Government to spend around $8B to boost irrigation, online national agricultural market

Government to spend around $8B to boost irrigation, online national agricultural market


  • 02 Jul 2015
Government to spend around $8B to boost irrigation, online national agricultural market

With an eye on improving farm productivity, the Indian government will spend Rs 50,000 crore over the next five years under the Pradhan Mantri Krishi Sinchai Yojana (PMKSY).

"It has been decided that in 5 years, Rs 50,000 crore from the central Budget would be utilised for the Pradhan Mantri Krishi Sinchai Yojana. States' share will be over and above this," Indian Finance Minister Arun Jaitley said while communicating the Cabinet decision.

He further said: "This can also be utilised to help the material component in MNREGA (Mahatma Gandhi National Rural Employment Guarantee Act)." 


The decision was taken at the meeting of Cabinet Committee on Economic Affairs (CCEA) headed by Indian Prime Minister Narendra Modi on Wednesday.

For the current fiscal, he said the allocation is Rs 5,300 crore.

The spending this year is expected to bring an additional 6 lakh hectares under irrigation while 5 lakh hectares will benefit from drip irrigation. That apart, 1,300 watershed projects have been marked for completion.


Currently, 142 million hectares are used for cultivation, of which only 45 per cent farm land is under irrigation.

"The major objective of the PMKSY is to achieve convergence of investments in irrigation at the field level, expand cultivable area under assured irrigation (har khet ko pani), improve on-farm water use efficiency to reduce wastage of water, enhance adoption of precision-irrigation and other water-saving technologies (more crop per drop)," he said. 

Besides, the FM said the scheme is aimed at enhancing recharge of aquifers and introducing sustainable water conservation practices by exploring feasibility of re-using treated municipal water for peri-urban agriculture and attracting greater private investment in precision irrigation.


"The scheme also aims at bringing ministries, departments, agencies, research and financial institutions engaged in creation/recycling/potential recycling of water under a common platform so that a comprehensive and holistic view of the entire "water cycle" is taken into account and proper water budgeting is done for all sectors," he said.

The programme architecture of PMKSY looks at a 'decentralised state-level planning and execution' structure in order to allow states to draw up a District Irrigation Plan (DIP) and a State Irrigation Plan (SIP), he said.

"DIP will have a holistic developmental perspective of the district outlining medium- to long-term developmental plans integrating three components namely, water sources, distribution network and water use application of the district to be prepared at two levels - the block and the district," he said.


All structures created under the schemes will be geo-tagged, he added.

The programme will be supervised and monitored at the national level by an Inter-Ministerial National Steering Committee (NSC) under the Chairmanship of the Prime Minister with the Union Ministers concerned.

A National Executive Committee (NEC) is to be constituted under the Chairmanship of the Vice-Chairman, NITI Aayog, to oversee programme implementation, allocation of resources, inter-ministerial coordination, monitoring and performance assessment, addressing administrative issues and the like.


Indian Government has allocated Rs 200 crore for three years to set up an online national agriculture market by integrating 585 wholesale markets across India -- a move that would help farmers realise better prices.

The Cabinet Committee on Economic Affairs had on Wednesday approved a Central Sector Scheme for Promotion of National Agricultural Market through Agri-Tech Infrastructure Fund.

"An amount of Rs 200 crore has been earmarked for the scheme from 2015-16 to 2017-18," an official statement said.

The Department of Agriculture will set it up by creation of a common electronic platform deployable in selected regulated markets across the country.

"Now there will be one licence for entire state, there will be single point levy. There will be electronic auctions for price discovery. The impact will be that the entire state will become a market and the fragmented markets within the states would be abolished," Indian Finance Minister Arun Jaitley told reporters.

Under the scheme, 585 selected regulated markets would be covered. The plan is to cover 250 mandis in current fiscal, 200 mandis in 2016-17 and 135 mandis in 2017-18.

"Seamless transfer of agriculture commodities within the state can take place. The market size for farmers would increase as he won't be limited to a captive market," Jaitley said.

The Rs 200 crore allocations includes provision for supplying software free of cost by agriculture department to the states and UTs and for cost of related hardware/ infrastructure to be subsidised by the Centre up to Rs 30 lakh per Mandi (other than for private mandis).

Agriculture Secretary Siraj Hussain informed that Madhya Pradesh, Chattisgarh, Orissa, Jharkhand and Gujarat have already agreed to join the Scheme, while west-Indian state Maharashtra and south-Indian state Andhra Pradesh are "very keen" to particuipate. Besides, the Centre is also in discussions with north-Indian state Uttar Pradesh.

Unifying the markets both at state and the national level would provide better price to farmers, improve supply chain, reduce wastages and create a unified national market through provision of the common e-platform, the statement said.

The statement said 585 regulated markets across the country will be integrated with the common e-platform to provide farmers and traders with access to opportunities for purchase/sale of agri-commodities at optimal prices in a transparent manner.

Private markets will also be allowed access to the e-platform thereby enhancing its outreach.

Jaitley said: "Agriculture market is a state subject.

There are a lot of restrictions on movement of agriculture produce in the country. There are 585 regulated markets for the entire country. Those people who are in the business of agriculture market, today there is market specific licence".

The Scheme would be applicable on all-India basis. "There is no state-wise allocation under the Scheme. However, desirous states would be required to meet the pre-requisites in terms of carrying out necessary agri-marketing reforms," as per the official statement.

For integration with the e-platform, the states/UTs will need to undertake prior reforms in respect of a single licence to be valid across the state, single point levy of market fee and provision for electronic auction as a mode for price discovery, it said.

"The e-marketing platform should promote reform of the agricultural marketing sector and apart from promoting free flow of agri commodities across the country and should result in greater farmer satisfaction as prospects for marketing of his produce would be significantly enhanced," it added.

The scheme will provide improved access to market related information and better price discovery through a more efficient, transparent and competitive marketing platform, which gives farmers access to a greater number of buyers within the state and from outside, through transparent auction processes.

It would also increase farmer's access to markets through warehouse based sales and thus obviate the need to transport his produce to the mandi, it added.

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