Micro-Irrigation Fund (MIF)

Introduction 

The Government of India launched the Micro-Irrigation Fund (MIF) in 2018-19 under the Ministry of Agriculture and Farmers Welfare to boost drip and sprinkler irrigation across India. The fund was operationalized by NABARD in 2019-20 with an initial corpus of ₹5 000 crore to help state governments mobilize resources for wider micro-irrigation coverage. India faces uneven rainfall, dwindling groundwater, and high upfront system costs that have held back modern irrigation adoption. To tackle these challenges, MIF offers states low-interest loans with 3 % interest subvention to fund top-up subsidies and special projects beyond the Per Drop More Crop scheme, enhancing water use efficiency and farmers’ incomes. State governments channel these loans into benefits for farmers, self-help groups, farmer producer organisations, and agri-entrepreneurs. Clear eligibility rules, defined benefits, and a simple application process are laid out by NABARD and state agriculture departments. The initiative aims to expand micro-irrigation across millions of hectares, ensure sustainable water management, and support small and marginal farmers. As a key pillar of the Pradhan Mantri Krishi Sinchayee Yojana, this agriculture scheme drives climate resilience, rural development, and higher farm productivity.

Overview of the Scheme

The Micro-Irrigation Fund (MIF) was created by the Department of Agriculture & Farmers Welfare under the Ministry of Agriculture & Farmers Welfare, Government of India, in 2018-19. NABARD operationalized the fund with an initial corpus of ₹5,000 crore in 2019-20 as a 100 percent central loan. States can borrow at subsidized interest rates to offer extra incentives for drip and sprinkler systems, going beyond the regular Per Drop More Crop scheme. A simple example is a state taking a loan to provide top-up subsidies for farmers installing solar-linked drip irrigation in fruit orchards.

NABARD serves as the nodal agency, working alongside state agriculture or irrigation departments to manage and disburse funds. The Government of India provides interest subvention – originally 3 percent, reduced to 2 percent from October 2024 – to make borrowing cheaper. MIF covers not only subsidies for drip and sprinkler systems but also micro-level water harvesting structures and special integrated projects (such as high-water-duty crops under PPP models). The Budget 2021-22 doubled the corpus by another ₹5,000 crore. As of 31 May 2025, NABARD has sanctioned ₹4,719.10 crore, supporting expansion of micro-irrigation over 21.69 lakh hectares.

Key points at a glance:

• Launching authority: Department of Agriculture & Farmers Welfare, Ministry of Agriculture & Farmers Welfare, Government of India
• Implementing agencies: NABARD as nodal bank; state agriculture and irrigation departments
• Funding pattern: 100 percent central corpus of ₹5,000 crore; GoI interest subvention @ 3 percent (until Sept 2024), @ 2 percent from Oct 2024
• Coverage: Drip and sprinkler irrigation; micro-level water harvesting; top-up subsidies; innovative PPP-mode projects like solar-linked systems
• Current status: Operational since 2019-20; corpus doubled to ₹10,000 crore in 2021-22; ₹4,719.10 crore sanctioned, covering 21.69 lakh ha as of 31 Mar 2025

Objectives 

The Micro-Irrigation Fund (MIF) objectives define clear goals to boost micro irrigation adoption, mobilize resources for broader coverage, and encourage states and farmers to install efficient drip and sprinkler systems.

• Facilitate states in mobilizing additional funds through low-interest NABARD loans.
• Incentivize micro-irrigation investments beyond existing PMKSY–PDMC subsidies.
• Encourage farmers, self-help groups, farmer producer organisations, and agri-entrepreneurs to adopt drip and sprinkler technologies.
• Promote special and innovative projects, including public-private partnerships, to extend micro-irrigation into new areas.
• Enhance water-use efficiency at the farm level to raise crop productivity and farmer incomes.
• Support the “More Crop per Drop” mission under Pradhan Mantri Krishi Sinchayee Yojana.

Key Features / Benefits 

The Micro-Irrigation Fund (MIF) under PMKSY brings together central loans and state-level incentives to expand drip and sprinkler irrigation across India. Below are its main features and the practical advantages they offer to states and farmers.

• Low-cost credit to states 

States can borrow from NABARD against a central corpus of ₹5,000 crore at regular market rates, with a 3 percent interest subvention from the Government of India. (Example: A ₹100 crore loan at 7 percent interest effectively costs the state 4 percent.)

• Top-up subsidies for farmers 

MIF loans allow states to provide extra support beyond the standard Per Drop More Crop subsidy for installing drip and sprinkler systems. (Example: A farmer might get an additional 10 percent subsidy on equipment costs.)

• Support for innovative integrated projects 

Funds can be used for special models such as solar-powered drip irrigation, high water-duty crops like sugarcane, and public-private partnership schemes. (Example: A PPP project sets up solar-linked drip lines in a sugarcane field.)

