The Union Cabinet on Wednesday approved raising Extra Budgetary Resources (EBR) by Rs 9,020 crore for Long Term Irrigation Fund (LTIF) for year 2018-19 through issuance of bonds by National Bank for Agriculture and Rural Development (NABARD).
As per a release, LTIF seeks to make loans from the NABARD attractive for states at the rate of 6 per cent per annum in order to complete 99 ongoing prioritised irrigation projects under the Accelerated Irrigation Benefit Programme (AIBP) which "were languishing mainly due to inadequate provision of funds".
The LTIF was launched in 2016 to complete these projects along with their command area development (CAD).
The CAD programme aims to narrow the gap between irrigation potential created and actual utilisation.
"To make the loan from NABARD attractive for states, it was decided that the rate of interest may be kept around 6 per cent by providing requisite cost free funds to NABARD every year during 2016-17 to 2019-20 on which interest cost would be borne by the government," the release said.
Notably, the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), launched by the Narendra Modi government, subsumes previous schemes such as the AIBP and several other projects launched to repair and restore water bodies.
Initial corpus of about Rs 20,000 crore was announced in 2016-17 for the LTIF Budget to address the perennial irrigation water crisis affecting rural India.
The cabinet decision to raise the EBR by Rs 9,020 has been taken "to fulfill the estimated requirement" of an amount of Rs 29,000 crore as LTIF.