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Custom Hiring Centre 2026 – PM Yojana Subsidy & Business Model

Custom Hiring Centre 2026 is one of the most lucrative and government-subsidised agri-business opportunities available to rural entrepreneurs, agriculture graduates, FPOs, and progressive farmers in India today. Under the Sub-Mission on Agricultural Mechanization (SMAM) — launched by the Ministry of Agriculture & Farmers Welfare — entrepreneurs can set up a farm machinery rental centre and receive 40–80% financial assistance on machinery purchase. With over 75,000 Custom Hiring Centres (CHCs) operating across India, and mechanization levels still at just 40–45% nationally, the demand for affordable machinery rental far exceeds current supply. This guide covers every detail — from the SMAM subsidy structure and eligibility criteria to step-by-step application on agrimachinery.nic.in, machinery selection, investment breakdown, and the income and profit model for a viable CHC business in 2026.

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What Is a Custom Hiring Centre (CHC) in India?

A Custom Hiring Centre (CHC) is a farm machinery rental hub established under the SMAM scheme from which farmers can hire agricultural equipment — tractors, rotavators, combine harvesters, paddy transplanters, seed drills, sprayers, threshers, and more — on an hourly or per-acre basis, paying only for the time they use the machine. This model eliminates the need for small and marginal farmers to buy expensive machinery outright, dramatically reducing their cost of cultivation. India’s average farm power availability stands at just 3.045 kW/hectare, and with over 85% of farmers operating on small (1–2 ha) or marginal (under 1 ha) holdings, individual machinery ownership is simply unaffordable for the majority.

CHCs bridge this gap. By 2024–25, the Government of India established 26,662 CHCs under SMAM alone, with total CHCs across government and private initiatives exceeding 75,000. Each CHC typically caters to 4–5 surrounding villages, offering 8–15 types of machinery. The scheme has been instrumental in reducing per-hectare cultivation costs by 15–30% in high-mechanization areas and improving timeliness of critical farm operations like sowing and harvesting — directly boosting farm incomes.

SMAM Subsidy for CHC – Category-Wise Breakdown 2026

The Sub-Mission on Agricultural Mechanization (SMAM) is a Centrally Sponsored Scheme providing financial assistance for CHC setup. Subsidy rates are differentiated by applicant category, machinery type, and state. Here is the complete 2026 structure:

State-specific examples (2025–26): In Haryana, the maximum subsidy for CHC is 40% up to Rs.4 lakh, while FMBs get 80% up to Rs.8 lakh. For a tractor, the state provides up to Rs.3.40 lakh subsidy. In Bihar, SMAM subsidies are provided in 9 priority districts (Patna, Bhojpur, Kaimur, Buxar, Nalanda, Rohtas, Nawada, Aurangabad, Gaya) for Kharif 2025–26. States like Maharashtra run SMAM tractor subsidy registration from December to February. Check your state agriculture department portal for current-year targets and application windows.

Eligibility – Who Can Set Up a Custom Hiring Centre?

SMAM’s CHC component is designed with broad eligibility to cover the full spectrum of rural entrepreneurs and farming communities. The 3 main applicant categories and their specific requirements are:

• 👨‍🌾 Individual Farmers / Progressive Farmers: Must be an Indian resident with valid land records (own or leased), Aadhaar-linked bank account for DBT, and a caste certificate if applying under SC/ST category. Agriculture graduate or diploma holders get priority in many states. Must register on agrimachinery.nic.in with domicile certificate, date of birth proof, and land documents.
• 🏢 Rural Entrepreneurs (Agri Graduates): Must register with GSTN (GST number) and PAN on the SMAM portal. An agriculture graduate or entrepreneur from a rural background with a business premise can apply independently. Many states offer priority slots to agriculture graduates under state employment-linked schemes running parallel to SMAM. Required documents: GSTN certificate, PAN, domicile certificate, educational qualification certificate.
• 🤝 FPOs / SHGs / Cooperatives / Societies: The group/society must be formally registered. At least 5 registered farmer members must be enrolled on the portal for Component 4/5 (CHC and FMB). The group bank account, president’s photograph, Aadhaar of all members, and land documents of all members are mandatory. FPOs with 500+ members are ideally positioned to run a CHC serving multiple villages efficiently.

