New Delhi: The Union Cabinet on Wednesday approves corpus of Rs .5,000 crore for setting up of a dedicated “Micro Irrigation Fund” (MIF) with NABARD under Pradhan MantriKrishiSinchayeeYojana (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. Borrowings from NABARD shall be paid back in 7 years including the grace period of two years, a government release said.
The lending rate under MIF has been proposed at 3 percent 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 release said..
States may access MIF for innovative integrated projects, including projects in the Public Private Partnership (PPP) mode and also for incentivizing 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.
The Cabinet also proposed to constitute an Advisory Committee to provide policy direction and ensure effective planning.
“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,” government said.