Punjab top performer in Centre’s agri fund scheme: What is AIF, who it helps

What is the AIF scheme, and what sort of projects can farmers undertake under it? We explain.

What is AIF?

The Agriculture Infrastructure Fund (AIF) was started in July 2020 with an aim to provide medium to long-term financing for agriculture infrastructure projects at the post-harvest stage.

While launching the scheme, Prime Minister Narendra Modi had said that wastage of post-harvest produce “hurts the farmer and causes a lot of damage to the country”, and the new scheme would “help in creating better storage and modern cold storage chains in villages.”

When the scheme was started, it was meant for post-harvest management and processing at the primary level, but now, integrated processing at the secondary level has also been included. For example, a kinnow farmer could earlier get funds under the scheme for grading, waxing, and packaging of the crop (primary post-harvest processes), but since August 2024, can also avail money to make and sell juices, jams, etc. out of his kinnow produce (secondary level).

However, the secondary level funds are available only to those involved in the primary processing too.

This scheme offers credit guarantees and interest subvention. Farmers, agripreneurs, primary agriculture cooperative societies, farmers producer organisations, start-ups, state sponsored public-private partnerships, state-agencies can apply for funds under this scheme.

What has Punjab achieved?

Under the AIF, the state was initially allocated Rs 4,713 crore from the national allocation of Rs 1 lakh crore. Punjab surpassed this target in January 2025, more than a year before the March 31, 2026 deadline.

As of February 28, with 21,740 projects, Punjab is at the No.1 position in the country for the highest number of sanctioned projects, said the state government.

Punjab is followed by Madhya Pradesh (12,487 projects), Maharashtra (10,407 projects ),Uttar Pradesh (8,539 projects ) and Tamil Nadu (7,598 projects )Notably, nine out of the top 10 districts in the country under this scheme are from Punjab.

What sort of projects have been taken up under the AIF scheme?

Projects as diverse as cashews processing, oil extraction units, drone projects, flour mills, kinnow processing units, solar projects, cold stores, customer hiring centres, etc. have been taken up.

According to Ravdeep Kaur, team lead of the State Project Monitoring Unit (SPMU), a total of 71% of all beneficiaries are farmers, and 67% of all sanctioned projects have a cost of below Rs 25 lakh, displaying effective grassroots penetration.

How the AIF scheme works

The scheme provides 3% interest subvention on eligible loans. Maximum interest rate is capped at 9% for 7 years, for loans up to Rs 2 crore, said Ravdeep Kaur.

Under the AIF, one can take benefits of other state and central subsidies as well. Credit guarantee support is through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) and National Bank for Agriculture and Rural Development (NABSanrakshan) Scheme.