Union Cabinet approves Agriculture Infrastructure Fund

The loans dispersed under the financing facility will carry interest subvention of 3 percent per annum up to a limit of Rs 2 crore. 

Jul 9, 2020 14:01 IST
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The Union Cabinet chaired by Prime Minister Narendra Modi on July 8, 2020 approved the new pan-India central sector scheme-Agriculture Infrastructure Fund. The scheme will provide a medium - long term debt financing facility for investment in eligible projects for post-harvest management Infrastructure and community farming assets.

Under the scheme, Rs 1 lakh crore will be provided by banks and financial institutions as loans to Self Help Group (SHG), Primary Agricultural Credit Societies (PACS), Farmers, Marketing Cooperative Societies, Farmer Producers Organizations (FPOs), Joint Liability Groups (JLG), Multipurpose Cooperative Societies, Agri-entrepreneurs, Startups, Aggregation Infrastructure Providers and Central/State agency or Local Body sponsored Public-Private Partnership Project

The loans will be disbursed in a total of four years, starting with the sanction of Rs 10,000 crore in the current fiscal year, followed by Rs 30,000 crore each in the remaining three fiscal years.

Key Highlights 

•  The loans dispersed under the financing facility will carry interest subvention of 3 percent per annum up to a limit of Rs 2 crore. The interest subvention will be available for a maximum of seven years. 

•  The credit guarantee coverage will be provided to eligible borrowers from this financing facility under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for a loan up to Rs 2 crore.

•  The fee for the credit coverage will be paid by the central government. 

•  In the case of Farmer Producer Organizations, the credit guarantee can be availed from the facility set up under the FPO promotion scheme of the Department of Agriculture, Cooperation & Farmers Welfare (DACFW).

•  The total budgetary support from the central government will amount to Rs 10, 736 crores.

•  The moratorium period for the repayment of the loan under this facility will vary subject to a minimum of 6 months and a maximum of 2 years.


The project by facilitating formal credit to farm and farm processing-based activities will create more job opportunities in rural areas.

Other Details

The Agriculture Infrastructure Fund will be managed and monitored through an online Management Information System (MIS) platform. 

It will require qualified entities to apply for the loan under the fund. It will provide benefits such as transparency of interest rates offered by multiple banks, interest subvention and credit guarantee offered, minimum documentation and faster approval process along with integration with other scheme benefits.

The centre will set up national, state and district-level monitoring committees to ensure real-time monitoring and effective feed-back of the scheme. The scheme has been launched for a period fo 10 years from FY2020-FY2029.

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