Agri Business

Centre issues norms for ₹1-lakh crore Agri Infra Fund scheme

Vishwanath Kulkarni Bengaluru | Updated on July 21, 2020

UP gets the highest allocation of ₹12,831 crore, followed by Rajasthan at ₹9,015 crore

The Centre has issued guidelines for financing under the recently announced ₹1-lakh crore Agriculture Infrastructure Fund (AIF) scheme, that seeks to facilitate creation and strengthening of post-harvest management and marketing infrastructure across the country.

Under the scheme, ₹1-lakh crore will be provided as loan by banks and financial institutions to farmers, Farmer Producer Organisations (FPOs), Primary Agriculture Co-operative Societies, agri-entrepreneurs, start-ups, and marketing co-operatives, among others, to set up agriculture infrastructure, such as supply chain services, including e-marketing platform, primary processing centres, warehouses, silos, pack houses, assaying units, sorting and grading units, cold chains, logistics facilities and ripening chambers.


Financing under the AIF will also be extended to viable projects for building community farming assets, such as organic input production, bio-stimulant production units, infrastructure for smart and precision agriculture, projects identified for providing supply chain infrastructure for cluster of crops, including export clusters and projects promoted by central/ state/ local governments of their agencies under public-private partnerships (PPP).

The scheme will be operational from the current financial year till 2029-30. Disbursements will be made in the first four years — ₹10,000 crore in the current fiscal, and ₹30,000 crore each over the next three years. The moratorium for repayment under this scheme may vary from six months to two years, an Agriculture Ministry note said.


All loans under this financing facility will have an interest subvention of 3 per cent per annum up to a limit of ₹2 crore. This subvention will be available for a maximum period of seven years. For loans above ₹2 crore, the subvention will be limited to ₹2 crore, the Ministry said.

The extent and percentage of funding to private entrepreneurs out of the total financing facility may be fixed by a national-level monitoring committee consisting of officials from the Agriculture Ministry, states and NABARD, that will steer, guide and implement the project.

A Credit Guarantee coverage will be available for eligible borrowers from this financing facility under the Credit Guarantee Fund Trust for Micro and Small Enterprises for loans up to ₹2 crore. The fee for this coverage will be paid by the government.

All scheduled commercial banks, scheduled co-operative banks, regional rural banks, small finance banks, NBFCs, and National Cooperative Development Corporation (NCDC) may participate in this financing facility after signing an MoU with NABARD/Department of Agriculture.

Tentatively six states — Uttar Pradesh, Rajasthan, Maharashtra, Madhya Pradesh, Gujarat and West Bengal, are being allocated over half of this ₹1-lakh crore fund. The state-wise allocation has been worked out on the basis of the total value of agriculture and allied sectors of the states.

Allocation for UP has been pegged at ₹12,831 crore, Rajasthan – ₹9,015 crore, Maharashtra – ₹8,460 crore, Madhya Pradesh – ₹7,440 crore, Gujarat – ₹7,282 crore and West Bengal – ₹7,260 crore.

Other states receiving major allocation include Andhra Pradesh – ₹6,540 crore, Tamil Nadu – ₹5,990 crore, Punjab – ₹4,713 crore, Karnataka – ₹4,525 crore, Bihar – ₹3,980 crore, Haryana – ₹3,900 crore and Telangana ₹3,075 crore.

The Agri Infra Fund will be managed and monitored through an online MIS platform, and 24 per cent of the total grant-in-aid under the scheme should be utilised for SC/ST entrepreneurs, it said.

Published on July 20, 2020

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