The Cabinet Committee on Economic Affairs chaired by the Prime Minister, Shri Narendra Modi 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 utilized during 2018-19 and 2019-20 respectively. NABARD will extend the loan to State Governments during this period. Borrowings from NABARD shall be paid back in 7 years including the grace period of two years.
The lending rate under MIF has been proposed at 3% lower than the cost of raising the fund by NABARD.
This 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 Micro Irrigation Fund would supplement the efforts of Per Drop More Crop Component (PDMC) of Pradhan Mantri Krishi Sinchayee Yojana 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.
The Fund will facilitate States to mobilize resources for their initiatives, including additional (top up subsidy) in an implementation of PMKSY-PDMC to achieve the annual target of about 2 Million ha/year during the remaining period of 14thFinance Commission under Per Drop More Crop Component of PMKSY as recommended by the Group of Secretaries.
The approval shall have Pan India coverage. With the operation of MIF, it is expected that the States which are lagging behind in adoption of Micro Irrigation would also be encouraged to take advantage of the fund for incentivizing farmers as being done by the good performing States. Besides, community-driven and innovative projects to be taken up by the States would bring additional coverage of Micro Irrigation.
About the Micro Irrigation Fund:
‘Micro Irrigation Fund’ (MIF) has been set up with NABARD under Pradhan Mantri Krishi Sinchayee Yojana (PMKSY). An allocation of Rs2,000 crore has been made for this fiscal while Rs3,000 crore has been earmarked for 2019-20 fiscal. NABARD will extend the loan to state governments during this period.
NABARD will provide this amount to states on concessional rate of interest. 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% lower than the cost of raising the fund by NABARD. This cost would be met from the ongoing scheme of PMKSY-PDMC (per drop more crop component) by amending the existing guidelines.
PMKSY is an umbrella scheme incorporating ongoing schemes of the Ministry like Mega Food Parks, Integrated Cold Chain and Value Addition Infrastructure, Food Safety and Quality Assurance Infrastructure, etc. and also new schemes like Infrastructure for Agro-processing Clusters, Creation of Backward and Forward Linkages, Creation / Expansion of Food Processing & Preservation Capacities.