Long Term Irrigation Fund

The Government of India has launched the Long Term Irrigation Fund (LTIF) in collaboration with the National Bank For Agriculture And Rural Development (NABARD), starting with an initial corpus of 20,000 crore rupees. This initiative aims to fund and expedite the completion of incomplete major and medium irrigation projects. The LTIF is part of the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), supported by the Ministries of Water Resources, River Development, and Ganga Rejuvenation (MoWR, RD & GR).

NABARD, the National Water Development Agency (NWDA), and the Union Government have signed a revised Memorandum of Agreement to fund irrigation projects under PMKSY via LTIF.

Objectives

The primary objective of LTIF is addressing the perennial irrigation water crisis in rural India, aiming to bridge the resource gap and facilitate the completion of 99 prioritized irrigation projects from 2016 to 2020. The initiative targets utilizing 76.03 lakh hectares of irrigated land to transform the agricultural sector. Completing these projects is expected to generate immediate wage and employment opportunities for residents of agricultural regions, ultimately enhancing their livelihoods.

LTIF Corpus

The main corpus of LTIF comes from budget allocations by the Government of India and extra resources through fully serviced bonds, raised directly by NABARD or borrowed. GoI will annually create a budgetary provision for the bonds’ entire duration.

Sanction of Loans

NABARD will sanction LTIF loans to state governments and the NWDA in a programmatic mode, based on recommendations from the Technical Advisory Committee (TAC), and the grant of investment fund clearance by the Planning Commission or Government of India. Projects must meet statutory requirements and clearances related to the environment, forest, and other sectors. Only when MoWR/Mission recommends will NABARD forward proposals to the Project Sanctioning Committee (PSC) for further action.

Interest Rate

The Ministry of Finance, GoI, allows NABARD to access cost-free funds annually so that the lending interest rate under LTIF remains around 6%, as approved by the Union Cabinet.

Monitoring

Regional offices of the Central Water Commission (CWC) will monitor the physical progress and project implementation biannually, performing joint appraisals with respective state governments at the field level.

Repayment

Loan assistance under the LTIF is available for up to 15 years, with a 3-year moratorium period. NWDA can repay loans in quarterly installments, whereas state governments repay in annual installments.

Significance

LTIF is pivotal in bridging the gap between irrigation potential and actual usage, facilitating additional irrigation potential. It also supports the Union government's vision of doubling farmers’ income by 2022, with assured irrigation being essential for this target.

Implementation

The Government of India proposes the following guidelines for implementing the LTIF scheme:

For projects above Rs.2000 crore - Managed by a High-Level Empowered Committee including GoI Ministers (Finance, WR, RD & GR, Agriculture, and Rural Development) and the Deputy Chairman of Niti Aayog.
For projects between Rs.1000 crore and Rs.2000 crore - Managed by a Council with the CEO of Niti Aayog and Secretaries of GoI (WR, RD & GR, Agriculture, Rural Development, Finance) and NABARD Chairman.
For projects up to Rs.1000 crore - Managed by a Mission headed by an Additional Secretary/Special Secretary from MoWR, RD & GR.

Explore additional governmental documentation regarding input tax credit provisions that might be relevant to funding processes. Moreover, the advance tax payment methods could influence available financial planning strategies for states involved.

Find insights related to loan-based financing and required registrations, such as company registration in Rajkot, as supplementary supportive actions for state departments.

Understanding consequences of not filing ROC might impact the regulatory compliance aspect of the implementation framework, pivotal for LTIF loan processing.

Those in the commission for rural development might find relevant intersections between LTIF projects and broader rural development initiatives.

Lastly, departments can learn from expansive strategies, including bookkeeping services essential to verify compliance with economic strategies aligned with LTIF's goals.

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Frequently Asked Questions

Common questions about Long Term Irrigation Fund LTIF.

The LTIF is a dedicated fund set up by the Government of India with an initial corpus of 20,000 crore rupees. It has been instituted in NABARD as a part of the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) to fund and accelerate the implementation of incomplete major and medium irrigation projects.

The main objectives of the LTIF are to address the perennial irrigation water crisis in rural India, bridge the resource gap, facilitate the completion of 99 prioritized irrigation projects between 2016-2020, and bring 76.03 lakh hectares of land under irrigation. This is expected to transform the agricultural sector and generate employment opportunities.

The primary corpus of the LTIF will be raised through budget allocation from the Government of India, extra resources through fully serviced bonds issued by the Government of India, or by direct borrowing by NABARD.

NABARD will sanction LTIF loans to State governments and NWDA based on recommendations from the Technical Advisory Committee (TAC) and investment fund clearance by the Planning Commission or the Government of India. The proposals will also be reviewed by NABARD's Project Sanctioning Committee and a sub-committee of its Board.

The Ministry of Finance will provide cost-free funds to NABARD to maintain the lending interest rate under the LTIF at around 6% as approved by the Union Cabinet.

The physical progress and implementation of the projects will be monitored once every six months by the regional offices of the Central Water Commission (CWC) and respective state governments.

Loan assistance under the LTIF will be provided for a period of up to 15 years, with a moratorium period of 3 years. NWDA can repay the loan in quarterly installments, while State governments can repay in annual installments.

The LTIF helps in bridging the gap between irrigation potential created and actual utilization, as well as creating additional irrigation potential. This supports the Union government's vision of doubling farmers' income by 2022, as assured irrigation is a crucial prerequisite.

For projects above Rs. 2000 crore, a High Level Empowered Committee comprising ministers and the Deputy Chairman of NITI Aayog will oversee implementation. For projects between Rs. 1000 crore and Rs. 2000 crore, a Council comprising Secretaries of various ministries and the Chairman of NABARD will oversee implementation. For new projects up to Rs. 1000 crore, a Mission led by the Additional Secretary/Special Secretary of the Ministry of Water Resources, River Development, and Ganga Rejuvenation will oversee implementation.

NABARD plays a crucial role in the LTIF. It has jointly signed a revised Memorandum of Agreement with NWDA and the Union Government for funding irrigation projects under PMKSY through the LTIF. NABARD will sanction loans to State governments and NWDA, and its regional offices will monitor the physical progress of the projects.