The government is likely to ask banks to offer loans for small and micro irrigation projects to reduce the dependence on monsoons. These micro irrigation projects are mostly undertaken by zonal authorities under the aegis of Nabard.
The issue was brought up by Finance Minister Pranab Mukherjee in his meeting with chiefs of regional rural banks (RRB).
However, the government has not fixed any target for banks for the long-term loan for continuous irrigation.
The minister said RRBs would also be required to participate in the project to ensure that the funds are not choked.
“Several micro irrigation projects have been taken up at the zonal level in the recent past to ensure that the agriculture sector does not suffer in case of sub-normal monsoon. The banks may be part of financing these small projects, which are turning out to be crucial for the sector,” said Dilip Mukherjee, general secretary, All India Regional Rural Bank Employees Association.
It is learnt that the government is also keen to disperse “consumption” loans, which forms a part of the overall agriculture credit, to the rural sector.