Rural Infrastructure Development Fund (RIDF) was instituted in NABARD during 1995-96 with the main objective providing loans to State Governments and State-owned corporations to enable them to complete ongoing rural infrastructure projects.
A. Allocation and Sanctions
2. First tranche, RIDF-I, was placed with NABARD during 1995-96 with an allocation of `2,000 crore (Chart 1). Since then, the total allocation, till RIDF-XVI, has been `1,16,000 crore for State Govts. and `18,500 crore for NRRDA, totaling `1,34,500 crore. Against this, `1,40,388.40 crore were sanctioned, providing for a small cushion to offset the likely withdrawal/ abandonment/of a few sanctioned projects. With `18,000 crore for RIDF-XVII during 2011-12, the cumulative allocation has reached a new high of `1,52,500 crore. A graphic look at the tranche-wise allocations under RIDF is presented in the Chart 1 below:
3. Further allocations of RIDF to States are made by NABARD on a ‘normative basis’ with reference to their geographical area, rural population, inverse of rural infrastructure index and rural CD ratio and the previous performance of RIDF sanctions and utilisation. As per RIDF loan policy, NABARD provides 95% of the project cost as RIDF loan for agriculture and allied sectors; 85% for social sectors like health, education, drinking water and sanitation, etc; and 80% for rural connectivity, i.e. roads and bridges –with further relaxation for NE and hill States.
4. As on 31 March 2011, cumulative sanctions (RIDF I to XVI) to different State Govts. aggregated `1,21,874.95 crore, against the cumulative corpus of `1,16,000 crore. Apart from this, an amount of `18,500 crore were sanctioned to NRRDA. During 2010-11, the loans sanctioned were of the order of `18,314.88 crore, as against the allocation of `16,000 crore. Total loans sanctioned during the year grew by 17.2% as against 6.3% last year (`15,630 crore during 2009-10). Allocations and sanctions during the year, State-wise, is presented in the Chart 2 below.
5. Majority of States attained their allocation targets except Chhatisgarh (17%), Goa (29%), Himacha Pradesh (76%), Jharakhand (92%) and Haryana (95%). In NE regions, except Manipur (388%) and Mizoram (104%), other States could not reach their allocation levels.
6. As at end 31 March 2011, 41,779 projects involving a loan amount of `18,314.88 crore were sanctioned under RIDF XVI (Table 1). Of the total amount sanctioned, rural road projects accounted for 34 per cent followed by irrigation (20%) and social sector projects (20%), rural bridges (14%) and others (12%).
Table 1: RIDF XVI - Sector-wise Sanctions
RIDF XVI (2010-11)
No. of Projects
Share in Total (%)
7. A few special projects sanctioned during the year are worth mentioning. Construction of fishing jetties worth `41 crore has been sanctioned to Maharashtra State with the aim of providing waterfront and shore-based infrastructure facilities for fishing activity. Modern amenities at the ports and jetties will help in reducing the turnaround time for fishing vessels.
8. Another project for development of Beel Fisheries has been sanctioned to Assam Govt. for undertaking a host of works like development of bund embankment, rearing & stocking centre, approach road, fish landing centre, removal of water hyacinth, etc.
9. A project worth `40 crore has been sanctioned to West Bengal Govt. for construction of potato cold storage to create storage capacity of 4,000 MT. With this West Bengal Govt. expects partially eliminating seasonal price fluctuation as also benefiting farmers in terms of avoiding distress sale.
10. Other notable/ innovative projects included Development of Forestry (West Bengal), Slaughter house and Meat marketing (Mizoram), Mini Hydel Projects (Nagaland), Rural Marts (Sikkim), etc. Though irrigation and rural connectivity continued to be the major areas, projects under soil conservation, watershed development, drainage & flood control schemes, systems improvement in rural electricity supply, rural drinking water schemes and rural health centres, etc., were also sanctioned during the year.
11. Cumulatively, 4,44,162 projects were sanctioned since the inception of RIDF with a sanctioned amount of `1,21,888.40 crore. Of the cumulative RIDF loans sanctioned to State Govts, 42% has gone to agriculture and allied sectors, including irrigation and power; 14% to health and education; while the share of rural roads and bridges was 32% and 12%, respectively. Sector-wise cumulative sanctions are indicated in Chart 3 below.
12. RIDF grew remarkably during the last five years. Total sanctions grew exceptionally by 43% during the last five years (RIDF XII to XVI). If `18,500 crore sanctioned to NRRDA is added to it, than the sanctions grew by about 58% during the same period. A graphic look at the last Five Years’ sanctions under RIDF is presented in the Chart 4 below.
