Cabinet okays setting up of Rs 5,000cr micro irrigation fund

The government on Wed­nesday approved a dedicated Rs 5,000 crore fund to bring more land area under micro-irrigation as part of its objecti­ve to boost farm production and farmers income.

The fund has been set up under 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.

“The cabinet committee on economic affairs chaired (CCEA) 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 the Pradhan Mantri Krishi Sinchayee Yojana,” an official statement said.

An allocation of Rs 2,000 crore has been made for this financial year while Rs 3,000 crore has been earmarked for the 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 3 per cent lower than the cost of raising the fund by Nabard,” the statement said.

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,” it said.

The dedicated fund wou­ld supplement the efforts of the PMKSY programme and help bring about 10 lakh he­c­tares under micro-irrigation. The fund will facilitate states to mobilise resources for their initiatives, including additional (top up subsidy) in implementation of PMKSY-PDMC to achieve the annual target of about 2 million hectares during the remaining period of 14th Finance Commission.