Lecture 3 Government of India Financial Assistance for Promotion of Micro

Irrigation in India

3.1 Financial Assistance under National Mission on Micro Irrigation

India is an agrarian country. Water management is of critical importance to Indian agriculture.

While the irrigated area in the country has almost doubled since independence, it is believed that
the irrigated area cannot exceed 50% of the cultivable area with the conventional methods of
irrigation even if the irrigation potential is fully utilized. To address the judicious and improved
methods / technologies for harnessing maximum benefits from available water resources to
enhance crop productivity without affecting soil health. The scheme on Micro- Irrigation, which
was launched during the year 2005-06, has been upscaled to be implemented as the ‘National
Mission on Micro-irrigation’ (NMMI) during XI Plan period.
The main objectives of NMMI are:

 To increase the area under micro-irrigation through improved technologies.

 To enhance the water use efficiency.

 To increase the productivity of the crops and farmers’ income.

 To establish convergence and synergy among ongoing Govt. programmes.

 To promote, develop and disseminate MI technology for agriculture or horticulture

development with modern scientific knowledge.

 To create employment opportunities for skilled and unskilled person especially

unemployed youth

This is a Centrally Sponsored Scheme under which out of the total cost of the MI
System, 40% will be borne by the Central Government, 10% by the State Government
and the remaining 50% will be borne by the beneficiary, either through his/her own
resources or soft loan from financial institutions. Assistance for beneficiary farmers will
be for covering a maximum area of 5ha/ beneficiary.

At least 33% of the allocation is to be utilized for small, marginal and women farmers.
The allocation to SC/ST farmers will be proportionate to their population in the district.
Farmers who have already availed the benefit of subsidy can again avail subsidy after 10
years.

The assistance for MI demonstrations, to be taken in farms belonging to State/Central

Governments, State Agricultural Universities (SAUs) and ICAR Institutions, progressive
farmers and Non-Governmental Organizations (NGO)/Trusts, on their own land will be
@ 75% of the cost for a maximum area of 0.5 ha per beneficiary, which will be met
entirely by the Central Government.
Assistance will be available for both drip and sprinkler irrigation for wide spaced as well
as close spaced crops. However, assistance for sprinkler irrigation system will be
available only for those crops where drip irrigation is uneconomical. Assistance is also
available for irrigation systems for protected cultivation including greenhouses,
polyhouses and shadenet houses. Assistance is available for implementation of advanced
technology like fertigation with fertilizer tank / venture systems, sand filters / media
filters, hydrocyclone filters / sand separators and other different type of filters and valves
required for MI system.

The Panchayati Raj Institutions (PRIs) are involved in selecting the beneficiaries. The
scheme includes both drip and sprinkler irrigation. However, sprinkler irrigation will be
applicable only for those crops where drip irrigation is uneconomical. There will be a
strong HRD input for the farmers, field functionaries and other stake holders at different
levels. Besides, this there is provision for be publicity campaigns, seminars/workshops at
extensive locations to develop skills and improve awareness among farmers about
importance of water conservation and management. The Precision Farming Development
Centres (PFDCs) provide research and technical support for implementing the scheme.
Supply of good quality system both for drip and sprinkler irrigation having BIS marking,
proper after sales services to the satisfaction of the farmer is paramount.

At the National Level, the Executive Committee of NMMI reviews the progress of
NMMI and approve the Annual Action Plans of States. At the State level, the State
Micro-irrigation Committee (SMIC) woversees the implementation of the Mission
programme in districts. The District Micro-irrigation Committee (DMIC) coordinates the
implementation of NMMI programme at the District level. NCPAH coordinates and
monitor the programme of NMMI in different States.

The scheme is implemented by an Implementing Agency (IA) appointed by the State

Government, which will be the District Rural Development Agencies (DRDA) or any
identified Agency, to whom funds will be released directly on the basis of approved
district plans for each year.

The IA shall prepare the Annual Action Plan for the State on the basis of the district plans
and get it forwarded by SMIC for approval of the Executive Committee (EC) of NMMI.
Payment is made through RTGS to the IA who transfers funds to the identified districts.
DMIC provides funds to the system suppliers through the farmers’ / beneficiaries’.
Registration of System Manufacturers will be done by the SMIC for use in the Districts.

Micro-irrigation systems costs have been standardized upon which the subsidy amount is
being calculated, as stated in Tables 3.1, 3.2, 3.3, 3.4, 3.5 and 3.6.