Documents Required for Custom Hiring Centre Application 2026

• 🪪 Aadhaar Card – mandatory for all applicants; must be linked to mobile number and bank account for DBT
• 🏦 Bank Account Details – Aadhaar-linked bank account for direct benefit transfer of subsidy amount
• 📜 Land Ownership / Lease Documents – Khatian/Khatauni, 7/12 extract, or registered lease deed
• 📋 Domicile / Residence Certificate – issued by state/district authority
• 📅 Date of Birth Certificate – Class X marksheet, birth certificate, or Aadhaar
• 🎓 Agriculture Graduate Certificate – for entrepreneur applications; B.Sc. Agriculture degree or relevant diploma
• 🪪 Caste Certificate – mandatory for SC/ST applicants to claim higher subsidy rate
• 🏢 GSTN / PAN Certificate – for entrepreneur/company registrations
• 👥 FPO/SHG Registration Certificate – for group applications, along with list of minimum 5 members
• 📸 Passport-size Photographs – of applicant / group president
• 🏗️ Workshed / Storage Premises Details – location proof for CHC machinery parking and maintenance space
• 🏦 Bank Loan Documents – if applying for back-ended subsidy with institutional credit from NABARD/cooperative bank

How to Apply for CHC Subsidy Online – Step-by-Step Process 2026

The Central DBT portal for SMAM applications is agrimachinery.nic.in. Applications can also be submitted through your state agriculture department portal or the nearest Common Service Centre (CSC). Here is the complete process:

1. Check State Target Allocation: Visit agrimachinery.nic.in and check whether your state has allocated targets for CHC applications in 2025–26. Targets are assigned district-wise — only districts with remaining targets accept new applications. Follow your state agriculture department’s advertisement for application opening dates.
2. Register on the Portal: Click on “Register” and select your category — Farmer, Society/FPO/SHG, or Entrepreneur. Farmers register using Aadhaar; entrepreneurs register using GSTN/PAN. After registration, a User ID and Password are assigned for login.
3. Create a CHC Project: After logging in, navigate to SMAM Component 4 or 5 (CHC or FMB). Click “Create Project” and enter: CHC centre address and location, list of machinery you want to purchase (from approved models in the state machinery catalogue), and total project cost.
4. Upload Documents: Upload all required documents in PDF or JPG format — Aadhaar, land documents, bank details, qualification certificates, caste certificate, GSTN/PAN, and group member details (for FPOs/SHGs). A unique Project ID is generated on submission.
5. Government Officer Review: The designated state/district agriculture officer reviews your project online. For group/FPO applications, add at least 5 registered member farmers before submission to avoid rejection.
6. Permit Issued — Purchase Machinery: Once approved, the government officer issues a permit. Download and print the permit. Purchase the approved machinery from an authorised dealer (SMAM-registered manufacturer/dealer as listed on the portal). Collect the invoice, make/model, serial number, engine number, and chassis number.
7. Upload Purchase Documents: Log in and upload the bill of purchase and detailed machinery identification details (serial/chassis numbers). For back-ended subsidy, also upload bank loan documents and loan account details.
8. Physical Verification: A government officer conducts physical verification of the purchased machinery at your CHC location. Ensure all machinery is present and operational at the time of inspection.
9. Subsidy Credited via DBT: After successful verification, the subsidy amount is approved and directly transferred to your Aadhaar-linked bank account through DBT, typically within 30–60 days of physical verification approval.

Which Machinery to Include in Your CHC? – High-Demand Equipment 2026

Selecting the right machinery mix is the single most important decision for CHC profitability. High-demand machinery earns more per hour and stays booked during peak Kharif and Rabi seasons. Here is the recommended machinery selection based on rental income data and demand patterns across India:

Recommended starter pack for a basic CHC (total cost Rs.15–20 lakh before subsidy): 1 tractor (35–50 HP) + rotavator + seed drill + thresher + sprayer. This set covers the full crop cycle for cereal and pulse farmers in most agro-climatic zones and generates year-round income. Adding a paddy transplanter or combine harvester in Year 2 after the initial subsidy benefit accelerates revenue significantly.

