The Cabinet Committee on Economic Affairs has given its approval for upward revision of interest subvention from "upto 2%" to "upto 2.5% p.a." under the scheme Dairy processing and Infrastructure Development Fund (DIDF) with the revised outlay of Rs 11184 Cr.

The scheme envisages to have interest subvention component of Rs 1167 crore to be contributed by DAHD during the period of 2018-19 to 2030-31 with spill over to first quarter of the FY 2031-32.

The scheme also has a loan component of Rs. 8004 crore to be contributed by NABARD. Rs. 2001 cr shall be contributed by Eligible End Borrowers and Rs. 12 cr would be jointly contributed by National Dairy Development Board (NDDB)/National Cooperative Development Corporation (NCDC).

Under Dairy Processing and Infrastructure Development Fund (DIDF) Government of India to provide Interest subvention upto 2.5% to NABARD from 2019-20 (with effect from 30.07.2019) to 2030-31 and in case there is any further increase in the cost of funds, it shall be borne by the end borrowers themselves.

The funding period (2017-18 to 2019-20) of the scheme is revised to 2018-19 to 2022-23 and the repayment period to be extended upto 2030-31 with spill over to first quarter of the FY 2031-32.

NABARD shall endeavor to keep the cost of borrowings to the minimum. NABARD shall devise its own strategy for borrowing so that it takes advantage of lower interest rate in the markets to provide low cost of funds to the Milk Unions.

NABARD should immediately initiate action plan for prompt disbursement of funds as and when the market is conducive to raising funds at affordable rates.