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Dear Businessman,
We are sharing with you the technical specifications related to land selection the site selection for constructing godowns. If you are interested in the Warehousing Business or if you are developing storage facilities for an allied business or for a third party and want to benefit from NABARD’s subsidy you need to take care of the site-related norms.
Important Aspects :
The important aspect here :-
1 Own land /Leased Land :
- When selecting sites for godowns, the site should ideally be owned by you. If the site is owned, it will be easier to obtain bank loans or qualify for further subsidy provisions.
- Another aspect to consider is whether you can still benefit from NABARD’s subsidy if you lease the land. Yes, NABARD guidelines do provide for the benefit if you lease the land and construct on it. The lease must be for a minimum of 15 years. This means that the registered lease date for the land you use for godown construction should be at least 15 years.
2 EMI Scheme :
- Rural Storage Scheme, is now also referred to as the EMI Scheme. This scheme is related to agricultural marketing infrastructure, which involves storage or primary processing activities connected with agricultural produce.
- If your site is within the boundary of a Municipal Committee or Municipal Corporation, you will not be able to benefit from NABARD’s subsidy.
- If your site is within the boundary of a Municipal Corporation but is designated by the Government as a Food Park, APMC (Agricultural Produce Market Committee) area, or any nominated Industrial Area by State or Central Agencies. In such cases, even if the site is under Municipal Committee or Municipal Corporation control, you can still benefit from the NABARD subsidy if you set up a Warehousing facility there.
3 Promoter Contribution :
The Total Funding required for the project, including godown construction, should include a minimum of 20% margin.
4 Cost Of Land Acquisition :
- If you are buying land, the cost of buying the land can be included in this margin. The provision allows you to include the cost of land acquisition, either at market value or registered value.
- If you are leasing the land, the lease payment amount can also be considered. Both values, whether for purchased land or lease payments, can be part of the project cost, subject to a maximum of 10% of the total project cost.
- You can allocate the cost of land, which is a good provision under the margin norms where you need to show a 20% promoter margin to qualify for the NABARD subsidy. If you use your own funds for buying the land, you can utilize that amount as part of your promoter contribution.
5 Public Access :
Public access means that there should be a Government Road or access route to the site. Revenue records should reflect this because any authorities, Bankers, or Government Agencies involved in providing subsidies or loans will check this. The site where you implement the project should have unrestricted access, meaning there should be no restrictions on transportation.
- Ensure that the site is connected by a road that is at least 22 feet wide, as this facilitates easier access for trucks. Although NABARD does not specify that the road needs to be connected, having a road connection simplifies accessibility for storage facilities.
- if your godowns are constructed according to norms, have public access, and are connected by at least a 22 feet wide road, they could qualify for tenders from state or Central Procurement Agencies like FCI or CWC for food Grain Storage.
6 Title Documents :
When planning your land, make sure that the title documents are clear and free of disputes. The land’s records, such as Jamabandi, Intkal mutations from previous buyers, should be clear and unambiguous. This will make it easier to obtain bank loans and ensure clarity when submitting documents for NABARD subsidies.
7 Land Conversions :
When selecting a site, ensure whether it falls within a Town and Country Planning defined controlled area. If it does, you will need to convert the land accordingly. If the land is agricultural or residential and needs to be converted to commercial use, ensure this conversion is completed. If the land is outside the controlled area, you will need to obtain a No Objection Certificate (NOC).
8 Area Requirements :
- For a storage capacity of 5000 metric tons, a minimum of 2 acres of land is required. Ensure that your land size meets this requirement so you can easily comply with construction norms and secure both subsidies and Bank Loans.
- By following these site-related norms, you can successfully apply for NABARD subsidies and benefits from the Agricultural Infrastructure Fund, which will help you maximize the advantages of your project along with Bank Finance.
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