In the near future, the government plans to open a Rs 750 crore fund to assist the size and operations of rural and agricultural start-ups. The credible source reported that the fund will support investment and increase efficiency in the agriculture industry.
According to the FE article, the Ministry of Agriculture will use blended capital support to fund start-ups and rural businesses focused on agriculture.
“Blended finance is the strategic use of development finance for the mobilization of additional finance towards sustainable development in developing countries,” as per the Organization for Economic Co-operation and Development (OECD).
Nabventures, a fully owned subsidiary of the National Bank for Agriculture and Rural Development (NABARD), would oversee the management of the blended capital support.
NABARD and the Ministry of Agriculture will each contribute Rs 250 crore from the Rs 750 crore fund. It would be advantageous for startups in the fields of agritech, biotechnology, food processing, fisheries, and animal husbandry.
Supporting start-ups that lack equity and are unable to grow their operations is one of the fund's primary goals. With individual investments up to Rs 25 crore, the fund aims to assist about 85 start-ups in growing their business over the following five years. Additionally, inside Nabventures, a separate trust will be established in order to properly register the fund with the Securities and Exchange Board of India (SEBI).
There are "approximately 2207 DPIIT-recognized startups in the Agri-Tech industry spread across 360 districts," according to data from Startup India as of March 2023. Additionally, in 2022, the Ministry of Finance established a fund to support new ventures in agriculture.
According to a PBI announcement, Finance Minister Nirmala Sitharaman stated that NABARD will support the creation of a fund using blended capital that was raised through the co-investment approach. "Financing startups for agriculture and rural enterprises relevant to the farm produce value chain" was stated as the fund's stated goal. Under the Rashtriya Krishi Vikas Yojana (RKVY), the government also introduced the "Entrepreneurship Development" initiative from 2018 to 2019.
554 agri-start-ups operating in various agricultural and related sectors have received technical and financial support totaling Rs. 111.57 crores from 2019–20 to 2023–24 under this initiative, according to a release from the PIB.
