Minor Irrigation

RULES FOR MEDIUM TERM MINOR IRRIGATION LOANS

What is minor irrigation?

Any irrigation activity for the use of ground water, which benefits an area between 3 acres to 2000 hectares, is called Minor Irrigation activity. Activities which are classified under Minor Irrigation are:-

1. Sinking of open Dug Well; renovation/ deepening of dug well.
2. ii)Sinking of Tube Wells- Shallow (upto 60 meters or 200 ft.), Mini Deep (70 – 100 meters or 230 – 330 ft.) and Deep Tube Wells (200 - 300 meters or 660 – 1000 ft.).
3. Installation of Pump sets run by electricity or oil engines and construction of pump houses.
4. Lift irrigation points: Water is lifted from source( river or ground water) and is distributed through open channels or pipe lines to units of land.
5. Sprinkler Irrigation system
6. Drip/ Trickle Irrigation System: Water is lifted from source ,is allowed to go through main lines and then through several lateral lines, so as to reach directly to the root zone of the plant through remitters
7. Laying drainage and irrigation channels.

FINANCING DUGWELLS/ TUBEWELLS

Dark, Grey & White areas

• Dark area is one where more than 85% of the available ground water resources have already been developed. Financing of dug well / tube well is not permitted in such areas.
• Grey area is one where 65%-85% of ground water potential is already exploited. Therefore financial assistance for dug well / tube well in this area is given on a selective basis.
• White area is one where ground water has been exploited only up to 65% or less; and therefore there is good scope for financing for dug well / tube well in this area
• Area near sea-shore: No financial assistance is to be given for Minor Irrigation in an area which is within 8 k.m. from the sea shore.

Spacing norms

There should be reasonable distance between one tube well /dug well and another so that adequate ground water is available to them. This spacing norm is provided by NABARD and is different from one Block to another Block ranging from 300 ft. to 500 ft.

Ground water clearance certificate

A ground water clearance certificate should be obtained from the concerned department.

Command area

The area to be benefited by a dug well should be a minimum of 5 acres (including the area to be benefited by sale of water).

Eligibility

Members of PACS’ (including LAMPS, FSCS etc.), PACS’ and Nominal members of the Bank (in exceptional cases) are eligible for such finance.

Amount of Finance / Unit Cost

The quantum of finance should be as per the unit cost fixed by NABARD RO, if any, or as may be decided by the Bank.

Margin

30% (thirty per cent) of the Project cost shall be born by the borrower. A member-society shall have to purchase requisite “C” Class Share for the loan.

Disbursement

In 3-4 installments, depending on the progress of the work in such a fashion that the last installment is disbursed in pre-monsoon period.

Repayment

The loan shall be repaid in quarterly or half-yearly installments, including suitable moratorium period depending upon the type of crop cultivated by the farmer. Total period of repayment will be 5 years.

Rate of interest

As may be fixed by the Bank from time to time.

Security

• Legal / Equitable Mortgage of the land to be dug
• 0-20% of loan as collateral Security and/ Third-party guarantee

Other conditions

1) Along with the application following documents should be obtained:- a) Quotation b) Land records like sale deed, parcha/ mutation certificate, tax receipt etc., and c)Search-cum-non-encumbrance certificate in respect of the land under possession and d) Project economics. 2) The Branch shall submit a report on inspection of the command area, verification the past loan repayment records of the borrower from the records of the PACS’ and other Financial Institutions of the area and the competence of the borrower.

Appraisal and Sanction

All loans of this type shall be appraised by the Branch Manager himself or any official authorized by him with reference to the Loan Manual of the Bank specifically recommended by the Branch Manager/ Manager of the Branch, processed at the Regional / Head Office level and then considered and sanctioned by the appropriate Committee of the Bank duly authorized by the Board of Directors from time to time or by the Board of Directors itself.

FINANCING PUMP SETS FOR LIFTING WATER FROM WELL

What is a pump set?

• A Pump set is a device used for lifting water
• A Pump set has four main components, namely, (a) pump, (b) motor, (c) Suction pipe and (d) delivery pipe.
• Pump: The function of a pump is to create Vacuum to suck water.
• Motor/engine: It helps to rotate the blades of the pump. This motor can be a Diesel engine, an Electric engine or a Generator.
• Suction pipe: It is a pipe which lifts water from well to the ground level .
• Delivery pipe: It is a pipe which takes water from the pump to the field.

Capacity of a motor

• Pump-sets are available in capacities expressed in Horse Powers, namely, 0.25 HP, 0.50HP, 0.75 HP,1HP, 2HP, 3HP ,5 HP ,10HP etc.
• The capacity indicates the power of the pump to lift water. An engine with higher HP can help lift more water. Horse-power also indicates the consumption of energy (i.e., diesel/ electricity).
• One Horse Power is equal to 746 watts which is equal to 0.746 kilowatt. Electric meters record 1 unit when 1 kilowatt of power is consumed for an hour. In other words, if an 1-H.P. Motor is run for one hour, the meter will record 0.746 units

What type of pump system should be financed?

• The engine/ motor should have a more power than that of the pump. In particular the capacity of the engine should be 20% more than that of the pump.
• The engine/ motor should have ISI certificate
• The diesel consumption of the engine should be low and should not exceed 199- gms per BHP per hour.

Eligibility for financing

• Members of PACS’ (including LAMPS, FSCS etc.), PACS’ and Nominal members of the Bank (in exceptional cases) are eligible for such finance.
• The farmer should have a minimum of 0.5 acres of land under possession for upto 10 H.P. Pump set. There should be a dug-well with assured supply of water. The cropping pattern should be such that there is sufficient incremental income for repayment of the debt.

Margin

30% of the Project cost shall be borne by the borrower.

Rate of Interest

As may be fixed by the Bank from time to time.

Security

• Hypothecation of the asset created.
• Mortgage of the plot of land possessed by the borrower.
• 10%to 20% of loan as Collateral Security and / or Third Party Guarantee.

Repayment period

3 to 5 years and the grace period is NIL

Insurance

The borrower should arrange for insurance cover for the full value of the asset under comprehensive policy with Bank’s clause. The expiry of the policy should be diarised and the arrangement should be made to get the policy renewed well before the date of expiry.

Other conditions

1. Along with the application following documents should be obtained:- a) Quotation b) Land records like sale deed, parcha/ mutation certificate, tax receipt etc., and c)Search-cum-non-encumbrance certificate in respect of the land under possession and d) Project economics.
2. The Branch shall submit a report on inspection of the command area, verification the past loan repayment records of the borrower from the records of the PACS’ and other Financial Institutions of the area and the competence of the borrower.
3. The Brand of the Pumpset should be acceptable to the Bank.

Appraisal and Sanction

All loans of this type shall be appraised by the Branch Manager himself or any official authorized by him with reference to the Loan Manual of the Bank specifically recommended by the Branch Manager/ Manager of the Branch, processed at the Regional / Head Office level and then considered and sanctioned by the appropriate Committee of the Bank duly authorized by the Board of Directors from time to time or by the Board of Directors itself.