Polyhouse farming is profitable, but the initial setup cost is high (₹30-40 Lakhs/acre) for most of the Indian farmers. The government is ready to pay for half of it or even more as subsidy. Here is the process of applying for polyhouse subsidy.
If you are planning to set up a polyhouse, greenhouse, or net house in India, you are eligible for financial assistance (govt. subsidy) ranging from 50% to 95% depending on your state and category. However, the application process is technical, and a single mistake in the timeline can disqualify you.
In this guide, we break down exactly how to claim the National Horticulture Board (NHB) subsidy, the difference between Central and State schemes, and the documents you need to get your “Letter of Intent” (LOI).
NHB vs. NHM: Which Scheme Should You Choose?
Most farmers get confused here. There are two main routes to get funding:
| Feature | National Horticulture Board (NHB) | National Horticulture Mission (NHM/MIDH) |
| Source | Central Government (Direct) | State Government (Horticulture Dept) |
| Project Size | Best for Projects > 2,000 sq. mtr (Commercial) | Best for Smaller Projects (< 2,000 sq. mtr) |
| Subsidy % | Flat 50% on allowable cost | Varies 50% – 65% (State specific) |
| Process | Online Application + Delhi Approval (Central govt.) | District Horticulture Officer Approval (State govt.) |
| Difficulty | High (Strict Standards) | Moderate (Depends on State Budget) |
| Official Sites | NHB Schemes | NHM/ MIDH Schemes |
FarmAtma Advice: If you are building a commercial 1-acre (4,000 sq. mtr) unit, NHB is usually the better option because it has a higher project cost ceiling (Cap).
The NHB Commercial Horticulture Scheme (2026 Details)
This is the most popular scheme for commercial farmers.
- Subsidy Rate: 50% of the “Project Cost.”
- Maximum Ceiling: Up to ₹56 Lakhs per beneficiary (may vary based on latest guidelines).
- Pattern of Assistance: Credit-Linked Back-Ended Subsidy.
What does “Credit-Linked” mean?
This is crucial. You cannot self-finance 100% of the project and ask for cash back.
- You must take a Term Loan from a bank (min 15-25% margin money).
- The bank pays the contractor.
- Once the project is finished and inspected, the Government releases the subsidy to the bank.
- The bank keeps this money in a “Subsidy Reserve Fund” (SRF) account. It adjusts against your loan principle at the end, reducing your EMI burden.
State-Wise Subsidy Breakdown
While NHB is standard, some states offer “Top-Up” subsidies under their own schemes.
| State | Subsidy % | Special Notes |
| Haryana | 65% | 50% (NHM) + 15% State Top-up. Very popular. |
| Gujarat | 50% + 6% Interest Subvention | Additional interest subsidy makes loans cheaper. |
| Telangana | 75% – 95% | Higher rates for SC/ST farmers. |
| Maharashtra | 50% (POCRA/NHM) | “POCRA” scheme available for drought-prone districts. |
| Rajasthan | 50% – 70% | High focus on Solar Pumps + Polyhouses. |
How the Subsidy is Actually Calculated: The “Funding Gap”
There is a dangerous misunderstanding among new farmers regarding “Project Cost.” You might think: “If I spend ₹50 Lakhs, the government gives me 50% subsidy on ₹50 Lakhs.” Wrong.
The government and banks do not look at your vendor’s bill; they look at the “Cost Norm.”
What is the Difference?
- Cost Norm: This is the maximum price fixed by the government (NHB/MIDH) per square meter. It is often outdated and lower than current market rates.
- Actual Cost: This is the real price you pay to the vendor in 2026, which includes increased steel prices, labor, and GST.
The Gap Analysis (1 Acre NVPH Example)
| Item | Govt. Cost Norm (Approx)* | Actual Market Rate (2026) | The “Gap” (You Pay) |
| Structure Cost | ₹844 / sq. mtr | ₹1,050 / sq. mtr | – ₹206 / sqm |
| Total (4000 sqm) | ₹33.76 Lakhs | ₹42.00 Lakhs | – ₹8.24 Lakhs |
| Subsidy (50%) | ₹16.88 Lakhs | (Not Applicable on extra) |
* Note: Norms vary by state and scheme, but they rarely match the current steel prices.
