Subsidy Stacking & Find Your Real Net Cost

Subsidy stacking is claiming more than one subsidy or grant against the same capital asset — for example a central scheme plus a state top-up plus a flat district grant on one drip system. Each subsidy has its own rate, cap and rule for which cost it applies to, so the order and the ceilings decide your real out-of-pocket figure. This tool applies them in the correct order and shows the net capital cost that results.

Net cost = gross cost − the sum of all stacked subsidies, where each subsidy is applied in order and capped. The formula per step is: base = gross (for gross-type subsidies) or the running balance (for net-type), raw = base × rate (or a flat amount), applied = min(raw, cap, remaining balance), and the running balance falls by that amount. The final running balance is your net out-of-pocket cost.

Because some subsidies are calculated on the gross sticker cost while others are calculated on the cost remaining after earlier subsidies. A 15% state top-up applied to the net balance is worth far less than 15% of the gross. To keep the maths sane and aligned with most stacking rules, this tool applies all gross-type schemes first, then the net-type schemes — so a top-up correctly works on what is left.

The effective subsidy percent = total subsidy ÷ gross cost × 100. It is the single number that tells you how much of the asset is actually being covered once caps and the apply-to order are accounted for. A stack of a 55% capped central subsidy and a 15% net top-up rarely lands at 70% — the caps and the net basis usually pull the effective figure lower, which is exactly why you should compute it rather than add the headline rates.

When the calculated amount exceeds the subsidy's ceiling, the tool applies only up to the cap and marks that step as capped (the bar is hatched in the waterfall). Cost above the ceiling is yours to fund. For example, a 55% PMKSY drip subsidy capped at ₹90,000 on a ₹2,00,000 system delivers ₹90,000, not ₹1,10,000 — so the effective rate on that step is 45%, not 55%.

Payback = capital cost ÷ annual net benefit. The tool shows it twice: on the gross cost and on the net (subsidised) cost. Because subsidies shrink the cost you actually financed, the net payback is shorter. For a ₹1,40,000 drip returning ₹38,000/year, gross payback is about 3.7 years; if subsidies cut the net cost to ₹50,000, payback drops to about 1.3 years — the figure that should drive the decision.

It ships presets for drip irrigation, solar pumps, polyhouses, cold storage and machinery, with representative subsidies: PMKSY drip (smallholder and other), PM-KUSUM solar pump, MIDH/NHM polyhouse and cold storage, SMAM machinery, a state net top-up, a flat interest-subvention equivalent and a flat district grant. You can edit the cost and toggle any combination of subsidies to match your own situation.

No — the embedded rates and caps are representative figures drawn from typical Indian agricultural capital-subsidy schemes, included so you can model the stacking logic. They vary by state, year, category and unit cost. Use the tool to understand the order, the caps and the net effect, then confirm the current rate, ceiling and eligibility for each scheme with your line department before you commit.

Yes. Flat grants (a fixed rupee amount) and percent subsidies stack the same way: each is applied in order against its base and floored so the net cost never goes below zero. A flat district grant applied to the gross reduces the sticker; a flat interest-subvention equivalent applied to the net reduces the financed balance. The waterfall shows each slice peeling off so you can see the contribution of every scheme.

From the farmer's point of view, a subsidy that applies to the gross cost is worth more than the same rate applied to the net, because the gross is the larger base. You usually cannot choose — the scheme defines its basis — but knowing which is which explains why the headline rates don't simply add up, and helps you size the asset to fully use each cap before a net-basis top-up shrinks.

Only up to each cap. Below the ceiling, a percent subsidy scales with cost; above it, extra cost is unsubsidised, so the effective percent falls as the asset grows. The sweet spot is sizing the asset to fully use each cap without pushing large amounts of cost into the unsubsidised zone. The tool flags capped steps so you can see where that ceiling bites.

Three reasons: caps limit individual subsidies to a ceiling, net-type subsidies work on the shrinking balance rather than the gross, and no subsidy can take the cost below zero. Together these mean a 55% + 15% stack rarely reaches 70% effective. Computing total subsidy ÷ gross gives the honest figure, which is what you should plan and budget against.