CCEA approves Rs 5,000 cr micro-irrigation fund under PMKSY

Published Date - 21 May 2018 07:21:15 Updated Date - 21 May 2018 07:21:51

New Delhi, May 16 (PTI) The government today approved a dedicated Rs 5,000 crore fund to bring more land area under micro-irrigation as part of its objective to boost agriculture production and farmers income .An allocation of Rs.20 billion has been made for 2018-19 while Rs.30 billion has been earmarked for 2019-20. NABARD will extend the loan to state governments 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 three per cent 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. The total financial implication on interest subvention comes to about Rs.7.5 billion.

Micro Irrigation Fund (MIF) Setup with NABARD under PMKSY

The new funds for micro irrigation will possess the following features:-

  • CCEA has approved setting up of dedicated Micro Irrigation Fund (MIF) with NABARD under PMKSY.
  • Govt. has allocated a budget of Rs. 2,000 crore for 2018-19 and Rs. 3,000 crore for 2019-20. NABARD will extend the loan to state govt. during this period.
  • Govt. shall repay the funds from NABARD in 7 years including 2 years grace period.
  • Lending Rate under MIF is proposed at 3% lower than cost of NABARD fund.

PMKSY-PDMC guidelines will be ammended to meet the cost. Financial Implication on Interest Subvention is around Rs. 750 crore.

Objectives of Micro Irrigation Fund (MIF) with NABARD

To achieve this target, govt. must focus on effective utilization of Funds from PMKSY-PDMC and MIF in the following manner:-

  • States will be facilitated to mobilize the resources by taking special and innovative projects to increase the scope of Micro-Irrigation.
  • Incentivize Micro Irrigation by making amendment in the existing provisions of PMKSY-PDMC. This will encourage farmers to install micro irrigation systems.

India has the potential of 69.5 million hectares land to be brought under micro irrigation but only 10 million hectares (14%) land is covered till date. As per the suggestions of Group of Secretaries 2017, govt. must bring an additional 10 million hectares coverage over next 5 years. For this to happen, there must be an additional coverage of 1 million hectares per annum in addition to the current pace of implementation.

Micro Irrigation Fund (MIF) Implementation Strategy

Micro Irrigation Fund (MIF) can be utilized by the states for innovative projects either under Public Private Partnership (PPP) mode to incentivize micro irrigation by an additional (top up) subsidy. This fund will cover additional areas and also this will not serve as a substitute of State’s share in PMKSY-PDMC.

Even various Farmers Producers Organization (FPO) / Cooperatives / State Level Agencies can utilize these funds after guarantee from State government. Farmers Co-operatives can use MIF in other innovative cluster based Community Irrigation Projects.

Govt. will set up an advisory committee to provide policy directions and ensure effective planning, coordination and monitoring. Moreover, govt. will also set up a Steering Committee to examine and approve Projects / Proposals from State govt. (cost & loan amount of States), maintaining coordination and monitoring for time bound implementation.

Benefits of Setting Up of Micro Irrigation Fund (MIF)

The benefits of setting up of Micro Irrigation Funds are as follows:-

  1. This dedicated fund will supplement Per Drop More Crop Component (PDMC) of PMKSY in an efficient and timely manner.
  2. Additional investment for composite / commodity / community / cluster based micro irrigation projects may bring out additional 10 lakh hectares.

Dedicated fund from NABARD will mobilize resources for top-up subsidy in implementation of PMKSY-PDMC to achieve an annual target of 2 Million ha / year.

Leave Your Comment Here