Cabinet approves Corpus for MIF Fund with NABARD under PMKSY

NEW DELHI, May 16:The Cabinet Committee on Economic Affairs chaired by Prime Minister  Narendra Modi approved on Wednesday 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).
Briefing reporters after the meeting, Union Minister Ravi Shankar Prasad said,”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 per cent lower than the cost of raising the fund by NABARD.
This cost will 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.
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 (top up) subsidy over and above the one available under PMKSY-PDMC Guidelines and for covering additional areas. It should not be a substitute for State’s share in PMKSY-PDMC.
Farmers Producers Organization (FPO)/Cooperatives/State Level Agencies can also access the funds with State Government Guarantee or equivalent collateral. Farmers Co-operatives may access this fund for innovative cluster based Community Irrigation Projects.