Chart 4: RIDF Sanctions – Last Five Tranches
B. Drawals and Loan Outstanding
13. During the year, disbursements were made to the tune of `12,060.04. As per the phasing of projects under various tranches (RIDF I to XVI), the total amount sanctioned was `1,00,064.36 crore against which disbursements aggregated `80,499.78 crore, about 80% of the amount sanctioned. A graphic look at the last Five Years’ disbursements under RIDF is presented in the Chart 5 below:
Chart 5: RIDF Disbursements – Last Five Years
14. RIDF has come to occupy the pre-eminent position in NABARD’s balance sheet; its loan business and the income. Each drawal is a term loan for 7 years. RIDF directly contributes to creation of physical infrastructure and capital formation in rural areas. The outstanding loans under RIDF have fast increased in the past five years indicating better implementation of the projects, availability of more rural infrastructure and also enhanced income to NABARD (Table 2).
15. More Departments in the State Governments are participating in RIDF and coming up with greater diversification and project-mix. At 6.5%, RIDF is the cheapest source of long-term fund available to State Govts. In 2001-02, the disbursement was `3,790 crore. In 2010-11, it increased to `80,500 crore.Back then, there were cumulatively 1,12,749 projects for `22,683 crore; now it is 4,44,162 projects involving `1,21,888 crore.
16. It has also been observed that RIDF is now getting better distributed across the States -with greater share going to the less developed States and NE States. There is also more balanced investment across the sectors. The State-wise targets for RIDF sanctions and disbursements were set more rationally, in transparent and participatory manner.
17. The pace of project completion has been encouraging. The period of implementation of projects sanctioned under RIDF X was over by 31 March 2010 with over 88% utilization. The implementation period has been extended to 31 December 2011 for projects sanctioned under RIDF XI to XIII, to enable State Govts. to complete on-going projects and avail reimbursement of expenditure incurred there against. The improved efficiency of RIDF operations in the past years is also can be gauged by the fact that disbursements, as ratio, are far more --from out of ‘available pool of sanctions’. It speaks of quicker, greater utilization (Table 3 & Chart 6).
Table 3: RIDF Disbursement as per cent to Drawable Amount
Year of Disb.
No. of ongoing tranches
Aggregate Drawable Amount
III to IX
IV to X
V to XI
VI to XII
VIII to XIII
IX to XIV
X to XV
XI to XVI
XII to XVII
Chart 6: Annual Disbursements as % of ‘Balance Drawable’
18. RIDF allocations for sanctioning new projects during a ‘tranche-year’ are determined by a State’s socio-economic parameters. The minimum expected drawals during a financial year get automatically worked out with reference to the already sanctioned projects and their implementation schedules –or the ‘drawable pool’.
19. The overall ‘Tranche utilization’, from RIDF I (1995-96) to RIDF X (2004-05), –the closed tranches, has been around 88%. Total `42,000 crore were allocated during this period, against which the total disbursement was `36,906 crore (Table 4).
20. Of the aggregate `1,40,388 crore sanctions till RIDF XVI, NABARD sanctioned to State Govts. `1,21,888 crore. Of this, `80,500 crore (66%) has already been drawn by them. In addition, during 2007-08 to 2009-10, `18,500 crore was disbursed to NRRDA for rural roads under Bharat Nirman. The cumulative disbursement, including NRRDA, has been `99,000 crore, or 71% of the total sanctions, as given in the following table:
Table 4: Utilisation Trends
Cumulative Sanction Upto 31 March 11
31 Mar 11
I to X
21. Of the 1,69,710 projects sanctioned in RIDF I to X, 1,49,280 projects (88%) have been completed. Under the ongoing Tranches (XI to XV, as on 31 March 2011), total 2,33,096 projects were sanctioned, of which 1,17574 projects (50%) have been completed. Rest of the projects are under completion at various stages. Of the aggregate `80,000 crore allocation under ongoing tranches, `43,594 crore or 55% have already been disbursed.
D. Non-Starter Projects (NSPs)
22. A non-starter project is defined as one, which does not get grounded within one year of sanction. However, at any given time, this is a moving number as new projects get sanctioned and those already sanctioned get grounded, round the year
23. Better follow up and monitoring have ensured that there is a continuous fall in the number of non-starter projects.As on 31 March 2011, there were 4% projects in this category involving 7% of the total amount sanctioned. However, of these, 76% projects, involving 38% of the amount, pertained to just three States: Andhra Pradesh, Bihar and Karnataka.
24. The monitoring policy for RIDF projects was revisited to make it more effective for ROs. For RIDF, ROs play the key role of monitors and coordinators. As many as 5,552 projects were monitored by ROs during 2010-11. Monitoring is aimed at better implementation. Sanctioning a project in itself does not make any difference at the field level. Benefits to people start accruing only after works are completed. Delay in implementation causes cost and time over-run.