For the first time, the National Bank for Agriculture and Rural Development (Nabard) will provide funds to the Central Government to fund irrigation projects.
In the next 15 days, Nabard will raise about Rs 6,000 crore (through private placement) and then on lend it to the Central Government for the funding of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), Harsh Kumar Bhanwala, Nabard Chairman, said.
For this purpose, a memorandum of agreement was signed on Tuesday between Nabard, Water Resources Ministry and National Water Development Agency.
Nabard will make available the entire estimated Rs 80,000 crore for PMKSY over the next few years, Bhanwala told
Elaborating on the plans for the fund mop-up this fiscal, Bhanwala said that Nabard will raise the funds in several tranches under two types of bonds.
One type of bond will be in which the Centre will take the liability for repayment, and the other in which Nabard will bear the obligation to repay the bonds.
Of the targeted funds mop-up of close to ₹20,000 crore this fiscal, the Water Resources Ministry will bring in ₹1,500 crore (budgetary allocation), the bonds for which Centre will take the repayment obligation will amount to about ₹6,300 crore, and the balance amount of about ₹12,000-13,000 crore will be directly raised by Nabard under its own books.