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Union Cabinet approves Rs. 5000 crore fund through NABARD to facilitate irrigation

  • The Union Cabinet under the Pradhan Mantri Sinchayee Yojana (PMKSY) has approved an initial corpus of Rs. 5000 crore for setting up of a 'Micro Irrigation Fund' (IMF) with NABARD.

    A press release by the Ministry of Agriculture and Farmers Welfare detailed that 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. The borrowings are to be returned to NABARD within a period of 7 years including the grace period of two years.

    The lending rate under MIF has been proposed at 3% 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.

    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 subsidy over and above the one available under PMKSY-PDMC. Farmers Producers Organization (FPO), Cooperatives, and State Level Agencies can also access the funds with State Government Guarantee or equivalent collateral.

    An Advisory Committee to provide policy direction and ensure effective planning, coordination and monitoring will also be set up.

    The government stated in the press release, "The Fund will facilitate States to mobilise resources for the initiatives, including additional subsidy in the implementation of PMKSY-PDMC to achieve the annual target of about 2 Million ha/year during the remaining period of 14th Finance Commission under Per Drop More Crop Component of PMKSY as recommended by the Group of Secretaries."