Investment, Income & Profit Breakdown – CHC Business Model 2026

Annual income model for a basic CHC: Assuming average rental rate of Rs.750/hour across the machinery fleet, the CHC operates for approximately 1,800–2,200 hours per year across two cropping seasons. Annual gross income: Rs.13–16 lakh. Annual operating expenses — fuel and lubricants (farmer-arranged in many CHC models), operator wages (Rs.8,000–15,000/month), maintenance and repairs (Rs.1–2 lakh), insurance (Rs.50,000–1 lakh), miscellaneous (Rs.50,000) — total Rs.5–7 lakh/year. Net annual income: Rs.7–9 lakh. Payback period on own investment: 2–4 years. A well-run CHC with a combine harvester, renting at Rs.2,000–3,000/hour for 500 hours per season, earns Rs.10–15 lakh from the harvester alone — often recovering the entire CHC investment within a single harvest season.

CHC for FPOs & SHGs – NABARD Financing Model

NABARD has developed a detailed Model Project Report for CHC setup by Farmer Producer Organisations (FPOs), making institutional credit available for CHC establishment. The NABARD model proposes a CHC with a total machinery cost of Rs.20.6 lakh (including a 500 sq. ft. workshed) to serve an FPO with 500+ member farmers across 4–5 villages. The financial viability is confirmed with a positive Net Present Worth (NPW) at 15% discounting factor and a strong Benefit-Cost Ratio.

Key advantages of the FPO-CHC model over individual CHC: (1) Guaranteed customer base — 500+ FPO members are immediate potential hirers, eliminating marketing costs; (2) FPOs receive priority allocation in SMAM target distribution at the state level; (3) NABARD provides institutional credit for the balance amount after subsidy, at concessional interest rates under priority sector lending; (4) machinery can be made available to non-members also to further increase revenue and utilisation rate. For group CHC applications, the bank account of the group (not individual members) must be registered on the portal, and the group president’s photograph and all members’ Aadhaar and land documents are required.

FARMS Mobile App – Connecting Farmers to Custom Hiring Centres

The FARMS (Farm Machinery Solutions) mobile app is a multilingual application developed by the Ministry of Agriculture that connects farmers with nearby CHCs and Farm Machinery Banks. Farmers can search for available machinery by location, check real-time availability and rental rates, and book equipment digitally. For CHC operators, listing your machinery inventory on the FARMS app is highly recommended — it increases your utilisation rate by attracting bookings from farmers beyond your immediate village network. The app is available in Hindi and multiple regional languages, making it accessible to farmers with limited English literacy.

In 2026, the government is also integrating IoT-based real-time monitoring (GPS tracking, usage hours, maintenance alerts) into CHC machinery to improve scheduling efficiency and reduce peak-season shortages — the most persistent challenge limiting CHC profitability. Progressive CHC operators who adopt digital scheduling tools and list on FARMS consistently achieve 20–30% higher machinery utilisation rates than those relying on word-of-mouth booking alone.

Who Should Start a Custom Hiring Centre in India?

• 🎓 Agriculture graduates (B.Sc./M.Sc. Agriculture) seeking rural self-employment — SMAM specifically prioritises agri-graduates for entrepreneur CHC registrations in many states, and several state governments have additional employment-linked subsidies for young agri-entrepreneurs setting up CHCs.
• 👨‍🌾 Progressive farmers with 5+ acres of own land who want to generate off-farm income by pooling machinery investment and offering rental services to 4–5 surrounding villages during the same seasons.
• 🏢 FPOs (Farmer Producer Organisations) with 500+ member farmers — the NABARD model makes CHC setup virtually risk-free for large FPOs with an assured member customer base. The FPO also builds an institutional asset that enhances its balance sheet and creditworthiness.
• 👩‍🌾 Women SHGs in rural areas — women and SHG applicants receive higher subsidy rates (50%) and priority processing. State governments (Bihar, UP, Maharashtra, Odisha) have dedicated quotas for women-led CHCs under SMAM.
• 🚜 Existing tractor owners who already have 1–2 machines and want to formalise and scale their informal machinery rental business by accessing the SMAM subsidy to add 3–5 more implements to their fleet.
• 💼 Rural entrepreneurs with agri-machinery repair/workshop experience — technical know-how for machinery maintenance is a significant competitive advantage that reduces operating costs and extends machinery life.
• 🏛️ Cooperative societies and panchayat-level groups in low-mechanization states (Bihar, Jharkhand, Assam, Odisha) where even a basic CHC with 5–6 machines can serve 500–800 farming households with little to no competition.
• 📦 Agri-input dealers (fertilizer/seed shop owners) looking for a diversified income stream during sowing and harvest seasons — a CHC is a natural complement to an agri-input shop serving the same farmer base.

