Micro-Irrigation Fund gets Rs 5 cr corpus

Aiming to minimise fertiliser and nutrient loss and increase water efficiency, the Cabinet Committee on Economic Affairs (CCEA) chaired by the Prime Minister Narendra Modi on Wednesday 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).

The allocation of Rs 2,000 crore and Rs 3,000 crore will be utilised during 2018-19 and 2019-20 respectively. NABARD will extend the loan to State Governments during this period, the CCEA said.

Borrowings from NABARD shall be paid back in seven years, including a 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.

The cost shall be met from the ongoing scheme of PMKSY-PDMC by amending the existing guidelines.

The total financial implication on interest subvention comes to about Rs 750 crore.

The dedicated MIF is aimed at supplementing the efforts of Per Drop More Crop Component (PDMC) of PMSKY in an effective and timely manner. With the additional investment for micro-irrigation accessing MIF, innovative composite/commodity/community/cluster based micro-irrigation projects/proposals may bring about 10 lakh ha under the PMSKY.

The Fund will facilitate States to mobilise resources for their initiatives, including additional (top up subsidy) in the implementation of PMKSY-PDMC to achieve the annual target of about 2 million ha/year during the remaining period of 14th Finance Commission under Per Drop More Crop Component of PMKSY as recommended by the Group of Secretaries.

The government said the states may access MIF for innovative integrated projects, including projects in the Public Private Partnership (PPP) mode and also for incentivising micro-irrigation through an additional (top up) subsidy over and above the one available under PMKSY-PDMC Guidelines and for covering additional areas. It should not be a substitute for State's share in PMKSY-PDMC.

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.

An Advisory Committee is also proposed to be constituted to provide policy direction and ensure effective planning, coordination and monitoring along with a Steering Committee for examining and approving the Projects/proposals from State Governments (total cost, eligible loan amount to the State and phasing), coordination and monitoring to ensure time-bound implementation of the assisted projects/proposals within approved cost and phasing.