Business Standard

Karnataka lags in using Nabard rural infra fund

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Despite a substantial rise in the disbursement of funds year-on-year over the last few years from the National Bank for Agriculture and Rural Development (Nabard) under the Rural Infrastructure Development Fund (RIDF), the Karnataka government is lagging behind in utilising them. While has sanctioned a total of Rs 5,549.87 crore covering 27,299 projects to Karnataka under since its inception in 1995-96, the state government, as on date, has barely utilised Rs 3,491.47 crore, about 63 per cent of the total sanctions.

The reason for Karnataka’s slow progress in utilising RIDF was mainly on account of delay in submission of project reports to Nabard and a lack of emphasis on wide-ranging infrastructure projects by the state government.

Venkatesh Tagat, chief general manager, Nabard, said, “The pace of implementation of infrastructure projects by the state government has increased from 2006-07 onwards due to the state’s higher borrowing power and better capacity to monitor the projects. The basket of projects has also increased with inclusion of projects in the areas of animal husbandry, fisheries, sericulture and, large road and bridge projects.”

Nabard has been assisting state governments for creating rural infrastructure through loans under RIDF covering over 30 broad sectors relating to agriculture and rural development. Presently, Karnataka is 7th in the country in utilising funds under RIDF. Uttar Pradesh, Andhra Pradesh, Tamil Nadu and Rajasthan are in the forefront of using funds more effectively under the scheme. Each of them borrows in the range of Rs 1,000 crore annually, Tagat said.

Of the 16 tranches of RIDF projects sanctioned by Nabard till now, the Karnataka government borrowed funds for the first 12 tranches and is presently working to get funds disbursed for the remaining three tranches, he told Business Standard.

However, it will take another two to three years for the state government to submit project reports and get the funds disbursed under the tranches 13-15, even as the 16th tranche commenced recently, he said.

The credit utilisation rate was 90 per cent from one to 10 tranches and disbursements were going on for tranches between 11 and 15. So far, disbursement in the 11th tranche was 87 per cent while it was 65 per cent in the 12th tranche, he added.

Disbursal of funds under RIDF has been increasing to the state government over the last few years. For example, the state got Rs 200 crore in 2006-07, Rs 333 crore in 2007-08, Rs 453 crore in 2008-09. For 2009-10, the state received Rs 610 crore, about 5 per cent of the funds disbursed across the country. For 2010-11, Nabard has estimated that it will sanction Rs 850 crore as against the target of Rs 1,140 crore budgeted by the government, Tagat said.

Over the last 14 years, the corpus of RIDF has gone up to Rs 98,000 crore (including Rs 12,000 crore under — a separate window for rural roads) through accretions under various tranches of RIDF. For 2009-10, Nabard spent Rs 12,000 crore across the country and aims to spend Rs 16,000 crore during 2010-11.

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