RAS question
Agri-infrastructure Fund provides loans at what interest subvention?
Correct answer: (C) 3% per annum interest subvention.
Under the Agriculture Infrastructure Fund, banks and financial institutions provide loans with 3% per annum interest subvention by the Government of India.
Explanation
The Agriculture Infrastructure Fund is a Central Sector Scheme meant to mobilise medium- and long-term debt financing for post-harvest management infrastructure and community farming assets. Its financing design is why option C is correct: loans under the scheme carry 3% per annum interest subvention from the Government of India, not a higher or lower rate. The exam-relevant ceiling and support structure are also important: this benefit applies to loans up to Rs 2 crore for 7 years, with credit guarantee support through CGTMSE. Press Information Bureau also frames the scheme around agri-logistics, reduced post-harvest losses, modern storage, processing, value-addition and farm-gate infrastructure, which explains why concessional debt is central to the scheme.
Why the other options are wrong
- (A) 5% overstates the concession; the scheme provides 3% per annum interest subvention, not 5%.
- (B) 1% understates the benefit because the notified subvention under the Agriculture Infrastructure Fund is 3% per annum.
- (D) The scheme is not without subvention; PIB specifically states that loans are provided with 3% per annum interest subvention by the Government of India.
Concept
This tests agricultural credit and infrastructure support under Government of India schemes. It recurs in RAS because such schemes link economy, agriculture, public finance and rural development in a single fact pattern.