Micro irrigation activity to get boost, ancillary supplying companies to be benefited
The government has approved a corpus of Rs. 5,000 crore for the setting up of a dedicated micro irrigation fund (MIF) under the National Bank for Agriculture and Rural Development (NABARD). The allocation will be made in instalments of Rs. 2,000 crore and Rs. 3,000 crore in 2018-19 and 2019-20.
Why is this important
As of today, only 10 mn hectares is covered under micro irrigation. The govt. estimates to cover 69.5 mn hectares of area under micro irrigation in next 5 years.
Stock to be impacted
The stock of Jain Irrigation (CMP Rs. 104, M.Cap – Rs. 5147 crore, PEx 11.7 FY20E) is likely to get benefitted from the move by the government as the company is mainly into business of Micro irrigation activities and supply of piping products.