NABARD Scheme

• Providing support by refinancing or funding
• Building infrastructure in rural areas
• Preparing credit plans at district level
• Guiding banking sector in achieving their credit targets
• Supervising Regional Rural Banks (RRBs) and Cooperative Banks
• Designing new projects for rural development
• Implementing Government’s development schemes
• Training handicraft artisans

Also Read: Small Scale Industries: Registration Process, Features, Benefits

Further, let’s discuss some key financial functions offered by NABARD scheme.

• Providing financing services for the improvement and development of rural India
• Organizing and managing funding programs for agriculture and farming activities
• Policy making for rural financial institutions
• NABARD provides funding services for the development of food parks and food processing units in designated food parks
• NABARD offers lending services to warehouse and cold chain and cold storage infrastructure
• It provides short-term and long-term refinance services to its customers also providing direct refinance services to cooperative banks
• It offered credit facilities to marketing federations
• Specialises in providing long-term irrigation and rural infrastructure development funds

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Refinance – Short Term Loans

Short-term loans or crop loans are offered by various financial institutions to farmers for the purpose of crop production. By providing this loan, one can assure about the food security in the country. For seasonal agricultural operations, NABARD has sanctioned short-term credit loan of amount Rs. 55,000 cr to several financial institutors in the financial year of 2017-18.

Long Term Loans

Long-term loans are provided to financial institutions for various farm and non-farm related activities. The tenor of the long-term loan is from 18 months to maximum of 5 years. NABARD has refinanced around Rs. 65,240 cr for financial institutions in the FY 2017-18 that also include concessional refinance of Rs. 15,000 cr to Corporative banks and Regional Rural Banks (RRBs).

Rural Infrastructure Development Fund (RIDF)

Rural Infrastructure Development Fund was introduced by RBI considering the shortfall in lending to priority sector for supporting rural infrastructure projects.  The primary focus of this fund is the rural infrastructure development in India and under this fund the amount disbursed was Rs. 24,993 cr in the FY 2017-18.

Long-Term Irrigation Fund (LTIF)

This fund was introduced mainly to provide funding for 99 irrigation projects by initiating an amount of Rs. 20,000 cr. Post the amount sanctioning of 99 projects, there were two additional projects introduced named as ‘North Koel Reservoir Project’ from Bihar and Jharkhand and ‘Polavaram National Project’ from Andhra Pradesh.

Pradhan Mantri Awaas Yojana -Grameen (PMAY-G)

Under this yojana, National Rural Infrastructure Development Agency (NRIDA) received an amount of Rs. 9000 cr that plans to build a pucca house, with all the basic amenities, to needy households by the year 2022.

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NABARD Infrastructure Development Assistance (NIDA) is a special program initiated to provide credit to financially well-to-do state-owned institutions and corporations.

Warehouse Infrastructure Fund

Warehouse Infrastructure Fund provides scientific warehousing infrastructure for agricultural commodities. Initial loan of the amount Rs. 5000 was provided by NABARD in the FY 2013-14. As on 31^st March 2018 the amount disbursed is Rs. 4778 cr.

Food Processing Fund

Under this fund, Government of India has done a loan commitment of Rs. 541 cr for 11 mega food park projects, 3 food processing units and 1 integrated food park project on 31 March 2018.

Direct Lending to Cooperative Banks

NABARD has provided assistance to 58 Co-operative Commercial Banks (CCBs) and 4 State Cooperative Banks (StCBs) spread across 14 states with sanctioned amount of Rs 4,849 cr.

Credit Facility to Marketing Federations (CFF)

This federation promotes marketing of farm activities and agricultural produce; also it promotes and strengthens marketing federations and cooperatives. Amount disbursed, as on Mar 2018 was Rs. 25436 cr.

Credit to Producer Organizations & Primary Agriculture Credit Societies (PACS)

NABARD launched Producer Organizations Development Fund (PODF) to support and finance Producer Organizations (POs) and Primary Agriculture Credit Societies (PACS). These organizations are formed to operate as Multi Service Centres.

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NABARD also provides schemes related to the development of Farming Sector, such as

Dairy Entrepreneurship Development Scheme

Under this scheme, entrepreneurs related to dairy market were provided assistance in setting up small dairy farms and other related components in the dairy sector.

Other objectives of the scheme include:

• Setting up of modern day farms for the production of farm milk
• Upgrading the technology to handle milk production on commercial scale
• Generating self-employment and improve infrastructure for unorganized sector
• Encouraging heifer calf rearing and conserving good breeding stock

Also Read: Dairy Farm Business Loan: Interest Rate, Eligibility, Documents

Various other schemes that are offered by NABARD are as follows:

• Capital Investment Subsidy Scheme for Commercial Production Units for organic / biological Inputs
• Agri-clinic and Agribusiness Centres Scheme
• National Livestock Mission
• GSS – Ensuring End Use of Subsidy Released
• Interest Subvention Scheme
• New Agricultural Marketing Infrastructure

Credit Linked Capital Subsidy Scheme (CLCSS) under NABARD

NABARD also provides an important off-farm scheme that is mentioned below:

Launched by Government of India in 2000, Credit Linked Capital Subsidy Scheme (CLCSS) was introduced for technology upgradation of Micro, Small and Medium Enterprise (MSMEs) to facilitate technology upgradation of Small Scale Industries (SSIs) units in the defined products or sub-sectors.

Note: Under ‘Atmanirbhar Bharat Abhiyan’ or ‘Self-reliant India Scheme’, NABARD will extend additional emergency working capital or refinance support of Rs. 30,000 crore for Indian farmers. This funding will be over and above the Rs 90,000 crore to be provided by NABARD through the normal refinance route this financial year. Some of the key takeaways are mentioned below:

Rural Co-operative Banks and Regional Rural Banks shall be the main source for credit
To benefit approximately 3 crore farmers across India
To meet post harvest (Rabi) and current Kharif requirements in May/June

Hence, NABARD has contributed immensely in the agriculture and rural development through financial and non-financial support to increase prosperity and growth of agriculture and rural sectors.

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