Long Term Irrigation Fund-2022

The Indian government has announced the establishment of a dedicated Long Term Irrigation Fund (LTIF) in the National Bank For Agriculture And Rural Development (NABARD) with an initial corpus of 20,000 crore rupees for the purpose of funding and accelerating the completion of incomplete major and medium irrigational projects. The Ministries of Water Resources, River Development, and Ganga Rejuvenation (MoWR, RD, and GR) have joined forces to launch a mission. NABARD has implemented LTIF as part of the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY).

The NABARD, the NWDA, and the Union Government have signed a revised Memorandum of Agreement for the funding of irrigation projects under PMKSY through LTIF.

Objectives

The LTIF's main goal is to address the problems associated with rural India's perennial irrigation water crisis, bridge the resource gap, and facilitate the completion of 99 prioritized irrigation projects between 2016 and 2020. The use of 76.03 lakh hectares of land that have been irrigated in the hope of transforming the agricultural sector in the region. The completion of these projects would provide immediate wage and employment opportunities to the residents of agricultural lands, which is the ultimate goal.

Corpus LTIF

The primary corpus of the LTIF will be derived from a budget allocation from the GoI/Extra Resources via GOI's fully serviced bonds, which must be raised by NABARD or borrowed directly by NABARD. In the case of fully serviced GoI bonds, the GoI will make budgetary provisions for the entire term of the bond.

Sanction of loans

Loan sanctioning based on the recommendations of the Technical Advisory Committee (TAC), NABARD will sanction LTIF loans to state governments and NWDA on a program basis and will seek investment fund clearance from the Planning Commission or the Government of India. Furthermore, these projects must meet all statutory requirements and clearances related to the environment, forests, and other areas.

Rate of Interest

Every fiscal year, the Ministry of Finance, GoI, shall grant NABARD cost-free funds in an amount sufficient to keep the lending interest rate under LTIF at around 6%, as approved by the Union Cabinet.

Monitoring

The Central Water Commission (CWC) regional offices will monitor the physical progress and implementation of the projects every six months. At the field level, all projects will be evaluated jointly by CWC and the respective state governments. In addition, the same committee will check on the physical progress of the projects every six months.

Repayment

Loan assistance under the LTIF will be available for up to 15 years, with a three-year moratorium period. The loan to the NWDA could be repaid in quarterly installments, whereas the loan to the state governments could be repaid in annual installments.

Significance

The LTIF bridges the gap between irrigation potential created and actual irrigation potential utilization. It would also allow for the development of additional irrigation potential. As a result, it contributes to the Union government's vision of doubling farmers' income by 2022, as assured irrigation is a critical prerequisite for meeting the target.

Implementation

GoI proposes the following guidelines for implementing the LITF scheme:

For projects above Rs.2000 crore – High-Level Empowered Committee – Ministers of GoI (Finance, WR, RD & GR, Agriculture, Rural Development) and Deputy Chairman of Niti Aayog.
For projects worth more than Rs.1000 crore but less than Rs.2000 crore, the Council consists of the CEO of Niti Aayog, Secretaries of the Government of India (WR, RD & GR, Agriculture, Rural Development, Finance), and the Chairman of NABARD.
Mission - Additional Secretary/Special Secretary, MoWR, RD & GR for new projects costing up to Rs.1000 crore.