Custom Hiring Centre vs Farm Machinery Bank – Full Comparison 2026

High-Value CHC & SMAM Terms You Must Know

• 🚜 SMAM (Sub-Mission on Agricultural Mechanization): The flagship Central Government scheme under the Ministry of Agriculture & Farmers Welfare for promoting farm mechanization through subsidized machinery, CHC setup, and capacity building. Launched in 2014–15 and continued under the revised SMAM Operational Guidelines 2025.
• 🏛️ CHC (Custom Hiring Centre): A government-supported farm machinery rental outlet serving 4–5 villages, offering 8–15 types of implements on hourly or per-acre rental basis. Caters to small and marginal farmers who cannot afford individual machinery ownership.
• 🏗️ FMB (Farm Machinery Bank): A larger-scale version of a CHC, typically serving a block/taluka. Eligible for higher SMAM subsidy (up to 80%). Suited for large FPOs, cooperatives, and block-level entrepreneurs with higher capital capacity.
• 🔬 Hi-Tech Hub: A specialized high-productivity machinery centre for high-value crops like sugarcane, cotton, and potato. Supported under a separate SMAM component with its own subsidy structure. Handles large-scale custom operations for contract farming clusters.
• 📱 FARMS App: Farm Machinery Solutions — the Ministry of Agriculture’s multilingual mobile platform connecting farmers to nearby CHCs and FMBs for machinery booking and availability tracking.
• 💳 DBT (Direct Benefit Transfer): The mechanism by which SMAM subsidy is credited directly to the beneficiary’s Aadhaar-linked bank account after physical verification, eliminating intermediaries and ensuring 100% benefit transfer.
• 📊 Utilisation Rate: The percentage of total available machinery-hours actually hired out in a year. Profitability of a CHC is directly proportional to utilisation rate. Peak season (June–July Kharif, October–November Rabi) accounts for 60–70% of annual income — efficient pre-season booking via FARMS app is critical to maximise utilisation.
• 🌾 CRM (Crop Residue Management) Machinery: Equipment like Happy Seeders, Super Straw Management Systems, and rotary slashers for managing paddy and wheat stubble instead of burning. Eligible for separate CRM scheme subsidy (50–80%) in addition to SMAM. Very high demand in Punjab, Haryana, UP post-harvest. CHCs offering CRM machinery earn Rs.1,000–2,000 per acre during October–November.
• 🏦 Back-Ended Subsidy: A subsidy disbursement model where the beneficiary first takes a bank loan to purchase machinery at full cost, and the subsidy amount is credited by the government directly to the loan account after physical verification. Reduces the working capital requirement for CHC setup significantly.
• 📋 Annual Action Plan (AAP): Each state submits an Annual Action Plan to the Ministry specifying district-wise targets for CHC, FMB, and individual machinery subsidy under SMAM. Target allocation determines how many applicants can be approved per district per financial year — making early application critical.

Frequently Asked Questions – Custom Hiring Centre 2026

What is a Custom Hiring Centre (CHC) in India?

A Custom Hiring Centre (CHC) is a farm machinery rental facility set up under the SMAM scheme where farmers hire equipment — tractors, rotavators, seed drills, combine harvesters, sprayers — on an hourly or per-acre basis. Over 75,000 CHCs now operate across India, serving the 85%+ of farmers with small or marginal holdings who cannot afford individual machinery ownership. A single CHC typically caters to 4–5 surrounding villages.

What is the subsidy for setting up a Custom Hiring Centre under SMAM 2026?

Under SMAM 2026, general category beneficiaries receive 40–50% financial assistance on machinery cost for CHC setup. SC/ST farmers, women, small and marginal farmers, and North-East beneficiaries receive 50% or higher. Farm Machinery Banks (FMBs) attract up to 80% subsidy capped at Rs.8 lakh. NER state beneficiaries can receive up to 100% subsidy subject to a Rs.1.25 lakh ceiling per beneficiary. State-specific maximums apply (e.g., Rs.4 lakh for CHC in Haryana).

