Tractor Subsidy 2026: SMAM Rates and Your State Scheme

The tractor and farm equipment subsidy most farmers are looking for is the Sub-Mission on Agricultural Mechanization (SMAM): the Centre and your state pay 50% of a machine's cost for small and marginal, SC/ST, women and North-East farmers and 40% for others, up to a cap for each machine. You do not apply to Delhi; you apply through your state agriculture department's portal during its application window, and the subsidy is paid by DBT.

All figures below are from the revised SMAM guidelines (2025) and a PIB backgrounder of July 2026, and are stated as of October 2026. SMAM is active and runs as a centrally sponsored scheme under the Rashtriya Krishi Vikas Yojana (RKVY). States can choose which machines to fund each year and may add their own top-up, so your state's notice is the final word.

Who it applies to

• Individual farmers buying a machine for their own use.
• Rural entrepreneurs, FPOs, SHGs, cooperatives and panchayats setting up Custom Hiring Centres (CHCs) or Farm Machinery Banks.
• Preference for small and marginal farmers, women, SC/ST farmers and North-Eastern and Himalayan regions. The PIB note says 30% of SMAM funds are earmarked for women farmers.

What support is available

Tractor and power tiller caps

The guidelines say expensive machines such as tractors above 40 HP and combine harvesters should mainly be promoted through Custom Hiring Centres, and individual ownership of them can be capped at 25% of the machine budget. So a small farmer is far more likely to get a 20-40 HP tractor or a power tiller sanctioned than a 50 HP tractor.

Worked example: subsidy plus a tractor loan

A small farmer buys a 2WD, 35 PTO HP tractor priced at ₹6,50,000.

• 50% of cost: ₹3,25,000, but the cap is ₹3,00,000, so the subsidy is ₹3,00,000
• Farmer's share: ₹6,50,000 − ₹3,00,000 = ₹3,50,000
• If the whole share is borrowed at an illustrative 10% for 5 years: EMI ₹7,436, total interest about ₹96,188

A general-category farmer buying the same tractor:

• 40% of cost: ₹2,60,000, capped at ₹2,40,000, so the subsidy is ₹2,40,000
• Share: ₹4,10,000; at the same 10% for 5 years, EMI ₹8,711, total interest about ₹1,12,677

Two practical points. First, many states credit the subsidy by DBT after purchase and verification, so you may need to pay or finance the full price until it arrives; ask your dealer and bank how they handle this. Second, tractor loan rates and down-payment rules vary by lender. Try your own numbers in the EMI calculator, and compare a dedicated tractor loan with your Kisan Credit Card limit.

Documents usually required

• Aadhaar and an Aadhaar-seeded bank account (for DBT)
• Land records (7/12, khatauni, jamabandi or your state's equivalent)
• Caste certificate for SC/ST rates; small/marginal farmer certificate where the state asks
• Passport photo and mobile number
• Dealer quotation from an empanelled manufacturer, and the tax invoice after purchase
• Soil Health Card: the guidelines say it may be needed; if you don't have one, a sample can be tested

How to apply: the official route

1. Find your state's portal. Search your state agriculture department's website for "farm machinery subsidy" or "SMAM". Examples include MahaDBT in Maharashtra and iKhedut in Gujarat. States without their own portal use agrimachinery.nic.in.
2. Watch for the application window. States open applications for a limited period, often once a year, and only for the machines in that year's plan.
3. Register and apply with Aadhaar, land and bank details, choosing the machine type.
4. Selection. If applications exceed the target, the 2025 guidelines tell states to use an online lottery rather than first-come, first-served. Check the selection list on the portal.
5. Buy only after approval. Purchase from a manufacturer empanelled by your state, at a price you can negotiate, within the time allowed in your sanction letter. Buying before approval can make you ineligible.
6. Verification. Machines costing ₹1 lakh or more are geo-referenced, and self-propelled machines such as tractors must carry a telematics kit. An officer verifies the machine and invoice.
7. Subsidy by DBT to your Aadhaar-seeded bank account.

Tracking your application

Use the application ID on your state portal, which shows stages such as applied, selected, pre-sanction, purchase uploaded, verified and paid. If the subsidy is approved but not credited, check that your bank account is active and seeded with Aadhaar.

Common problems and fixes

How to complain

Start with the block or district agriculture officer in writing with your application ID. Then use your state's grievance portal or chief minister's helpline, and finally CPGRAMS (pgportal.gov.in), choosing the Department of Agriculture and Farmers Welfare.

Beware the fake "PM Kisan Tractor Yojana"

PIB Fact Check has said the central government runs no scheme called "PM Kisan Tractor Yojana", and websites using that name have been flagged as phishing sites that collect farmers' details and "registration fees". Real tractor subsidies come only through SMAM and state schemes on government portals ending in .gov.in or .nic.in. Never pay an agent to get you selected.

For other government credit options, see government business loan schemes and the interest subvention scheme for KCC loans.

Key takeaways

• SMAM pays 50% (SC/ST, small and marginal, women, NE) or 40% (others) of machine cost, up to machine-wise caps.
• A 20-40 PTO HP 2WD tractor carries a cap of ₹3 lakh at 50% and ₹2.4 lakh at 40%.
• Apply only through your state agriculture portal or agrimachinery.nic.in during the window; oversubscribed schemes use a lottery.
• Buy only after approval, from an empanelled manufacturer; the subsidy comes by DBT after verification.
• There is no "PM Kisan Tractor Yojana"; ignore sites charging fees.