The Cabinet Committee on Economic Affairs chaired by the Prime Minister, Narendra Modi 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.
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
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 Mantri Krishi Sinchayee Yojana in an effective and timely manner.