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Micro Irrigation Fund

Micro Irrigation Fund

Micro Irrigation Fund

India is an agricultural country and livelihood of the major population of the country depends upon agriculture. Water is a prized resource for the growth and development of agriculture and its overall efficiency. In order to address the issue of water scarcity and make use of the available water resources in a more efficient way, micro-irrigation technology has been installed in the rainfed areas to save water, reduce the usage of fertilisers, labour charges and other input costs, and improve the fertility of the soil. The Department of Agriculture Cooperation & Farmers Welfare (DAC&FW) proposed a scheme on Micro-irrigation to improve the drip and sprinkler irrigation method. Later on, it was launched as National Mission on Micro-irrigation scheme in 2010-2011 and was included as a major component of the National Mission for Sustainable Agriculture (NMSA).

Objectives of the Scheme

The objectives of the scheme are to:

  • Taking up new and innovative projects to support the States in utilising the water resources properly
  • Expanding the area under Micro-irrigation
  • Promoting micro-irrigation projects available under the scheme PMKSY-PDMC
  • Encouraging farmers to establish micro-irrigation systems
  • Merging all the investments made at field level in the irrigation sector
  • Offering complete irrigation supply chain solutions such as water resources, distribution network, farm-level applications and efficient water usage.
  • Establishing resources for guaranteed irrigation benefits
  • Safeguarding irrigation through rainwater harnessing at the micro-level
  • Improve the efficiency of water usage, especially during the drought seasons
  • Supporting the activities of Per Drop More Crop motto (PDMC) component 

Funds Allocated under the Scheme

The Ministry of Agriculture has allocated a sum of Rs.5000 crores through NABARD to assist the States in establishing the Micro irrigation system.

  • Out of the total fund allocated under the scheme, Rs.2000 crores was utilised during 2018-19 and the remaining Rs.3000 Crores will be utilised during the year 2019-20.
  • NABARD offers the amount in the form of loan to the State Governments on the agreed term to be repaid within the duration of 7 years.
  • For the benefits of the beneficiaries, NABARD extends the loan at the lowest lending rate of 3% to the State Governments.

Beneficiaries under the Scheme

Small, medium and big farmers, irrespective of their land size, who are willing to install the micro irrigation system in their farms are eligible to claim benefits under the scheme. The subsidy is provided as back-ended for the carrying out micro-irrigation installation and other such related activities.

Area Covered under the Scheme

The Task Force Committee set up by the Government of India has conducted the overall survey and estimated that there is a potential of 27 million hectares land available for drip irrigation and 42.5-million-hectare land available for sprinkler irrigation. Currently, there are about 10 million hectares of land covered under the MIF scheme and there is a huge gap of 60 million hectares to be covered. The scheme focuses on covering the area of 60-million-hectare land by the end of 2020.

Implementation Procedure

Roles of the Implementing Authorities

  • The State Government undertakes all the steps necessary to remove any legal or other procedural hurdles in the smooth implementation of the Micro Irrigation Projects/Proposals to be sanctioned under
  • NABARD is the responsible agency for boosting the resources from the market and lending it to State Governments under MIF in the proportion of its Net Owned Funds (NOF) for its normal business as well as to meet requirements under specific funds like MIF.
  • To facilitate uninterrupted loans to State and for raising required financial resources from the market, MoAFW, The Government of India will facilitate in the contribution of additional share capital to NABARD up to the extent of 10% of the annual lending requirement under MIF. 

Implementation Strategy

  • A Memorandum of Agreement (MoA) is sealed between the State Government, NABARD and DAC&FW for the implementation and regular settlement of the loan to NABARD.
  • Depending on the State’s individual requirements, the respective state can receive MIF for exclusive projects like sugarcane/solar linked systems/Micro-irrigation in commands etc. This also includes for the projects in the Public-Private Partnership (PPP) mode.
  • All the fund disbursed by NABARD is accessed by the State Government and not by individual farmers.
  • An additional (top-up) subsidy over and above the already available PMKSY-PDMC can be accessed by the states for encouraging Micro Irrigation system and for achieving the target.
  • To structure a roadmap in accordance with the need to cover more area with micro-irrigation to improve water-efficient water usage and bring the additional area under assured irrigation.
  • The proposal for this purpose should clearly signify the approved plans of PMKSY-PDMC and extent of fund required under MIF for top-up
  • The project proposal should clearly indicate the chart that specifies all the components with the activities undertaken in sourcing the funding.
  • The individual shares by the State Government, MIF, PMKSY-PDMC and the Farmers’ share and convergence if any from other programmes, schemes of GoI, StateGovernment are documented separately.
  • MIF can be accessed for taking up such projects in the surroundings wherever
  • With a corresponding guarantee of returns in the alternative, the Farmers Producers Organizations (FPOs), Cooperatives, Water User Associations (WUAs), State Level Agencies can also access the funds with State Government.
  • These organizations can access this fund for any innovative cluster-based Community Irrigation projects of Micro-irrigation coverage.

Monitoring Committees

The following committees are being established by the Government of India to monitor and smooth functioning of the MIF in all states:

  • The Advisory Committee to provide policy direction and ensure effective planning, coordination and monitoring the scheme
  • The Committee establishes a successful departmental and Ministerial expertise for achieving key deliverables of Micro Irrigation Fund
  • It also reviews the activities of the Mission and recommends improvement
  • The Steering Committee chaired by CEO, NRAA scrutinises and approves the Projects and proposals submitted by the State Governments (total cost, eligible loan amount to the State and phasing) which are recommended by State Level Sanctioning Committee (SLSC) of PMKSY
  • The screening committee sanctions the submitted proposals and forwards it to NABARAD for the grant of loan, in the case for the eligible submission

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