Financing Option for Micro irrigation

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Explore the financing options available for micro irrigation in India, including loans, subsidies, and funds provided by the government and financial institutions. Learn about the potential areas for micro irrigation and the progress made so far.


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Financing Option for Micro irrigation

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  1. Financing Option for Micro irrigation

  2. Overview of Micro Irrigation in India Potential area for micro irrigation as estimated by the Task Force on Micro Irrigation during 2017- 18 was 69.5 million ha; only 10 m ha (14%) was covered under micro irrigation till 2017-18. Net irrigated area of country - 71.55 m ha against 139.35 m ha of net sown area. Upto Feb 2022, area under Micro irrigation in India- 13.78 m ha (19.26% of net irrigated area) GoI launched Per Drop-More Crop' in 2015 to maximise water use efficiency at field level under umbrella scheme of PMKSY. Area covered under PMKSY-PDMC - 6.95 m ha. To provide impetus to micro irrigation, Hon ble Finance Minister, in UB 2017-18, announced setting up of a dedicated Micro Irrigation Fund (MIF) to be instituted with NABARD with an initial corpus of Rs. 5000 crore.

  3. Micro Irrigation Fund (MIF) Genesis Objectives Coverage of additional area through Innovative Integrated projects Incentivization beyond PMKSY- PDMC top up subsidy Union Budget 2017-18 for MIF- 5000 Crore in NABARD Announcement in Union Budget 2021-22 for augmentation by another Rs. 5000 crores . MIF Funding arrangement Tripartite MoA In operation from 2019-20 Up to 31 March 2023.* Lending to SGs with interest subvention of 3% by GoI. Extension under active consideration of GoI AP, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Uttarakhand & West Bengal (9 states) Gujarat, Haryana,

  4. MIF - Financial & Physical Progress Sanction- 8 States Disbursement- 6 States 2516.02 crore AP, TN, Gujarat, Haryana, Punjab & Rajasthan 4710.96 crore AP, Gujarat, Haryana, TN, WB, Punjab, Rajasthan & Uttarakhand Balance corpus available- Rs. 289.04 cr. West Bengal & Uttarakhand (Yet to avail) Physical Progress Area envisaged 17.12 lakh ha Area covered 11.30 lakh ha

  5. MIF funding arrangement - NABARD'S Experience so far Demand for MIF loans towards top up subsidy (75%) is more than innovative projects (25%). Offtake of MIF is more in Southern & Western States of India; Interest subvention (IS) component @ 3% - the attractive feature for State Governments to avail assistance under MIF. Few State Governments yet to draw sanctioned amount towards even after 2 years of sanction (West Bengal, Uttarakhand and Haryana ) Augmentation of Initial MIF Corpus by another Rs. 5000 crore (as announced in UB 2021-22) will help in coverage of more area under micro irrigation.

  6. Financing options for Micro Irrigation For beneficiary share - Loans (to individuals/Farmers collectives) by SCBs, RRBs, Co-operative Banks, NBFCs, etc. with suitable subsidy under various schemes of GoI/State Govts Loans to individuals directly by the banks/NBFCs Not eligible under any schemes of GoI/State Agriculture Infrastructure Fund (AIF) - Concessional loans to individual farmers/FPOS/PACS/ Marketing Co-operative societies, Multipurpose Cooperative Societies/State Agencies/ Federation of FPOs and SHGs - Community Farming Assets - Infra for smart and precision agriculture Refinance to banks/NBFCs against loans extended to individuals for MI Concessional loan to State Governments through interest subvention, incentive through convergence or credit guarantee

  7. Financing options for Micro Irrigation from NABARD Loans to State Governments i. Rural Infrastructure Development Fund (RIDF) MI, an eligible activity under the fund ii. Micro Irrigation Fund (MIF) Dedicated fund to expand area coverage under MI Refinance support to Banks/NBFCs for micro irrigation Credit support /credit guarantee to FPOs formed in MI clusters (NABARD/NABKISAN/ NABSARANKSHAN) Equity support to the Agri start-ups engaged in activities related to Micro Irrigation (NABVENTURE)

  8. Ways to expand Micro Irrigation MI to be promoted as a tool for enhancing agricultural productivity rather than "Water saving Technique'' - areas having low adoption of MI & high availability of water More focus on area expansion in Indo- Gangetic plains, Eastern & NER States Adoption of community or cluster approach (fragmented land holdings) Affordable MI systems may be developed -Majority of farmers are marginal or small farmers. Financial institutions may be geared up to offer special loans for the installation of MI systems for resource poor SF/MF Special incentives {interest subvention / subsidy} to be given for North-Eastern States (higher cost of investment due to remote location & undulated topography). Conduct of awareness & capacity building programmes for farmers to adopt MI

  9. Financing + options for mI from NABARD Skill development/training programs to farmers/rural youth for maintenance of MI implements Preparation of banking plan in MI clusters - to assess further credit absorption Impact evaluation study in States having completed projects under MIF Tamil Nadu/Andhra Pradesh Implementation of need based programmes of NABARD in cluster mode viz., Wadi projects, Watershed projects, Climate change projects, projects under Farm Sector Promotion Fund (FSPF) in DPR mode etc.

  10. Thank You spd@nabard.org

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