New Delhi: In a major decision aimed at giving a fillip to micro-irrigation, 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 agriculture production and farmers income.
Boost to micro-irrigation as Govt okays Rs 5K cr fund
According to government officials, 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 coverage of only 10 million hectares as against the potential of 70 million hectares.
The setting up of a dedicated "Micro Irrigation Fund" (MIF) with NABARD would be a part of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY).
"An allocation of Rs 2,000 crore has been made for this fiscal while Rs 3,000 crore has been earmarked for 2019-20 fiscal. NABARD will extend the loan to state governments during this period," said Union Minister Ravi Shankar Prasad while briefing reporters about the decisions taken at Cabinet meeting.
"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," Prasad 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," the minister said.
The dedicated fund would supplement the efforts of PMKSY programme and help bring about 10 lakh hectares under micro-irrigation. The fund would 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 hectares per year during the remaining period of 14thFinance Commission.
The states might access this fund for innovative integrated projects, including projects in the public-private partnership (PPP) mode and also for incentivising micro-irrigation.
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.
The government expects that the states which are lagging behind in adoption of micro-irrigation would also be encouraged to take advantage of the fund for incentivising farmers as being done by the good performing states.
The task force on micro-irrigation had estimated a potential of 69.5 million hectare under micro-irrigation, whereas the area covered so far is only about 10 million hectare.
Further, the Group of Secretaries in 2017, emphasised on target of 10 million hectare under micro-irrigation over the next 5 years, which would require an additional annual coverage of about 1 million hectare compared to the present pace of implementation.