Effectiveness of Agriculture Infrastructure Fund in India: A State-Wise Analysis

A scheme of Agriculture Infrastructure Fund (AIF) was launched by the Government of India in 2020, which incorporates debt financing facility for creation of post-harvest infrastructure and also investment facility for asset creation. Although the scheme has been operational for the past few years, it is felt prudent to perform an appraisal of efficacy and effectiveness of the scheme implemented across various states of India. The study was conducted in 2023 and it covered 500 units financed under AIF scheme spread across eight major states of India. Although the study shows quite satisfactory performance of the scheme, there are also issues that need to be addressed. Despite provision of financial assistance for large number of projects under the scheme, the debt financing to a larger extent is noticed to be for cold storages, primary processing centres and custom hiring centres. The study also shows that the loan sanctioned for various AIF projects across selected states covered only 40 per cent of the project cost on an average. Further, it is noticed that the credit guarantee cover under CGTMSE has been availed by only 56 per cent of beneficiaries, which calls for better coverage of such debt financing, especially in view of the fact that about 30 per cent of the beneficiaries of AIF scheme were not at all aware of any provision of loan being covered under CGTMSE. The study also shows that many of the beneficiaries of AIF scheme availed the advantage of convergence provided under AIF scheme, thereby receiving subsidies from other schemes of the Central/ State Government. Although about 30 per cent of beneficiaries of AIF scheme received subsidy from other central government schemes to establish their AIF units and the remaining beneficiaries received such subsidy from state government sponsored schemes, it is felt that the AIF scheme requires greater penetration and coverage, and more efficient delivery of debt financing for agriinfrastructure related projects.