Why This Matters for Your Loan
Because of this gap, your financial planning takes a hit in two ways:
- Lower Subsidy: You calculated a subsidy of ₹21 Lakhs (50% of ₹42L), but you will only receive ₹16.88 Lakhs. You are instantly short by ₹4 Lakhs.
- Higher Margin Money: The bank might agree to fund the “Actual Cost,” but they will ask you to cover the “Gap” amount as part of your promoter contribution.
FarmAtma Reality Check:
Do not rely on the “50% Subsidy” marketing headline. In reality, because the Norms are lower than Market Rates, the Effective Subsidy usually works out to be around 35% to 40% of your total expense.
The Strategy: Always carry 15-20% extra cash (over and above your 25% margin money) to cover this “Non-Subsidy Component.” If you don’t, your project will stall at the roof level.
Documents Required (The Checklist)
To get the In-Principle Approval (IPA), you need to upload these documents on the NHB portal:
- Land Documents:
- 7/12 Extract and 8-A Extract (or equivalent land title).
- Land Map (Nakasha) certified by the Tehsildar/Talathi.
- Lease Deed: If land is leased, it must be registered for 15+ years.
- Detailed Project Report (DPR):
- Must include financial feasibility (IRR, ROI, DSCR).
- Tip: Banks reject generic DPRs. Make sure yours is specific to your crop and location.
- Bank Sanction Letter: A letter from the bank stating they have approved a Term Loan for the project.
- Basic KYC: Aadhaar, PAN Card, and Passport size photo.
- Prescribed Format I: A specific declaration form available on the NHB website. In simple terms, Format I is your “Permission Request”. It is the official application form for In-Principle Approval (IPA) or Letter of Intent (LOI).
FarmAtma Update: Previously, this form was used for “IPA” (In-Principle Approval). Under the new system, this same ‘Format I’ data is used to apply for the “Letter of Comfort” (LoC) or directly for the “Grant of Clearance” (GoC). The data points (Identity, Land, Crop, Bank) remain exactly the same, only the approval name has changed.
Step-by-Step Application Process
STEP 1: Bank Sanction
Approach your bank with your DPR and land documents. Get the Loan Sanction Letter.
STEP 2: Online Application (IPA)
Apply on the NHB online portal. Pay the processing fee (approx. ₹6,000 for projects up to 10 Lakhs, varies for larger).
STEP 3: Letter of Intent (LOI)
If documents are correct, NHB issues an “In-Principle Approval” (IPA) or LOI. Only now can you start construction.
STEP 4: Construction
Hire your vendor and build the polyhouse. Ensure you use quality materials (B-Class GI pipes) as per NHB technical standards.
STEP 5: Joint Inspection (JIT)
Once completed, a Joint Inspection Team (JIT) comprising bank officials, NHB officers, and state agriculture officers will visit your farm. They verify the structure matches the Detailed Project Report (DPR).
STEP 6: Release of Funds
If the JIT report is positive, the subsidy is released to your bank.
Why 40% of Applications Get Rejected (Safety Checklist)
Getting the subsidy isn’t just about filling out a form; it is about following a strict timeline. The government rejects nearly half of all applications due to technical errors. Here are the top 5 mistakes farmers make:
1. The “Premature Construction” Mistake (Most Common)
- The Mistake: Many farmers get excited, take a personal loan, and build the polyhouse before getting approval, thinking they will claim the subsidy later.
- The Rule: You cannot start construction until the NHB issues a “Letter of Intent” (LOI). If the inspection team sees an already standing structure during their first visit (or sees old satellite imagery proving it was built earlier), your application is instantly rejected.
- The Fix: Apply first. Get the LOI. Then start building.
2. The “DPR vs. Reality” Mismatch
- The Mistake: Your “Detailed Project Report” (DPR) says you will build a Naturally Ventilated Polyhouse with Rose cultivation, but on the ground, you built a Net House with Vegetables because it was cheaper.
- The Rule: The Joint Inspection Team (JIT) checks the site against the paper. A deviation in structure type or crop plan without prior written approval leads to rejection.
