The National Bank for Agricultural and Rural Development’s (NABARD) Rural Infrastructure Development Fund (RIDF) is set to play a larger role in the implementation of mega projects worth 100 crores or more. The Budget presented on Friday makes it clear that the emphasis on implementing small-scale projects under the NABARD-RIDF schemes has created numerous roadblocks to timely project completion.
Instead of small-scale projects, the Budget proposes to consider megaprojects with a high likelihood of commercial success and income assurance. The Budget also examines the reluctance of those who received advance funds for small-scale projects to repay them on time.
The NABARD-RIDF schemes were introduced to support small-scale projects in 1995-1996. It had been following the pattern of implementing projects on a small scale through various departments since then.
The Rural Infrastructure Development Fund (RIDF) was established in NABARD by the Government of India in 1995-96, with an initial corpus of Rs.2,000 crore. With the allocation of Rs. 40,490.95 crore under RIDF XXVII for 2021-22, the total allocation now stands at Rs. 418410.52 crore, including Rs.18,500 crore under Bharat Nirman.
The Budget presented on Friday makes it clear that the focus on implementing small-scale projects under the NABARD-RIDF schemes have been creating many hurdles in the timely realisation of the projects.
The Budget proposes to consider mega projects which have high probability of commercial success and income assurance instead of small-scale projects. The Budget also critically reviews the reluctance of those who received funds in advance for small- scale projects to pay it back on time.
It was in the 1995-96 period that the NABARD-RIDF schemes were introduced to support small-scale projects. Since then, it had been following the pattern of implementing projects on a small-scale basis through various departments.
Currently, the GoI has approved 37 eligible activities under the RIDF (Annexure I). The eligible activities are divided into three broad categories, namely:
- Agriculture and related sector
- Social sector
- Rural connectivity
Except for the initial mobilization advance of 30% to North Eastern and Hilly States and 20% to other states, NABARD releases the sanctioned amount on a reimbursement basis.