The government has allotted a corpus of Rs 5000 crore to set up a dedicated ‘micro irrigation fund’ by Nabard under the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY). The two tranches of allocation of Rs 2000 crore and Rs 3000 crore respectively will be utilized during 2018-19 and 2019-20. 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. The lending rate 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. The total financial implication on interest subvention comes to about Rs 750 crore. States may access MIF for innovative integrated projects, including projects in the public-private partnership (PPP) mode and 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.
