Cabinet Committee on Economic Affairs (CCEA) has approved on setting up of Micro Irrigation Fund (MIF) with NABARD under Pradhan Mantri Krishi Sinchayee Yojana (PMKSY). PM Narendra Modi presided over this meeting and an initial fund of Rs. 5,000 crore is approved.
CCEA Approval would result in PAN India Coverage. All the states who are regularly lagging behind other states in implementation of Micro Irrigation would be encouraged to utilize MIF funds. In addition to this, several new community driven and innovative projects of States will ensure additional coverage of Micro-Irrigation.
All the states can utilize MIF Funds for new innovative projects to bring more land under micro irrigation.
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.
Benefits of Setting Up of Micro Irrigation Fund (MIF)
The benefits of setting up of Micro Irrigation Funds are as follows:-
- This dedicated fund will supplement Per Drop More Crop Component (PDMC) of PMKSY in an efficient and timely manner.
- 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.
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.
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.