Animal Husbandry Infrastructure Development Fund (AHIDF Scheme)

Complete information about AHIDF Scheme 2025: Learn about Animal Husbandry Infrastructure Development Fund eligibility, benefits, application process & interest subvention for businesses

Introduction

The AHIDF Scheme is one of the most significant opportunities for entrepreneurs and businesses in India’s livestock sector.  For business owners and entrepreneurs looking to venture into dairy processing, meat processing, animal feed manufacturing, breed improvement, veterinary pharmaceuticals, or waste management, AHIDF Scheme offers attractive financial incentives that can significantly reduce your project costs and enhance profitability.

What is the AHIDF Scheme?

The Animal Husbandry Infrastructure Development Fund is a financing scheme aimed to promote the private sector investment in animal husbandry infrastructure. The scheme specifically targets the development of:

• Dairy processing and value addition infrastructure – including ice cream units, cheese manufacturing, UHT milk processing, flavored milk, milk powder, and whey powder production
• Meat processing facilities – Meat processing facilities for goat, sheep poultry, pig etc.
• Animal feed manufacturing plants – from mini to large-scale operations including total mixed ration blocks, bypass protein units, and mineral mixture plants
• Breed improvement technology and multiplication farms – encompassing IVF centers, sex-sorted semen production, and modern breeding farms
• Veterinary vaccine and drug manufacturing facilities – with GMP-compliant infrastructure and quality control laboratories
• Animal waste to wealth management systems – including bio-CNG production, organic manure manufacturing, and innovative waste processing technologies

Who Are Eligible to Apply?

The AHIDF scheme has been designed with inclusive eligibility criteria to encourage participation from various categories of entrepreneurs:

Eligible Entities:

• Farmer Producer Organisations (FPOs)
• Private Companies
• Individual Entrepreneurs
• Section 8 Companies
• Micro, Small, and Medium Enterprises (MSMEs)
• Dairy Cooperatives –

Main Requirements under this Scheme:

• Applicants should have the necessary land (ownership or minimum 30-year lease)
• Applicants should obtain all statutory clearances before loan disbursement
• Projects must be commercially viable and technically sound
• Beneficiaries should not be loan defaulters

What is the duration of the AHIDF Scheme?

The AHIDF scheme operates under the following timeline:

• Scheme Duration: The applications under this scheme can be made till 31^st March, 2026 as per notification dated 1^st Feb, 2024.
• Sunset Date: The sunset date for this scheme is 31^st March 2033.
• Application Deadline: New applications would need to be submitted and projects sanctioned on or before March 31, 2026, to be eligible for loan disbursements under the current guidelines, with disbursements allowed up to March 31, 2027

What are the Benefits Provided under AHIDF Scheme?

The AHIDF scheme offers substantial financial incentives that make it highly attractive for business investment:

Financial Support Structure:

• Loan Coverage: Up to 90% of project cost through scheduled banks or NCDC, NABARD or NDDB
• Beneficiary Contribution:
  • Micro & Small enterprises: 10% of project cost
  • Medium enterprises: 15% of project cost
  • Other categories: 25% or more of project cost

Interest Subvention:

• Rate: 3% interest subvention for all eligible entities
• Duration: 8 years including 2-year moratorium period
• Direct Payment: Government pays interest subvention directly to lending banks
• Interest subvention will not be provided if the eligible entity defaults on loan repayment or if the account is classified as NPA
• Interest subvention is not allowed for loans sanctioned for procurement of land, working capital, pre-operative expenses, margin money for working capital, interest during construction (IDC), acquisition of existing infrastructure, old machinery, and vehicles for personal use.

Credit Guarantee:

• Coverage: 25% of credit facility for MSME projects
• CGTSME Coverage: CGTMSE scheme coverage up to Rs. 2 crore with 85% guarantee
• Beneficiaries not covered under MSME norms are eligible for interest subvention but not the credit guarantee

Lending Rates:

• MSME Projects: Maximum 200 basis points above External Benchmark Based Lending Rate (EBLR)
• Other Projects: Commercial interest rates as per bank policies

What is the Application Process for this AHIDF Scheme?

The application process for AHIDF Scheme follows a structured digital approach:

Step 1: Preparation Phase

1. Land Acquisition: Secure land through ownership or long-term lease (minimum 30 years)
2. Statutory Clearances: Obtain all required permits and licenses
3. DPR Preparation: Develop a comprehensive Detailed Project Report

Step 2: Online Application

1. Portal Access: Submit applications through https://ahidf.udyamimitra.in/ (managed by SIDBI)
2. Documentation: Upload all required documents including DPR, land documents, and clearances
3. Bank Selection: Choose preferred lending bank during application

Step 3: Evaluation Process

1. Initial Screening: Department of Animal Husbandry and Dairying evaluates eligibility
2. Bank Appraisal: Selected banks conduct detailed project appraisal
3. Committee Review: Project Approval Committee (up to ₹50 crore) or Project Sanctioning Committee (above ₹50 crore) reviews applications

Step 4: Approval and Disbursement

1. Loan Sanction: Banks approve loans based on project viability
2. Interest Subvention Approval: Government committees approve interest subvention
3. Disbursement: Loans disbursed in phases based on project milestones

How Benefits Are Disbursed under this AHIDF Scheme?

The benefit distribution mechanism ensures direct and transparent transfer:

Interest Subvention:

• Direct Payment to Lending Bank: The Department of Animal Husbandry and Dairying (DAHD) directly pays the interest subvention amount to the Scheduled Bank or other lending agency
• Upfront Payment for First Year: Initially, DAHD pays the interest subvention amount in advance upfront to the lending bank for the first year, based on the bank’s request
• Subsequent Year Releases: From the second year onwards, the interest subvention is released based on the non-NPA (Non-Performing Asset) borrowers’ entitlement as claimed by the Scheduled Banks every year in advance
• Transfer to Beneficiary’s Loan Account: The concerned banks are responsible for transferring the funds received under the scheme to the beneficiary’s loan account within three days of receipt.
• Conditions for Discontinuation: Interest subvention will not be provided if the Eligible Entity (EE) defaults on loan repayment at any point, or if the account is classified as NPA. It will also not be provided for the duration an account is NPA, even if it later returns to a standard category
• Non-Eligible Costs: Interest subvention is not allowed for loans sanctioned for the procurement of land, working capital, pre-operative expenses, margin money for working capital, interest during construction (IDC), acquisition of existing infrastructure, old machinery, and vehicles for personal use

To Sum Up:

The Animal Husbandry Infrastructure Development Fund presents a great opportunity for entrepreneurs and businesses to participate in India’s agricultural growth story and building profitable enterprises. The scheme’s comprehensive coverage across the entire value chain – from production to processing to waste management – ensures that businesses can find suitable opportunities regardless of their area of expertise. The 3% interest subvention alone can result in significant cost savings over the loan tenure, improving project viability and returns.

This article provides general information about the AHIDF scheme based on official guidelines for educational and informational purposes. The author is a Practicing Chartered Accountant and he can be reached at amit.mundhra@gmail.com