To boost agriculture production and farmers income. The fund has been set up under National Bank for Agriculture and Rural Development (NABARD), which will provide this amount to States on concessional rate of interest to promote micro-irrigation, which currently has a coverage of only 10 million hectares as against the potential of 70 million hectares. Government has approved a dedicated Rs 5,000-crore fund to bring more land area under micro-irrigation as part of its objective
“The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi has approved an initial Corpus of Rs 5,000 crore for setting up of a dedicated ‘Micro Irrigation Fund’ (MIF) with NABARD under Pradhan Mantri Krishi Sinchayee Yojana (PMKSY),” officials said. An allocation of Rs 2,000 crore has been made for this fiscal while Rs 3,000 crore has been earmarked for the 2019-20 fiscal. NABARD will extend the loan to State Govern-ments during this period.
“Borrowings from NABARD shall be paid back in seven years including the grace period of two years. The lending rate under MIF has been proposed at 3 per cent lower than the cost of raising the fund by NABARD,” officials further added.
This cost would be met from the ongoing scheme of PMKSY-PDMC (per drop more crop component) by amending the existing guidelines. “The total financial implication on interest subvention comes to about Rs 750 crore,” according to the official statement.
The dedicated fund would supplement the efforts of PMKSY programme and help bring about 10 lakh hectares under micro-irrigation.
The fund will facilitate States to mobilize resources for their initiatives, including additional (top up subsidy) in implementation of PMKSY-PDMC to achieve the annual target of about 2 million hectares per year during the remaining period of 14th Finance Commission.
The States might access this fund for innovative integrated projects, including projects in the Public Private Partnership (PPP) mode and also for incentivizing micro irrigation. Farmers Producers Organization (FPO)/Cooperatives/State Level Agencies can also access the funds with state government guarantee or equivalent collateral. Farmers Co-operatives may access this fund for innovative cluster based community irrigation projects.