Table 3.1 Indicative cost of installing drip irrigation system for calculation of
subsidy

Cost in Rs./ha
Lateral Spacing (m x m) 0.2 0.4 1 2 3 4 5

12 x 12 8057 13785 18820 29928 46467 57809 73611

100 x 10 8308 14277 20041 32323 50128 62787 79831

9x9 8490 14631 20900 34039 52704 66294 84219

8x8 8673 15088 22028 36217 56087 70893 89964

6x6 9492 16605 26551 44387 71715 86970 109129

5x5 10061 17977 30143 51438 74334 94465 126925

4x4 11177 18621 31793 55725 86926 113812 135459

3x3 12088 20048 36551 63269 97448 122553 153441

2.5 x 2.5 14939 27092 52230 95083 145227 203823 248954

2x2 18319 31616 63598 123441 179332 249134 305797

B. Close spaced Crops

1.5 x 1.5 21514 35973 74437 141858 211855 292595 360002

2.5 x 0.6 15463 26791 54909 100906 154213 214153 262885

1.8 x 0.6 18807 32909 70086 132653 199684 271986 338705

1.2 x 0.6 24063 43816 97598 185565 2800886 378946 474070

 Table 3.2 Indicative cost of micro sprinkler and mini sprinkler irrigation system

Cost in Rs

Micro Sprinkler Mini Sprinkler

Area Spacing of Sprinkler (m x m)

(ha)
5x5 10 x 10

0.2 17019 Not Feasible

0.4 51245 35968

1 90070 74097

2 129830 139142

3 175315 211289

4 221628 271958

5 221628 333150

Table 3.3 Indicative cost of drip irrigation/fogging/misting system under protected

cultivation

Cost in Rs. per unit)

SN Particulars 504 Sqm 100 Sqm

 Green House / Poly House

1. a) High Cost 55,000 21,000

b) Naturally Ventialted

2. Shadenet 45,000 18,000

Table 3.4 Indicative cost of portable sprinkler irrigation system

Area 63 mm 75 mm 90 mm

Up to 0.4 ha 10399 NA NA

More Than 0.4 ha – 1 ha 16993 19044 NA

More Than1 ha – 2 ha 24533 27280 NA

More Than 2 ha – 3 ha NA NA 36822

More Than 3 ha – 4 ha NA NA 46438

More Than 4 ha – 5 ha Na NA 52573

Table 3.5 Indicative cost of semi-permanent sprinkler irrigation system

Area Cost (in Rs.)

Up to 0.4 ha 19615

0.4 ha – 1 ha 31832
 1 ha – 2 ha 60699

2 ha – 3 ha 81929

3 ha – 4 ha 104689

4 ha – 5 ha 127003

Table 3.6 Indicative cost of large volume sprinklers (rain guns)

Cost in Rs.

Area 63 mm 75 mm 90 mm

More Than 0.4 ha – 1 ha 24940 30011 NA

More Than 1.0 ha – 2 ha NA 38075 NA

More Than 2.0 ha – 3 ha NA NA 54112

More Than 3.0 ha – 4 ha NA NA 62720

More Than 4.0 ha – 5 ha NA NA 68878

(Source: Guidelines, NMMI)

The total cost of the scheme is being shared between Central Government, the State
Government and the beneficiary either through his/her own resources or soft loan from
financial institutions in the ratio of 40%, 10% and 50% respectively. Bankable schemes
are being formulated for availing bank loans.

3.2 Financial support from National Bank for Agriculture and Rural Development
(NABARD)

Broad guidelines for scheme formulation by banks for financing drip irrigation systems
are available at NABARD. The loans are available to farmers from different banks,
through NABARD. Some cooperative societies and IFFCO also provide finances
required for the initial installation of the micro-irrigation system.

3.3 Financial Assistance from National Horticulture Board (NHB)

National Horticulture Board (NHB) also has a scheme to assist farmers in increasing the
produce of horticultural crops. It also includes financial assistance for micro-irrigation.
The pattern of assistance of NHB is credit linked back-ended subsidy @ 20% of the total
project cost limited to Rs 25 lakh per project in general area and Rs 30.00 lakh in NE
Region, Hilly and scheduled areas.

The terms and conditions of the assistance of NHB are as follows:

i) The assistance shall be available for projects covering area above four hectares (above
10 acres) in case of open field cultivation in general area and 5 acres in NE,
hilly/scheduled area.

ii) Credit component as means of finance of the project should be term loan from banking
or non-banking financial institutions and should be at least 35% (i.e. 15% more than the
admissible rate of subsidy.)

iii) Projects shall be appraised to ensure and enable entrepreneur to incorporate essential
hitech components in the form of planting material, plantation, irrigation, fertigation,
vermicompost unit, precision farming, on farm PHM related infrastructure, GAP etc.; and
to that extent, the project shall be integrated in nature.

iv) Normative cost of various components shall be prescribed by NHB.

v) NHB provides financial assistance for creating irrigation infrastructure for digging
bore well to a maximum ceiling of Rs. 4.00 lakh per unit maximum upto two units.

vi) Expenses towards sprinkler system upto 10 Acres with maximum ceiling of 1.0 lakh
for installation drip system upto 2.0 lakh.