After the launch of AIF in 2020, under which the beneficiaries get loans from banks at 6 per cent interest as the Centre bears 3 per cent interest subsidy, there are many new schemes started by the government in the agriculture sector, officials said adding AIF needs to be aligned with those schemes.
For instance, the Pradhan Mantri Dhan-Dhaanya Krishi Yojana (PMDDKY) was launched in July last year in which infrastructure development in 100 identified districts is one of the key objectives.
“If there is a push either through higher interest subsidy or margin money waiver for AIF projects in these 100 districts, the PMDDKY may succeed,” an expert said.
The PMDDKY scheme aims to enhance agricultural productivity, increase adoption of crop diversification and sustainable agricultural practices, augment post-harvest storage at the panchayat and block levels, improve irrigation facilities and facilitate availability of long-term and short-term credit.
In its very first set of decisions after shifting to Seva Teerth, Prime Minister Narendra Modi signed important files relating to decisions that reflect the spirit of Seva, an official statement said last month.
“In a move aimed at strengthening India’s entire agriculture value chain, the PM has announced the doubling of the loan target of the AIF from ₹1 lakh crore to ₹2 lakh crore,” the PMO had said on February 13.
But, some experts said that raising the target is one thing and achieving it in a timebound period is the real challenge. The Centre is yet to achieve the ₹1-lakh crore target in last six years, with some bankers already flagged concern over saturation of the scheme in some districts, the experts said.
“Banks will extend credit if the project is commercially viable despite the government guarantee as the repayment period in AIF is 7 years including moratorium of two years, if applicable. There is need for relaxation if business from AIF projects are to be made viable as whatever possibilities were there have been almost exhausted in last 5-6 years,” said a consultant earlier worked in AIF.
The government since 2020 has ‘approved’ credit worth ₹84,034 crore in 1,67,452 projects where total estimated investment is over ₹ 1.33 lakh crore. But, as total ‘disbursal’ of credit is ₹61,823 crore, as many as 19,653 projects are yet to receive credit.
Primary processing Centre, warehouse and cold stores are three major areas (57 per cent of total sanctioned amount and 28 per cent of total number of projects) where banks and cooperatives have sanctioned ₹ 21,327.53 crore, ₹ 16,365.35 crore and ₹ 10,001.95 crore, respectively, as people have shown interest to avail the credit under AIF.
There are 46,067 projects to set up custom hiring centres (where farm machinery and equipment is available for rent) for which the sanctioned amount is about ₹6,768 crore which means the average credit per project availed is less than ₹15 lakh, an official source said highlighting the doubling target potential of the AIF scheme as India moves towards mechanisation.
Published on March 8, 2026