What it does to your EMI
AIF reduces what you pay the bank. It is not a cheque, and it does not replace your own contribution.
The Agriculture Infrastructure Fund does not give you a subsidy. It changes what you pay the bank, on a loan you already have, and it does so in two separate ways.
An interest rate cut, not a cheque
Government pays down 3% of your interest rate every year, on loan principal up to ₹2 crore, for up to 7 years. It is a reduction in what you owe the bank across the life of the loan, and this page must not present it as a subsidy amount you receive.
Scheme Guidelines for CENTRAL SECTOR SCHEME of Financing facility under 'Agriculture Infrastructure Fund' (Agriculture Infrastructure Fund (AIF), Revised Scheme Guidelines)
Department of Agriculture & Farmers Welfare, Ministry of Agriculture & Farmers Welfare, Government of India
Printed September 2024
“Section 5, "Government Budgetary Support" table, item 1, verbatim: "All loans under this financing facility will have interest subvention of 3% per annum up to a limit of ₹ 2 crore ... for a maximum period of 7 years. In case of loans beyond ₹ 2 crore, then interest subvention…”Read the full clause
“Section 5, "Government Budgetary Support" table, item 1, verbatim: "All loans under this financing facility will have interest subvention of 3% per annum up to a limit of ₹ 2 crore ... for a maximum period of 7 years. In case of loans beyond ₹ 2 crore, then interest subvention will be limited up to ₹ 2 crore."”
p.6, Section 5 table, item 1
Read on 11 September 2026 by chirag.
The maximum this is worth, on a ₹2 crore loan, over the full 7 years
Worked out here from the rate below, not a total any single document prints on its own.
₹42,00,000 is the ceiling, not a guarantee. A smaller loan, a shorter term or a rate that would already have fallen for other reasons all reduce this figure. On a loan above ₹2 crore, the subvention still applies only to the first ₹2 crore of principal.
The credit guarantee fee
Alongside the interest cut, government pays the CGTMSE guarantee fee on the same loan, so your bank lends against a government-backed guarantee rather than demanding full collateral from you.
Scheme Guidelines for CENTRAL SECTOR SCHEME of Financing facility under 'Agriculture Infrastructure Fund' (Agriculture Infrastructure Fund (AIF), Revised Scheme Guidelines)
Department of Agriculture & Farmers Welfare, Ministry of Agriculture & Farmers Welfare, Government of India
Printed September 2024
“Section 5, "Government Budgetary Support" table, item 2, verbatim: "Credit guarantee coverage will be available for eligible borrowers from this financing facility under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for a loan up to ₹ 2 crore. The…”Read the full clause
“Section 5, "Government Budgetary Support" table, item 2, verbatim: "Credit guarantee coverage will be available for eligible borrowers from this financing facility under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for a loan up to ₹ 2 crore. The fee for this coverage will be paid by the Government."”
p.6, Section 5 table, item 2
Read on 11 September 2026 by chirag.
Convergence: the most useful sentence in this whole corpus
AIF is explicitly designed to sit alongside a capital subsidy from another scheme, MIDH named among them by the guideline itself.
Scheme Guidelines for CENTRAL SECTOR SCHEME of Financing facility under 'Agriculture Infrastructure Fund' (Agriculture Infrastructure Fund (AIF), Revised Scheme Guidelines)
Department of Agriculture & Farmers Welfare, Ministry of Agriculture & Farmers Welfare, Government of India
Printed September 2024
“Section 13 "Convergence", verbatim: "Any grant or subsidy available under any present or future scheme of Central/State government can be availed for projects under this financing facility, e.g. MIDH, PMFME, SMAM, Gobar-Dhan, PMKSY, AMI, PACS as MSC, RKVY, PM-KUSUM (A, B and C),…”Read the full clause
“Section 13 "Convergence", verbatim: "Any grant or subsidy available under any present or future scheme of Central/State government can be availed for projects under this financing facility, e.g. MIDH, PMFME, SMAM, Gobar-Dhan, PMKSY, AMI, PACS as MSC, RKVY, PM-KUSUM (A, B and C), PMEGP etc. In cases of capital subsidy such amount shall be considered as promoter's contribution. However, a minimum of 10% of the project cost shall be mandatory as promoter's contribution."”
p.12, Section 13
Read on 11 September 2026 by chirag.
Read the second half of that sentence as carefully as the first. Combining is explicitly permitted, but a MIDH or NHB capital subsidy is not an unrelated windfall sitting beside AIF’s interest relief: it is counted as your promoter’s contribution, the equity you must put in yourself, rather than credited on top of it. And whatever any subsidy covers, a minimum of 10% of project cost must still be your own money. A pitch that promises “zero money down” on an AIF-financed, subsidy-backed project is not supported by either document.