Who is eligible to set up a Custom Hiring Centre under SMAM?

Eligible applicants include individual farmers, agriculture graduates, rural entrepreneurs (registered with GSTN/PAN), Farmer Producer Organisations (FPOs), Self Help Groups (SHGs), and registered cooperatives/societies. For group applications, at least 5 registered farmer members must be enrolled on the portal. All applicants must have an Aadhaar-linked bank account for DBT and valid land or lease documents.

How much investment is needed to set up a Custom Hiring Centre?

A basic CHC with tractor, rotavator, seed drill, thresher, and sprayer costs Rs.15–20 lakh before subsidy. After 40–50% SMAM subsidy, the out-of-pocket cost reduces to Rs.8–12 lakh. NABARD and cooperative banks provide institutional credit for the remaining amount, making the effective own investment as low as Rs.3–5 lakh. A CHC with a combine harvester costs Rs.37–58 lakh pre-subsidy but can recover its full investment within 1–2 harvest seasons from rental income.

How much income can a Custom Hiring Centre earn per year?

A basic CHC earning an average Rs.750 per hour across its machinery fleet, operating 1,800–2,200 hours per year across Kharif and Rabi seasons, generates Rs.13–16 lakh gross annual income. After operating costs of Rs.5–7 lakh, net annual income is Rs.7–9 lakh. A CHC with a combine harvester earning Rs.2,000–3,000/hour for 500 hours per year can earn Rs.10–15 lakh from harvester rentals alone. Research data shows CHCs with positive Net Present Worth at 15% discounting factor confirm long-term financial viability.

How do I apply for CHC subsidy online under SMAM 2026?

Apply at agrimachinery.nic.in — the Central DBT portal. Register using Aadhaar (farmers) or GSTN/PAN (entrepreneurs). Create a CHC project specifying machinery and centre details, upload all documents, and submit. After government officer approval, a permit is issued. Purchase machinery from SMAM-authorised dealers, upload bills and identification details, undergo physical verification, and receive the subsidy directly via DBT. Applications can also be submitted at the nearest Common Service Centre (CSC).

What is the FARMS mobile app for Custom Hiring Centres?

The FARMS (Farm Machinery Solutions) app is a multilingual mobile app developed by the Ministry of Agriculture that connects farmers with nearby CHCs and Farm Machinery Banks. Farmers can search for available machinery, check rental rates, and book digitally. CHC operators should list their machinery inventory on the FARMS app to increase their utilisation rate and attract bookings from farmers beyond their immediate village network. The app is available in Hindi and multiple regional languages.

What machinery can be included in a Custom Hiring Centre?

A CHC can include any SMAM-approved machinery — tractors, rotavators, seed drills, paddy transplanters, combine harvesters, straw reapers, reaper-binders, threshers, zero-till drills, laser levellers, crop residue management equipment, and sprayers. High-demand machinery like combine harvesters (Rs.2,000–3,000/hour), paddy transplanters (Rs.1,500–2,500/acre), and laser levellers generate the highest rental income. Check the state-approved machinery catalogue on agrimachinery.nic.in for SMAM-eligible models.

Can an FPO set up a Custom Hiring Centre with NABARD financing?

Yes. NABARD has developed a Model Project Report specifically for FPO-run CHCs. An FPO with 500+ members can set up a CHC at Rs.20.6 lakh total cost, receive SMAM subsidy, and finance the balance through NABARD/cooperative bank credit at priority sector lending rates. The FPO’s 500+ member base provides an immediate guaranteed customer pool. FPOs also receive priority target allocation on the SMAM portal and can extend CHC services to non-members to maximise revenue and utilisation.

🔗 Useful Links: SMAM Portal – agrimachinery.nic.in | NABARD – nabard.org | Ministry of Agriculture – agricoop.nic.in

Last Updated: June 2026. This guide is regularly reviewed and updated for accuracy. Bookmark this page for the latest notifications on Custom Hiring Centre subsidy targets, SMAM application windows, and agrimachinery.nic.in portal updates for 2026.

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