Punjab’s Success with AIF Scheme

March 6, 2025

Recently, Punjab emerged as a leader in implementing the Agriculture Infrastructure Fund (AIF) scheme. The state utilised its entire allocation of ₹4,713 crore, securing an additional ₹2,337 crore from the Centre.

What is the Agriculture Infrastructure Fund?

The Agriculture Infrastructure Fund is a government initiative launched in July 2020.
Its primary goal is to provide medium to long-term financing for agricultural infrastructure projects, especially at the post-harvest stage.
The fund aims to reduce post-harvest losses and improve storage and processing facilities in rural areas.

Project Eligibility and Scope

Initially focused on primary post-harvest management, the AIF now supports integrated processing at the secondary level. Farmers can apply for funds to upgrade facilities for grading, waxing, and packaging. They can also receive support for producing value-added products like juices and jams.

Beneficiaries of the AIF Scheme

The scheme is open to various stakeholders. Eligible applicants include farmers, agripreneurs, primary agriculture cooperative societies, farmers’ producer organisations, start-ups, and public-private partnerships. This broad eligibility ensures a diverse range of projects can receive funding.

Punjab’s Achievements Under AIF

By February 2025, Punjab sanctioned 21,740 projects, the highest in India. This remarkable achievement was accomplished more than a year ahead of the March 2026 deadline. Other states like Madhya Pradesh and Maharashtra follow, but Punjab remains the frontrunner.

Types of Projects Funded

The AIF has supported a diverse array of projects. Examples include cashew processing units, oil extraction facilities, flour mills, cold storage, and solar projects. This variety demonstrates the scheme’s flexibility and its potential to enhance agricultural productivity.

Financial Mechanism of the AIF

The scheme offers a 3% interest subvention on eligible loans. The maximum interest rate is capped at 9% for loans up to ₹2 crore, with a repayment period of seven years. Beneficiaries can also access additional state and central subsidies, making the funding more accessible.

Impact on Farmers and the Economy

Approximately 71% of beneficiaries are farmers. Furthermore, 67% of projects sanctioned have costs below ₹25 lakh, indicating strong grassroots involvement. This emphasis on smaller projects helps to uplift local economies and improve livelihoods in rural areas.

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