Published on 16/05/2018 5:22:55 PM | Source: Dion Global Solutions Ltd

Cabinet sanctions Rs 5000 cr for Micro Irrigation Fund

The Cabinet Committee on Economic Affairs (CCEA) on Wednesday 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 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,” according to a Cabinet statement. The lending rate under MIF has been proposed at 3 per cent 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 MantriKrishiSinchayeeYojana in an effective and timely manner.

The Fund will facilitate States to mobilise resources for theirinitiatives, including additional (top up subsidy) in implementation of PMKSY-PDMC toachieve 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. 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.