Nabard funds to UP underutilised

The financial assistance rendered by National Bank for Agriculture and Rural Development (Nabard) to the government of Uttar Pradesh under its Rural Infrastructure Development Fund (RIDF) remains underutilised for the current fiscal.

The total amount sanctioned by Nabard to the state government amounts to Rs 898 crore for 1,690 projects in irrigation, roads and bridges. Of the said amount, the state has utilised only Rs 496.41 crore.

About Rs 613 crore was sanctioned for 993 irrigation projects, Rs 203 crore for 663 road construction projects and approximately Rs 807 crore for 34 bridges for the current year.

Nabard, under its RIDF scheme, provide loans to the state government towards development of various infrastructure activities in 31 sectors such as irrigation, flood protection, rural roads and bridges, watershed and social sector projects to name a few.

 

Recently, the bank has sanctioned a loan of Rs 205 crore to the state for five irrigation projects under RIDF. These include two projects for raising and renovating existing Pahuj dam and Pahari pick-up weir in Jhansi district and three pump canal projects for construction and modernisation in Chitrakoot, Chandauli and Banda districts.

Since the setting up of this fund by the Government of India in 1995-96 under the aegis of Nabard, a total of 13,983 projects have been sanctioned to the UP government with total RIDF loan of Rs 7,310.41 crore. Of this, Rs 4,297.15 crore has already been disbursed.

The loan primarily caters to projects in irrigation, rural bridges and rural roads. Bulk of sanctions has been under three sectors — irrigation, which accounts to 53.54 per cent of the sanctioned amount; the rural connectivity sector, with 34.52 per cent share; and watershed, which accounts for 10.58 per cent. Other sectors like forestry, animal husbandry and fisheries account for the rest of the sanctioned loan amount.

The figures for the previous year show a total sanction of Rs 1,091 crore for 781 projects in the irrigation, watershed, animal husbandry and forestry sectors. The amount utilised by the state is Rs 312 crore.

According to the provisional assessment made by Nabard for the infrastructure needs of the state for the 11th Five Year Plan period (2007-12), the allocation under RIDF may further go up in the coming years. It is expected that support under RIDF could go to the tune of about Rs 1,500 crore for the next year from Rs 1,200 crore.

Similarly, the disbursement of fund is expected to be to the tune of Rs 700 crore in the current financial year, against Rs 549 crore in the previous year.

Talking about the concerns of the bank on fund assistance, Mahinder Kumar, general manager, Nabard, told Business Standard that the bank was keen on ensuring that the projects the state government undertook should be firmly grounded so that the utilisation of funds is ensured.

The other major concern, as Kumar said, is the traditional borrowing of funds by the government. According to him, the state government borrows from the bank for only about six sectors, against 31 sectors wherein the bank has the mandate to disseminate loans.

“The government is keen on traditional borrowing, thus social sector lending remains practically neglected,” he added. Nabard is interested in advancing loans for the social sectors like education, healthcare, rural drinking water supply, sanitation and village knowledge centres (VKCs), and building of rural infrastructure like schools for women et al.

Nabard is also working towards diversifying its portfolio to provide loan assistance under its RIDF scheme. Until recently, the loans provided were primarily for the sectors like irrigation and rural connectivity, but now it is also venturing into areas like veterinary hospital, fisheries, forestry etc, though on a small scale.