JKPSC Prelims 2021
General Studies (Paper 1)
Answer & Explanation
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Correct Answer:
Option D —
Interest free loans
Analysis of the Scheme:The Venture Capital Assistance (VCA) scheme is a flagship initiative managed by the Small Farmers’ Agribusiness Consortium (SFAC). It is designed to facilitate the growth of agribusinesses by providing financial support that bridges the gap between the entrepreneur's capital and the bank's requirements.
Financial Mechanism: The assistance is provided in the form of an Interest-Free Loan (Quasi-Equity) to meet the shortfall in the capital required for setting up an agribusiness project.
Repayment: Since it is a loan (and not a grant), it must be repaid to the SFAC after the bank’s term loan has been fully settled.
Objective: To encourage "Agripreneurs" to set up projects that provide assured markets to farmers and strengthen the backward linkages in the agriculture supply chain.
Eligibility and Features:
Eligible Entities: Individuals, farmers, producer groups, partnership/proprietary firms, and Self Help Groups (SHGs) involved in agriculture or allied sectors.
Project Criteria: The project must be a greenfield (new) project in agriculture and must be sanctioned a term loan by a bank/financial institution.
Quantum of Assistance: Usually, it is the lower of 26% of the promoter's equity or ₹75 lakhs. For North-Eastern states and hilly areas, the percentage and limits can be higher.
Answer verified by Quintessence Classes faculty — Karan Nagar, Srinagar.
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