 are eligible for

subsidy.

15. If the loan becomes NPA, the beneficiarywill not get the benefit of subsidy and the amount

of subsidy released will have to be refunded.

16. Role of state Government:

i. Under National Mission for sustainable Agriculture (NMSA), the District Level Executive

Committees (DLEC) are formed, which identify the beneficiaries. The DLEC comprises of

Collector/ADM, Dy. Director (Agriculture), District Agriculture/Horticulture Officer,

Representatives of line Departments, SAUs/ICAR, nominated progressive farmers,

representatives from SHG, Project Director ATMA and representatives from lead

banks/NABARD.

ii. Agriculture/concerned Department of the state governments will (after recommendation

by the DLEC) refer the cases to the banks under the scheme and the banks will sanction

the loan subject to their norms/procedures. Banks also can refer the cases to DLEC for

consideration.

iii. The financing banks and Agriculture/concerned department of State Government will

monitor the project closely.

iv. The state Government will use these units as facilitators for issuance of soil health cards

and, if possible, route the payments towards soil health testing charges to be made to them

through the concerned banks where the loan for the project has been obtained in order to

facilitate smooth recovery of loans.

V. The State Government will provide technical guidance and training to the promoters of

such projects on the aspects of selecting suitable equipments for setting up soil testing

labs, conduct of soil tests, guiding farmers on soil health based on the data obtained

through soil tests etc.

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