Do you want to start a coconut-based business? Do you know there is a Government subsidy scheme for innovative and value-added coconut-producing units in India? Here in this article, we intend to explore the Govt. subsidy scheme for coconut producing units under TMOC.
Post-harvest processing and value addition of coconut for effective utilization of harvested produce has become a major thrust of the coconut growing countries. Fluctuation in the price of the product is mainly due to the dependency on coconut oil.
Non-traditional products have great opportunities in the coconut industry. In coconut producing units, entrepreneurs must give the priorities for integrated processing for full utilization of coconut along with all other by-products like the husk, shell, leaf, midrib, timber, etc. This will enhance the overall income from coconut by farm-level processing.
Under Technology Mission on Coconut (TMOC), Coconut Development Board is providing assistance for setting up coconut-based industries other than the husk. Technology for the products like virgin coconut oil and dietary fiber, packing of tender coconut water, spray dried milk powder, vinegar, and other convenience foods are available with the board on payment of technology transfer fee.
Objectives of Subsidy Scheme For Coconut Producing Units
The goals and objectives of the Mission are to:
1. To establish convergence and synergy among numerous ongoing governmental programs in the field of coconut development. Additionally, the board tends to bring in horizontal and vertical integration of these programs
2. To ensure adequate, appropriate, timely, and concurrent attention to all the links in the production, post-harvest, and consumption chain
3. Additionally, to maximize economic, ecological, and social benefits from the existing investment and infrastructure created for coconut development.
4. To promote economically desirable diversification and value addition for generating skilled employment.
5. To disseminate technologies using a participatory approach through demonstration and promotion to address the gaps in a mission mode
Eligibility For Subsidy Scheme For Coconut Producing Units
Back-ended credit capital subsidy is provided to projects under TMOC, which are found to be technically and financially viable. The financial assistance is limited to 25% of the project cost but not exceeding Rupees 50 Lakh for infrastructure development, establishment or modernization, and up-gradation of coconut-based processing units under the scheme.
Registered societies, NGOs, entrepreneurs, individuals, and any other institutions having the capacity to adopt the technology are eligible for this assistance.
A detailed project report along with the application and all the relevant documents has to be submitted for availing the financial assistance from the board under the scheme. The promoter can avail subsidy from the concerned State Government agencies also but the total subsidy availed should be below 50% of the project cost altogether.
Refinement of traditional processing methods including quality certification, micro-filtering, branding could be considered as a value-added aspect in the case of coconut oil and virgin coconut oil and considered for assistance under the scheme.
In general, only those works, which were undertaken, and machinery equipment purchased after the date of submission of the project to the Board shall be considered for financial assistance.
Procedure Of Getting Subsidy Scheme For Coconut Producing Units
- The promoter has to avail at least 40% of the project cost as a term loan from a bank or financial institution of his choice.
- The cost of land development, construction of the building, electrification, machinery, its installation, know-how fee, etc. shall be considered normal for arriving at the eligible subsidy.
- The total cost of the building must be restricted to the minimum requirement of the processing unit proposed to be established as per the ceiling worked out for each product by the board which normally is restricted to 40% of the total project cost.
- You must display a permanent board on the premises of the unit stating that the project is established with financial assistance from the Coconut Development Board under the scheme TMOC.
- The proposed unit shall not be entitled to any subsidy in case the project is abandoned midway or the term loan availed from the bank is closed within 3 years of availing the same.
- The small coconut producing units should obtain AGMARK / BIS standards for their products and big units must have GMP and HACCP / ISO certification.
Terms & Conditions Of Subsidy Scheme For Coconut Producing Units
- Subsidy under the scheme shall be sanctioned by the Project Approval Committee (PAC) which shall be released by way of cheque or demand draft favoring the subsidy reserve fund of the promoter with their banks.
- The release of the first installment of subsidy shall be subjected to the fulfillment of the conditions in the triplicate MOU executed between the Board, financial institution, and promoter of the project.
- On completion of the project, the financial institution concerned shall inform the Board about the completion of the project. A joint inspection of the unit by band and CDB shall be undertaken in the presence of the promoter.
- For the release of the second installment, the promoter has to avail full loan sanctioned by the bank. The promoter shall submit an asset accrued statement as per the MOU duly certified by the Bank’s CA along with a list of machines and cost and building completion report by the engineers.
- Final payment of subsidy shall be released to the financial institution concerned on receipt of a satisfactory completion report and on stabilizing the production as per the MOU.
- The subsidy released by the Board shall be kept in the Subsidy Reserve Fund account with the bank from which the term loan has been availed by the unit.
- The processing units on reaching commercial production can also avail market promotional assistance from Board for brand promotion, participation in fairs or exhibitions, advertisement through electronic and print media, etc. The maximum eligibility for such assistance would be Rupees 10 Lakh on a reimbursement basis.
Editorial Staff at NextWhatBusiness is a team of Business Consultants having years of experience in small and medium scale businesses.