IAS Gyan

Daily News Analysis


15th July, 2023 Economy

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Context: The Ministry of Agriculture & Farmers Welfare (MoA&FW) has launched a new campaign for banks under the Agriculture Infrastructure Fund (AIF) titled BHARAT (Banks Heralding Accelerated Rural & Agriculture Transformation). The campaign aims to boost the creation of agri-infra projects in the country and support the farmers' income and livelihood.


  • The BHARAT campaign was launched on 15th July 2023 through a video conference attended by more than 100 banking executives from various public and private sector banks, regional rural banks, small finance banks, Non-Banking Financial Companies (NBFCs) and select cooperative banks.
  • The campaign will run for one month till 15th August 2023, with a target of Rs 7200 crore as loan amount under AIF.

Agriculture Infrastructure Fund (AIF)


  • The Agriculture Infrastructure Fund (AIF) is a central sector scheme launched by the Government of India in 2020 to provide medium to long-term debt financing for investment in post-harvest infrastructure and community farming assets.
  • The scheme aims to create a robust rural infrastructure that can enhance the value of agricultural produce, reduce wastage and increase farmers' income.


  • The AIF scheme was announced as part of the Atmanirbhar Bharat Abhiyan, a stimulus package to revive the economy amid the COVID-19 pandemic.
  • The scheme was designed to address the gaps in the agricultural value chain, especially in the post-harvest segment, which suffers from inadequate storage, processing and marketing facilities.

Main objectives

  • To improve the post-harvest management infrastructure and community farming assets, which will reduce wastage, increase value addition and enhance farmers' income.
  • To provide medium to long-term debt financing facility with interest subvention and credit guarantee to support viable projects.
  • To catalyse private sector investment in agriculture infrastructure by leveraging institutional credit.
  • To create employment opportunities and boost the rural economy.

Key Features

  • The scheme has a financial outlay of Rs 1 lakh crore over a period of 2020-21 to 2025-26.
  • It provides loans up to Rs 2 crore at an interest rate of 3% per annum for a maximum period of seven years to eligible beneficiaries.
  • The eligible beneficiaries include farmers, farmer producer organizations (FPOs), self-help groups (SHGs), cooperatives, agri-entrepreneurs, startups, central and state agencies and local bodies.
  • The loans can be availed for projects such as cold storage, warehouses, silos, pack houses, ripening chambers, grading and sorting units, e-marketing points, primary processing units, etc.
  • The loans are disbursed through multiple lending institutions such as scheduled commercial banks, cooperative banks, regional rural banks, NBFCs and microfinance institutions.
  • It provides credit guarantee coverage up to Rs 2 crore for each loan under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
  • The scheme is monitored by an online portal and dashboard that tracks the progress and status of each project.


  • The scheme can boost the creation of post-harvest infrastructure and community farming assets that can reduce post-harvest losses, improve the quality and shelf life of agricultural produce and enhance market linkages.
  • It can facilitate the formation and strengthening of FPOs that can empower small and marginal farmers to access better inputs, technology, credit and markets.
  • It can promote agro-processing and value addition activities that can increase income and employment opportunities for rural youth and women.
  • It can foster innovation and entrepreneurship in the agricultural sector by supporting startups and agri-businesses that can offer new products and services to farmers and consumers.
  • It can contribute to the food security and nutritional security of the country by ensuring adequate supply and availability of diverse and nutritious food products.
  • It can support the green revolution and climate resilience of agriculture by promoting efficient use of resources, adoption of renewable energy sources and mitigation of greenhouse gas emissions.


Coordination and Convergence

  • The scheme involves multiple stakeholders such as central and state governments, lending institutions, implementing agencies and beneficiaries. There is a need for effective coordination and convergence among them to ensure the smooth and timely execution of projects. This requires clear roles and responsibilities, regular communication, feedback and grievance redressal mechanisms.

Financial resources

  • The scheme relies on various sources of funding such as budgetary allocations, market borrowings and external funding. There is a need to ensure adequate availability and accessibility of financial resources from these sources to meet the demand and expectations of the beneficiaries. This requires proper planning, budgeting, allocation and utilization of funds.

