Cabinet approves raising Rs 9020 Cr for Long Term Irrigation Fund

Aug 18, 2017 13:17 IST
Union Cabinet

The Union Cabinet on 16 August 2017 gave its approval for raising Extra Budgetary Resources (EBR) of up to Rs 9020 Cr for Long Term Irrigation Fund as per the requirement during 2017-18.

The funds will be raised by the National Bank for Agriculture and Rural Development (NABARD) through the issuance of Bonds at 6% per annum as per requirement. They will be used for the implementation of Accelerated Irrigation Benefits Programme (AIBP) works of 99 ongoing prioritised irrigation projects along with their command area development (CAD) works under the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY).

Background

• A large number of major and medium irrigation projects taken up under the AIBP were suffering mainly because of inadequate provision of funds.

• To cater to the large fund requirement and ensure completion of these projects, the Union Finance Minister Arun Jaitley in his Budget speech 2016-17, had announced the creation of dedicated LTIF in NABARD with an initial corpus of Rs 20000 Cr for funding identified ongoing projects under PMKSY (AIBP and CAD).

• The corpus of LTIF was to be raised through budgetary resources and market borrowings to fast track implementation of incomplete major & medium irrigation projects.

• To make the loan from NABARD attractive for states, it was decided that the rate of interest may be kept around 6% by providing requisite cost free funds to NABARD every year during 2016-17 to 2019-20 on which interest cost would be borne by Government of India.

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Other Key Details

• NABARD disbursed an aggregate amount of Rs. 9086.02 crore under LTIF during the year 2016-17, out of which Rs 2414.16 Cr was released for Polavaram project (without EBR component) and the remaining Rs 6671.86 Cr was released to identified projects using EBR.

• Further, an amount of Rs 924.9 Cr was disbursed as Central Assistance (CA) through budgetary provision.

• During 2016-17, overall an amount of Rs 2187 Cr was raised by NABARD in the form of Government of India fully serviced bond as EBR.

• During 2017-18, it is estimated that an amount of Rs 29000 Cr may be required through LTIF, for which EBR of Rs 9020 Cr would be required.

According to the status report submitted by the states and Central Water Commission during various review meetings, 18 projects have been completed or are on the verge of completion. During 2017-18, 33 more projects are likely to be completed.

The completion of the identified irrigation projects will generate immediate wage and other employment opportunities in good measure during the construction phase.

Further, on completion of the projects, the utilization of irrigation potential of about 76 lakh hectares will transform the agriculture scenario of the region resulting in generation of substantially more employment opportunities through increase in cropping intensity, change in cropping pattern, agro processing and other supplementary activities.

Source- PIB

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