India has announced a scheme that provides financing at subsidized interest rates for investments in agricultural infrastructure.



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Cabinet approves Central Sector Scheme of financing facility under 'Agriculture Infrastructure Fund'

Inception date: 08 Jul 2020 | Removal date: 31 Mar 2033

Interest payment subsidy

On 8 July 2020, the Indian Union Cabinet of Ministers approved a scheme called the "Agriculture Infrastructure Fund" with the objective to provide medium to long term debt financing facilities for investments in post-harvest management infrastructure and community farming assets. Loans will be provided under the fund at an interest subvention of 3% per annum with a limit of INR 2 crore (~USD 276,000*) per loan. The loan will have a moratorium for repayment of a minimum of 6 months and a maximum of 2 years and certain eligible borrowers will also be provided credit guarantee on their loans.

The total outflow of the government has been estimated at INR 10,736 crore (~ USD 1.43 billion). The duration of the scheme will be from financial years 2020-21 to the year 2029-2030 while the loans will be disbursed over 4 years with a sanction of INR 10,000 crore (~USD 1.3 billion) in the year 2020-2021 and INR 30,000 crore (~USD 4 billion) for the next three financial years (until 31 March 2024).

On 12 May 2020, the Indian Prime Minister as part of an INR 2 million crore (~ USD 266.34 billion) package to support the agricultural economy affected by the COVID-19 pandemic had announced INR 100,000 crore (~USD 13.18 billion) to finance funding in post-harvest management agriculture infrastructure projects at farm-gate and aggregation points (See related State Act). 

On 8 July 2021, the scheme was amended. Loans will be disbursed under the scheme until the year 2025-2026 and the overall period of the scheme has been extended up to 2032-2033.

** INR to USD as of 8 July 2020 - INR 74.97/USD