• Coverage of water harvesting structures 

MIF extends beyond irrigation equipment to finance micro-level water storage and conservation works, ensuring steady water supply for farms.

• Flexible fund utilization 

States draw on the fund as per their annual action plans, giving them the freedom to decide subsidy rates, crop priorities, and beneficiary groups based on local needs.

• 100 percent central corpus via NABARD 

The entire ₹5,000 crore initially comes from the central government as a loan through NABARD, making it fully backed by central funds.

• Scaled-up funding in 2021–22 

The Budget announcement doubled the MIF corpus to ₹10,000 crore, meeting growing demand for micro-irrigation support across states.

• Streamlined implementation 

NABARD acts as the nodal agency for loan sanction and disbursement, while state agriculture and irrigation departments execute on-field installations.

• Assistance for groups and entrepreneurs 

Self-help groups, farmer producer organisations, and agri-entrepreneurs can access state-run top-up incentives funded by MIF loans.

• Promotion of water-use efficiency 

By supporting drip and sprinkler systems, MIF helps reduce water consumption on farms, lower input costs, and boost crop yields, driving the “More Crop per Drop” mission.

Eligibility Criteria 

The Micro-Irrigation Fund (MIF) eligibility lays out who can receive top-up subsidies and support through state schemes financed by NABARD loans. Below are the main beneficiary categories, their criteria, and required documents.

Farmers

• Must be Indian citizens residing in the implementing state with valid land ownership or lease as per state records (proves entitlement to irrigation support).
• Need an Aadhaar card, up-to-date land record or lease deed, and a bank passbook copy (ensures correct identity and subsidy transfer).

Self-Help Groups (SHGs)

• Should be registered under the Societies Registration Act or state SHG program and active for at least one year.
• Must hold a dedicated bank account linked to the group (guarantees transparent fund handling).
• Required documents: registration certificate and group bank passbook copy.

Farmer Producer Organisations (FPOs)

• Must be legally registered under the Companies Act or Cooperative Societies Act with at least 10 farmer members.
• Should demonstrate ongoing agri-business activities (ensures operational capacity).
• Required documents: certificate of incorporation/registration, list of members, and bank passbook copy.

Entrepreneurs and MSMEs

• Need a valid UDYAM (MSME) registration or equivalent state enterprise certificate.
• Must offer services or produce micro-irrigation equipment (verifies technical and commercial capability).
• Required documents: UDYAM/GST certificate (if applicable), bank passbook copy, and technical qualification proof.

Special Categories

• Women farmers, SC/ST beneficiaries, and those in North-Eastern or hilly regions qualify for additional incentives as per state norms.
• Must supply caste certificate or domicile proof to verify eligibility.

Not Eligible

• Non-resident individuals or groups outside the implementing state’s jurisdiction.
• Entities that have already received central PDMC subsidies for the same land or equipment.

Mandatory Documents (where specified)

• Aadhaar card; land record or lease deed; bank passbook copy
• Registration certificates for SHGs, FPOs, or MSMEs
• Technical DPR and at least two equipment quotations for integrated/innovative projects

These criteria and documents ensure that MIF benefits reach genuine users – farmers, groups, and enterprises – while safeguarding transparency and efficient subsidy flow.

Application Process

Farmers and state agencies access Micro-Irrigation Fund (MIF) support through a two-tier route: states apply to NABARD for loans, and beneficiaries apply to their State Agriculture Department for top-up subsidies. Below is a step-by-step guide to both paths.

• State/UT Government Application 

1.1 Visit the NABARD MIF information page: https://www.nabard.org/content1.aspx?id=1720&catid=8&mid=8.. 

1.2 Download the “Operational Guidelines” and the proposal format under “MIF.” 

1.3 Prepare a cover letter on official letterhead, the state action plan, and a Detailed Project Report (DPR) with cost estimates. 

1.4 Submit these documents to the Chief General Manager of your NABARD Regional Office (address available on NABARD’s Contact Us page). 

1.5 NABARD reviews the proposal, issues an acknowledgment slip, and on approval, sanctions a loan and issues a Letter of Credit.

• Beneficiary Application (Farmers, SHGs, FPOs, Entrepreneurs) 

2.1 Go online to the PMKSY Micro Irrigation portal for scheme details: https://pmksy.gov.in/microirrigation/index.aspx.. 

2.2 Register or log in on your State Agriculture Department’s irrigation scheme portal (state URLs vary). 

2.3 Open the MIF-funded subsidy application form. Complete sections for:

• Beneficiary details (name, category, contact)
• Land/farm details (survey number, area)
• Component selection (drip/sprinkler type)
• Bank account information for subsidy transfer 

2.4 Upload mandatory documents: Aadhaar, land records or lease deed, bank passbook copy, vendor quotations, and DPR for integrated projects. 