Disbursement and repayment

  • The scheme provides loans to eligible beneficiaries at concessional interest rates with a moratorium period and credit guarantee. There is a need to ensure timely disbursement and repayment of loans by following transparent and simplified procedures and norms. This requires proper verification, documentation, sanctioning and monitoring of loans.

Awareness and capacity building

  • The scheme targets potential beneficiaries such as farmers, FPOs, cooperatives, SHGs, etc. who may not be aware of the benefits and opportunities of the scheme. There is a need to create awareness and build capacity among them to enable them to avail of the scheme and undertake viable projects. This requires effective outreach, information dissemination, training and handholding support.

Technical support and market linkages

  • The scheme supports various types of projects such as cold storage, warehouses, grading units, processing units, etc. that require technical know-how and market linkages. There is a need to provide technical support and market linkages to the beneficiaries to ensure quality standards, compliance norms and profitability of the projects. This requires access to experts, consultants, service providers, buyers, etc.

Quality standards and monitoring

  • The scheme aims to ensure optimal utilization and sustainability of funds by ensuring quality standards and monitoring mechanisms for each project. There is a need to ensure that the projects are designed, implemented, operated and maintained as per the prescribed guidelines and norms. This requires regular inspection, audit, evaluation and reporting of the projects.

Some of the possible steps that can be taken are:

Creating awareness and outreach

  • The scheme should be widely publicized and popularized among the target groups through various media and platforms such as print, electronic, social media, webinars, workshops, etc. This would help in generating interest and demand for the scheme, as well as disseminate information about its features, benefits, eligibility criteria, application process, etc.

Aligning with other schemes and programs

  • The scheme should be integrated and harmonized with other existing schemes and programs related to agriculture and rural development such as PM-KISAN, PM-FME, PMMSY, PM-AASHA, etc. This would help in avoiding duplication and overlap of resources, ensuring convergence and synergy of interventions, and leveraging the complementarities and linkages of different components of the value chain.

Strengthening infrastructure and institutional support

  • The scheme should be supported by adequate infrastructure and institutional arrangements such as digital platforms, common service centres, farmer facilitation centres, etc. These would help in facilitating the smooth and transparent implementation of the scheme, providing easy access to credit, information, guidance, and services to the beneficiaries, and monitoring and reporting the progress and outcomes of each project.

Providing incentives and subsidies

  • The scheme should be facilitated by providing incentives and subsidies to eligible beneficiaries such as tax exemptions, waivers, grants, etc. These would help in reducing the cost of capital, enhancing the viability and profitability of the projects, and encouraging more participation and investment from the private sector.

Evaluating and reviewing periodically

  • The scheme should be evaluated and reviewed periodically by independent agencies and experts to assess the performance and impact of each project and suggest corrective measures. This would help in ensuring accountability and transparency of the scheme, identifying the gaps and challenges, learning from the best practices and innovations, and improving the quality and efficiency of the scheme.


  • The AIF scheme is a landmark initiative that can revolutionize the agricultural sector and rural development. It can create a conducive environment for investment, innovation and income generation in the post-harvest segment. It can enhance the competitiveness and resilience of Indian agriculture in the global market. However, the scheme requires effective implementation and monitoring to ensure its success and sustainability. It requires active participation and collaboration of all stakeholders to achieve its objectives and outcomes.

Must-Read Articles:


Small finance banks: https://www.iasgyan.in/daily-current-affairs/small-finance-banks

Non-Banking Financial Companies (NBFCs): https://www.iasgyan.in/blogs/nbfcs-and-its-types

Cooperative Banks: https://www.iasgyan.in/daily-current-affairs/cooperative-banks


Q. Agriculture sector faces many challenges such as low productivity, climate change, water scarcity, market inefficiencies and inadequate infrastructure. How can India improve its agricultural infrastructure to overcome these challenges and enhance the performance and resilience of the sector? What are the benefits of investing in agricultural infrastructure for farmers, consumers and the environment? What are the main obstacles and opportunities for developing and maintaining agricultural infrastructure in India?