The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi on Wednesday approved an initial corpus of Rs 5,000 crore to set up a dedicated fund under the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) to expand the area under micro-irrigation.
The 'Micro Irrigation Fund' (MIF), with the participation of the National Bank for Agriculture and Rural Development (NABARD), will supplement the execution of Per Drop More Crop (PDMC) component under the PMKSY and help in bringing about one million hectares of land under micro-irrigation projects, as per an official statement.
It said that states can access the MIF fund to mobilise resources for innovative integrated projects, including additional (top-up) subsidy for implementation of PMKSY-PDMC to achieve the annual target of about two million hectares per year during the remaining period of the 14th Finance Commission.
"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 seven years, including a grace period of two years," reads the statement.
A state may use this fund for projects under the Public Private Partnership (PPP) mode but it should not substitute the state's own share in the PMKSY-PDMC.
The Task Force on Micro Irrigation had estimated a potential of 69.5 million hectares under micro-irrigation, whereas the area covered so far is only about 10 million hectares (14 per cent).
"Farmers producers organisations, cooperatives, state agencies can also access the funds with state government guarantees or equivalent collaterals. Farmer cooperatives may access this fund for innovative cluster-based community irrigation projects," the statement added.
The constitution of an advisory committee is also proposed to provide policy direction and ensure effective planning, coordination and monitoring along with a steering committee for examining and approving the projects and proposals from state governments.
--IANS
spk/tsb/bg
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)