The Micro Irrigation Fund (MIF) was created by the Ministry of Agriculture and Farmers Welfare in 2018-19 and operationalised through NABARD in 2019-20, to solve a persistent problem in Indian farming: uneven rainfall, falling groundwater levels, and the high upfront cost of drip and sprinkler systems that were keeping micro irrigation out of reach for many states and farmers. Rather than replacing the existing subsidy scheme, MIF was designed to top it up — giving state governments access to low-interest loans so they can offer farmers additional incentives for adopting micro irrigation, over and above what is already available under Pradhan Mantri Krishi Sinchayee Yojana – Per Drop More Crop (PMKSY-PDMC).
Micro Irrigation Fund Overview
- Scheme Name – Micro Irrigation Fund (MIF), operated with NABARD under the PMKSY-PDMC framework
- Scheme Modification Date – Continuation and augmentation of MIF by an additional ₹5,000 crore for the 15th Finance Commission period approved by the Union Cabinet on 3 October 2024, with the interest subvention revised from 3% to 2%; approved by NABARD's Board of Directors on 12 November 2024
- Scheme Fund Allocated – Initial corpus of ₹5,000 crore (2018-19), doubled to ₹10,000 crore in 2021-22; cumulative loans sanctioned stood at ₹4,853.50 crore, with ₹4,074.63 crore released as of 31 October 2025
- Type of Scheme – Central Government fund, nodal Ministry is the Ministry of Agriculture & Farmers Welfare (MoA&FW), operated through NABARD and implemented via State Governments
- Helpline No – Kisan Call Centre, 1800-180-1551; farmers can also contact their State Agriculture Department or the nearest NABARD regional office
- States Covered – All-India, accessed on request by individual State Governments; projects have been approved for states including Andhra Pradesh, Gujarat, Tamil Nadu, Haryana, West Bengal, Punjab, and Uttarakhand, among others
Objectives of the Scheme
- Facilitate State Governments in mobilising additional resources to expand micro irrigation coverage
- Provide top-up or additional incentives to farmers for adopting micro irrigation, beyond what PMKSY-PDMC already offers
- Support innovative, integrated micro irrigation projects, including high-water-duty crops, solar-linked systems, and command-area projects
- Improve water use efficiency at the farm level through drip and sprinkler irrigation
- Encourage states that are lagging in micro irrigation adoption to catch up with better-performing states
Key Features of the Micro Irrigation Fund
- NABARD extends loans to State Governments, who use the funds to provide top-up subsidies and support special micro irrigation projects
- Government of India provides an interest subvention on these loans — reduced from 3% to 2% under the 2024 augmentation — effectively lowering the cost of borrowing for states
- Loan tenure is 7 years, including a 2-year grace period
- Under the base PMKSY-PDMC subsidy structure, small and marginal farmers can receive up to 55% of the indicative unit cost, while other farmers can receive up to 45%, with states able to add further top-up support through MIF
- Farmer Producer Organisations (FPOs), Cooperatives, and State Level Agencies can also access MIF funds, generally with a State Government guarantee or equivalent collateral
- Farmers' Cooperatives can use the fund for innovative, cluster-based Community Irrigation Projects
- States can use MIF for Public-Private Partnership (PPP) mode projects and for innovative composite, commodity, or community-based micro irrigation initiatives
- Beneficiaries typically receive free servicing for the micro irrigation system for three years after installation
Benefits to Farmers
- Access to drip and sprinkler irrigation systems at a subsidised cost, with states able to offer additional top-up support through MIF beyond the base PMKSY-PDMC subsidy
- Improved water use efficiency, helping farmers cope better with uneven rainfall and falling groundwater levels
- Better crop yields and quality through more precise, consistent watering compared to traditional flood irrigation
- Reduced labour costs and improved soil fertility management associated with micro irrigation adoption
- Free servicing support for three years after installation, reducing the burden of early maintenance costs
- Access for FPOs and Cooperatives to fund larger, cluster-based community irrigation projects that individual farmers may not be able to undertake alone
Limitations of the Scheme
- MIF is a state-level lending fund, not a direct-to-farmer subsidy — farmers benefit only if their state government has drawn on the fund and passed on a top-up incentive
- The fund cannot be used as a substitute for the state's own required share in PMKSY-PDMC funding
- Access to funds for FPOs, Cooperatives, and State Level Agencies generally requires a State Government guarantee or equivalent collateral, which can be a hurdle for smaller entities
- Not all states have drawn on MIF equally, so the extent of top-up benefit available to farmers can vary significantly by state
- Projects must go through State Level Sanction Committee and Steering Committee approval before reaching NABARD, which can add processing time
Documents Required
- Aadhaar Card
- Land ownership or cultivation proof
- Bank account passbook
- Passport-size photograph
- Project proposal or application as specified by the State Agriculture Department for micro irrigation subsidy (individual, FPO, or cooperative-level, depending on the applicant)
How to Access Micro Irrigation Fund Benefits
- Contact your State Agriculture Department or the local agriculture extension office to check whether micro irrigation subsidies, including any MIF-funded top-up, are currently available in your area.
- Apply for the drip or sprinkler irrigation subsidy under the state's PMKSY-PDMC application process, submitting Aadhaar, land, and bank details as required.
- For FPOs and Cooperatives seeking to develop larger community irrigation projects, submit a project proposal to the State Level Sanction Committee (SLSC) of PMKSY.
- The SLSC forwards eligible projects to the Steering Committee for approval.
- On approval, the Steering Committee recommends the project to NABARD, which sanctions the loan to the State Government.
- The state then disburses the subsidy or incentive to individual farmers, FPOs, or cooperatives as per its scheme guidelines, and beneficiaries receive free servicing support for three years after installation.
Conclusion
The Micro Irrigation Fund plays a quiet but crucial role behind the scenes of India's push toward water-efficient farming — it doesn't hand money to farmers directly, but it gives states the financial muscle to offer stronger micro irrigation incentives than they otherwise could. With its corpus doubled to ₹10,000 crore and the interest subvention recently sweetened to 2%, MIF is positioned to help more states close the gap in drip and sprinkler adoption. Farmers interested in micro irrigation subsidies should check with their state agriculture department to see what additional top-up support, if any, is currently available through this fund.
Disclaimer: This article is for informational purposes only. Scheme details, interest rates, and subvention amounts are subject to periodic revision by the Government of India, RBI, and NABARD. Farmers are advised to verify the latest terms and eligibility criteria with their bank, NABARD, or official government sources before applying.