2.5 Pay any nominal application fee if specified by your state’s scheme. 

2.6 Submit the form. You will receive an application ID and acknowledgment via SMS or on-screen.

• Verification, Approval, and Fund Release 

3.1 A field officer inspects the site – usually within 15–30 days. 

3.2 After satisfactory inspection, the State Nodal Department approves your application. 

3.3 Subsidy is released via Direct Benefit Transfer into your bank account. Timeline for release varies by state but typically occurs within 30 days of approval.

• Offline Route 

4.1 Collect a physical application form from your nearest Block Agriculture Office, Krishi Vigyan Kendra, or ATMA centre. 

4.2 Fill out the same form sections listed above, attach copies of documents, and submit in person. 

4.3 Obtain a stamped acknowledgment receipt.

• Help and Support 

• For MIF loan queries, visit NABARD’s Contact Us page: https://www.nabard.org/content1.aspx?id=378.. 
• For scheme-level assistance, check the “Contact” section on your State Agriculture Department’s website or the PMKSY portal.

Tips

• Double-check that names on your Aadhaar, land records, and bank passbook match exactly.
• Upload clear, legible copies of all documents to avoid delays.
• Use vendor quotations dated within the last three months.
• Note application deadlines on your state portal and submit early.

Challenges or Limitations 

While the Micro-Irrigation Fund (MIF) brings vital support for water-saving irrigation, users and states often face a few common hurdles. Below are the key challenges paired with practical tips to help you navigate them smoothly.

• Verification delays → Keep all land records, Aadhaar, and bank details accurate and up-to-date before you apply to speed up field inspections and avoid repeated visits.
• Documentation mismatches → Match names and addresses exactly across your Aadhaar, land deeds, and bank passbook; cross-check scanned copies before uploading to prevent rejection.
• Seasonal installation windows → Plan your application and equipment orders well ahead of monsoon or dry-season peaks to secure vendor slots and meet state deadlines.
• Limited annual subvention cap → Since interest subvention is capped (₹150 crore per year), submit your state’s loan proposals early and track fund availability with the agriculture department.
• Overlap with other schemes → Verify that your farm or equipment hasn’t already received PDMC or similar central subsidies; ask your nodal officer to confirm eligibility and avoid disqualification.
• Slow loan sanctioning process → Build a clear communication line with your NABARD regional office, share a complete DPR promptly, and follow up regularly to speed up sanction letters.
• Variable state norms → Review your state’s action plan and subsidy rates before applying, as funding patterns and eligible crops can differ; contact the state nodal agency for the latest guidelines.
• Vendor and service delays → Shortlist approved vendors early, collect multiple quotations, and lock in installation dates so that equipment arrives and is fitted within your approved timeframe.

By anticipating these challenges and applying the tips above, states and beneficiaries can make the most of the [Micro-Irrigation Fund (MIF)] and keep projects running on schedule.

Government Support & Future Outlook 

The Micro-Irrigation Fund (MIF) sits at the heart of the Pradhan Mantri Krishi Sinchayee Yojana’s Per Drop–More Crop (PDMC) component, which was subsumed under the Rashtriya Krishi Vikas Yojana (RKVY) from FY 2022-23 to streamline funding and “Just-in-Time” release of central support. In Budget 2021-22, the Government of India doubled the MIF corpus to ₹10,000 crore, and as of 31 May 2025, NABARD sanctioned ₹4,719.10 crore, covering 21.69 lakh hectares under micro-irrigation.

By aligning MIF with RKVY’s crop diversification grants and state-level extension services through ATMA, farmers and FPOs can weave together multiple benefits. For instance, an FPO might use MIF-funded drip irrigation to cut water use, tap RKVY funds for planting high-value vegetables, and leverage ATMA training programs to improve technical skills – all in one coordinated plan.

Looking forward, official guidelines point to expanding innovative PPP-mode projects, supporting solar-linked irrigation, and strengthening convergence with credit schemes like Kisan Credit Card. These steps aim to close the remaining gap – an estimated 60 million ha potential – under micro-irrigation and drive sustainable, resilient agriculture across India.

Conclusion 

The Micro-Irrigation Fund (MIF) matters because it helps farmers, self-help groups, FPOs and agri-entrepreneurs save water, boost yields and raise incomes by making drip and sprinkler systems affordable. Small and marginal farmers benefit most, gaining low-cost credit and top-up subsidies to apply for efficient irrigation equipment. To get started, check your eligibility on the PMKSY Micro Irrigation portal, gather your Aadhaar, land records and bank details, and talk to your local agriculture office. Always verify the latest benefit rates, application deadlines and process updates on the official portal or helpline before you apply. With clear guidance and complete documents, you can tap into MIF’s benefits and join India’s drive for sustainable farming.
Explore detailed resources on this scheme and the full suite of programmes at ALL ABOUT AGRICULTURE. For one-on-one assistance, call us at +91 8484002620.