In the Union Budget presented on Sunday, Finance Minister Nirmala Sitharaman reaffirmed the Centre’s commitment to strengthening agricultural and cooperative infrastructure through the Agriculture Infrastructure Fund (AIF), a key Central Sector scheme aimed at developing post-harvest management infrastructure and community farming assets.
Under the scheme, banks and financial institutions will provide Rs 1 lakh crore in medium- to long-term loans to eligible entities, with a strong focus on Primary Agricultural Credit Societies (PACS), marketing and multipurpose cooperative societies, Farmer Producer Organisations (FPOs), Self Help Groups (SHGs), Joint Liability Groups (JLGs), agri-entrepreneurs, startups, farmers, and Central or State agency-sponsored Public-Private Partnership (PPP) projects.
All loans sanctioned under the AIF will carry an interest subvention of 3 per cent per annum, applicable for loans up to Rs 2 crore. This benefit will be available for a maximum period of seven years, substantially reducing the cost of credit for cooperatives and farmer-linked institutions investing in warehouses, cold storage, processing units, grading facilities, and other post-harvest infrastructure.
To further improve access to institutional finance, the Budget also provides credit guarantee coverage up to Rs 2 crore under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for eligible borrowers. The guarantee fee will be borne by the Government, helping to reduce lending risk and enhance credit flow to cooperatives and grassroots agri-entities.