- The Fix: Ensure your DPR reflects exactly what you intend to build. If plans change, inform the board before construction.
3. The “Lease Period” Loophole
- The Mistake: Creating a lease agreement for 5 or 7 years on leased land.
- The Rule: Polyhouse structures have a long lifespan. Most subsidy guidelines require a registered lease deed for a minimum of 10 to 15 years. A shorter lease signals to the government that the project might be abandoned early.
- The Fix: Ensure your lease deed is registered (not just notarized) and is valid for at least 15 years.
4. Bank Loan Sanction Errors
- The Mistake: Applying for the subsidy without a proper term loan.
- The Rule: Most major subsidies (like NHB) are Credit-Linked. This means you must have a Term Loan sanction letter from a nationalized or scheduled bank. You cannot self-finance 100% of the project and ask for cash back.
- The Fix: Secure a bank loan for at least 50-75% of the project cost before applying.
5. Improper Bills and GST Invoices
- The Mistake: Buying materials from local fabricators who give “kacha bills” (handwritten receipts) to save tax.
- The Rule: To claim lakhs in government money, every steel pipe and plastic sheet must have a proper GST Invoice from a legitimate company.
- The Fix: Only buy from registered vendors and keep every single invoice filed safely.
Frequently Asked Questions
Q1: How much subsidy can I get for 1 acre polyhouse?
Answer: You can get a subsidy of 50% of the project cost under the National Horticulture Board (NHB) scheme. For a standard 1-acre project costing ₹35 Lakhs, the subsidy amount is approximately ₹17.5 Lakhs. Some states (like Haryana) offer an additional top-up, taking the total subsidy up to 65%.
Q2: Can I apply for a subsidy if I don’t have a bank loan?
Answer: No, for most major central schemes like NHB, the subsidy is Credit-Linked. This means you must sanction a Term Loan from a nationalized or scheduled bank first. You cannot self-finance the entire project and claim the subsidy later.
Q3: Is the polyhouse subsidy given before or after construction?
Answer: The subsidy is back-ended. This means you must first spend the money (via bank loan and your margin) to build the structure. Once the project is completed and inspected by the Joint Inspection Team (JIT), the subsidy is released to your bank account to adjust against the loan.
Q4: Can I get a subsidy on leased land?
Answer: Yes, you can get a subsidy on leased land, provided you have a Registered Lease Deed for a minimum period of 10 to 15 years (varies by scheme). A simple notarized agreement on stamp paper is usually rejected by the NHB.
Q5: How long does it take to get the subsidy money?
Answer: The process typically takes 6 to 12 months. This includes the time for IPA (In-Principle Approval), construction, JIT inspection, and final fund release. Farmers should have enough working capital to manage EMI payments during this waiting period.
Q6: What is the age limit for applying for a polyhouse subsidy?
Answer: There is generally no specific upper age limit for the subsidy itself, but banks may have age restrictions (usually 18 to 70 years) for sanctioning the required Term Loan.
Q7: Can I build a Net House instead of a Polyhouse and still get a subsidy?
Answer: Yes, subsidies are available for Shade Net Houses as well, but the cost norms are lower. For example, the allowable project cost for a Net House is roughly ₹710/sqm, whereas, for a Polyhouse, it is ₹844/sqm. The 50% rule applies to these respective caps.
Conclusion: How to Start Today
Getting a polyhouse subsidy is a slow process (6-12 months), but the financial relief is worth the wait. The secret is to follow the timeline strictly: Bank -> NHB -> Construction.
Ready to start your application?
- STEP 1: Get your costs right. Read our Polyhouse Cost Breakdown.
- STEP 2: Choose the right crop for the DPR. Read Top 5 Profitable Crops.
- STEP 3: Consult an expert to avoid rejection.
FarmAtma Pro Tip
“Don’t let a paperwork error cost you ₹20 Lakhs.” Writing a DPR that aligns with both Bank standards and NHB guidelines is difficult. Most rejections happen because the Financial Feasibility stats in the DPR don’t make sense to the bank manager.
Need a Bank-Ready DPR? We create custom Project Reports approved by agriculture experts.
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