The NABARD has permitted a period of 15 years for completion of all the pending projects.
The decision would bring in Rs 7,242.74 crore for the completion of irrigation projects, according to a Government Resolution released on Monday.
The Government Resolution further stated that National Bank for Agriculture and Rural Development (NABARD) would charge an annual interest of 6 per cent over the loan.
As per the negotiations between the NABARD and state officials, the government would get a grace period of first three years from the commencement of the work. Hence, there will be no pressure of immediate payback of instalments for the three years.
"It is expected that the grace period would be used by the state government to expedite the procedures of pending permissions and start the pending works. This would enable the state to bring more area under irrigation and with more yield from farmers, a small amount on water tax can be collected. This amount is useful for payback of the loan instalment," a senior officer from state water resources department said.
The NABARD has permitted a period of 15 years for completion of all the pending projects. After the completion, there will be a period of 15 years for repayment of the loan amount, the GR stated.
Once the projects are completed, the state water resources department is asked to submit a 'completion certificate' to NABARD.