Emerging Trends in Financing of Micro Enterprises: AC&ABC Telangana Model Policy Review and Recommendations

Abstract

Agriculture and Indian economy are essentially the two sides of the same coin. This is due to the agriculture sector providing a livelihood for more than half of the population and contributing roughly 20.0 percent to the Indian economy. Further, important point to note is that India has the unique distinction of being one of the few countries in the world where the working-age population will outnumber those dependent on them, and according to the World Bank (Word Bank Overview Oct 04, 2021), this will continue until 2040, with 70.0 percent of the population living in rural areas. It is a challenge to retain these youth in rural areas by providing self-employment opportunities with credit support. Equally, the Indian Government has launched numerous initiatives over the years to strengthen the country’s economy. A number of Government flagship programs have been launched to create massive opportunities for unemployed Agri-professionals in India. Amidst, is the Agri-Clinics and Agri-Business Centers Scheme (AC&ABC), which has been in place for the past 20 years, being implemented in all the States of India. The ultimate goal of AC&ABC Scheme is to provide gainful self-employment opportunities to unemployed agricultural professionals and convert them into Agripreneurs. AC&ABC scheme’s main draws also are credit availability and re-finance. However, the financial situation demonstrated insignificant progress. To bridge the financial gap and ensure the availability of credit & re-finance to agripreneurs a tripartite Memorandum of Agreement (MoU) was made between the financial institutions and private/national organizations in Telangana State that was termed as AC&ABC Telangana Model. This article is focused on the progress and performance of AC&ABC Telangana Model in Telangana State with reference to AC&ABC Scheme of India.