The State Projects Department (SPD) provides loans from the Rural Infrastructure Development Fund (RIDF) with the objective of supporting public sector capital investment in rural infrastructure through providing low-cost fund support to State Governments and State-Owned Corporations. Over the years, RIDF has become an important source of public capital formation in the rural infrastructure space.

I. Rural Infrastructure Development Fund (RIDF)

A major policy initiative for rural infrastructure development has been the setting up of RIDF in NABARD in 1995 for financing rural infrastructure projects. RIDF was set up to fund infrastructure projects in States, which are incomplete due to lack of financial resources. Due to inadequacy of critical infrastructure, banks were unable to channelize their lending to agriculture as per priority sector guidelines.

The Government of India, therefore, announced setting up of Rural Infrastructure Development Fund (RIDF) in the budget of 1995-96, to be operationalised by NABARD towards financing of, at that time, the ongoing rural infrastructure projects in the irrigation sector. Subsequently, RIDF was made available for new rural infrastructure projects and its ambit was broad based to cover almost all-important aspects of rural infrastructure.

Resources to RIDF are contributed out of the shortfall in lending to priority sectors by Commercial Banks as stipulated by RBI.

a. Core functions of the Department

The corpus of a particular Tranche of RIDF is decided by Government of India every year. Annual Corpus under RIDF is allocated among all States on the basis of prescribed norms comprising of

• Geographical Area of the State
• Inverse of Composite Infrastructure Development Index
• Share in National Rural Population and Rural poverty rate
• Inverse of Credit/Deposit Ratio and inverse of per capita PS credit
• Performance under RIDF (Average disbursements and utilisation of drawables)
• Average sanctions for Agriculture (including Irrigation) and Drinking Water projects

The amount of contribution by banks to a particular Tranche of RIDF is communicated by RBI based on the level of priority sector shortfall. The concerned banks are called upon by NABARD as and when funds are required for disbursement.

NABARD provides financial assistance to the State Governments for projects covering 39 activities broadly classified under three heads, i.e. Agriculture & Related Sector, Social Sector, and Rural Connectivity.

Eligible projects are prioritised and submitted by the State Governments through their Finance Departments/Nodal Departments to the respective Regional Offices (ROs) of NABARD. The projects are appraised by NABARD’s Regional Offices and forwarded to NABARD Head Office where they are placed before Sanctioning Committee of the Board or Internal Sanctioning Committee (ISC) for consideration for sanction

Rural Infrastructure Promotion Fund (RIPF) has been created with an initial corpus of Rs 25 crore and operationalised from September 1, 2011 with an objective to promote capacity building among stakeholders as also for supporting innovative/experimental/promotional infrastructure especially in rural sectors. The activities/projects supported under RIPF are in the nature of experimental prototype projects, which are likely to have positive impact on promotion of sustainable infrastructure development in rural and agricultural sectors. Cumulative sanctions as on 31 October2024 stood at Rs. 5,72,216 crore and disbursements against the projects stood at Rs. 4,49,506 crore.

b. Broad achievements under RIDF

RIDF Tranche I was placed with NABARD during 1995-96 with an allocation of Rs 2,000 crore. The annual corpus has now reached to Rs.35000.00 crores under RIDF XXX (2024-25).

Cumulative Sanctions & Disbursements as on 31 October 2024

From RIDF I to XXX, NABARD has sanctioned total 7,83,013 projects involving loan assistance of Rs.5,72,216 crore to State Governments as on 31 October 2024 (including for warehousing projects).

Of this, an amount of Rs.4,31,006 crore (78%) has already been disbursed. In addition, Rs 18,500 crore was sanctioned and disbursed for rural roads under Bharat Nirman. This translates to total sanctions of Rs. 5,66,725 crore and total disbursements of Rs 4,49,506 crore.

c. Sector-wise Share of Cumulative Sanctions

Sector-wise cumulative RIDF loans sanctioned as on 31 October 2024, accounted for:

• Agriculture, irrigation and allied sectors (43%)
• Social sector (21%)
• Rural roads and bridges (36%)

The estimated cumulative economic and social benefits under RIDF as on 31 October 2024 were as under:

d. Benefits of RIDF Projects:

NABARD's support for creation of Rural Infrastructure through RIDF has resulted in considerable benefits such as:

• Commitment of funds under RIDF sanctioned projects has enabled State Governments to take up the implementation more expeditiously
• Financing incomplete projects has resulted in unlocking of investments already made by the State Governments, thus, realising the full benefits of the projects
• Creation of additional irrigation potential, generation of non-recurring employment and creation of jobs has contributed to the economic prosperity in the rural areas
• Monitoring of the projects has resulted in timely implementation of majority of the projects and has reduced the time and cost overrun Completion of projects through RIDF assistance from NABARD has helped in growth of core sectors in rural areas by spurring the demand for credit from Banks.

e. On-going projects and schemes:

State-wise, Tranche-wise details of closed/on-going projects/ schemes and broad sector-wise details are given in Annexure I and II.

• Annexure I
• Annexure II

(ii) Long Term Irrigation Fund (LTIF)

• LTIF was operationalized in NABARD during 2016-17 for fast tracking the completion of the 99 identified Medium and Major Irrigation projects, spread across 18 states, in mission mode. Subsequently, 04 other projects, viz., Polavaram project in Andhra Pradesh, North Koel project in Bihar and Jharkhand, Relining of Sirhind & Rajasthan Feeders in Punjab and Shahpur kandi Dam in Punjab were included under the ambit of LTIF.
• During 2016-2021, NABARD has provided loan towards Central share to National Water Development Agency (NWDA), SPV of Govt. of India, as well as State share to willing State Governments with a tenor of 15 years. So far 13 states have executed the MoA to avail funding assistance from NABARD.
• From 2021-22 onwards, the funding arrangement is being continued towards meeting State share only for the 60 ongoing AIBP projects and 85 ongoing CADWM major/medium irrigation projects (out of the 99 irrigation projects) with GoI interest subvention up to 2% only. Funding requirements for central share will be met through budgetary resources of GoI.
• During 2024-25, no loan amount has been sanctioned and loan amount of Rs 45.55 has been released under LTIF for State share. The cumulative loan sanctioned and released as on 31 October 2024 is Rs 85,790.78 crore (Central Share- Rs 46,495.93 crore & State Share- Rs 39,294.85 crore) and Rs 61,396.47 crore (Central Share -Rs 26,500.60 crore & State Share - Rs 34,895.87 crore), respectively.
• Out of the 99 projects, Accelerated Area Benefited Programme (AIBP) component of 58 projects and Command Area Development & Water Management (CAD&WM) component of 16 project have been completed. The funding assistance extended during 2016-23 in respect of 99 irrigation projects has facilitated creation of irrigation potential of 25.20 lakh ha against the targeted irrigation potential of 34.63 lakh ha. Further, 21.15 lakh hectare Culturable Cultivated Area has been developed under Command Area Development &Water Management programme. (Source-MoJS, GoI)

Table: The details of State-wise sanction and release of funds under LTIF as on 31 October 2024 are given as under:

III. Micro Irrigation Fund (MIF)

• MIF with an initial corpus of Rs 5000 crore was operationalized in NABARD in 2019-20 to facilitate State Govts. efforts in mobilizing additional resources for expanding coverage under micro irrigation and incentivizing its adoption beyond provisions of Pradhan Mantri Krishi Sinchayee Yojana-Per Drop More Crop. The MIF funding arrangement for the initial corpus was in operation upto 31 July 2024, with the existing terms and conditions. As announced in Union Budget 2021-22, augmentation of MIF corpus by another Rs 5000 crore and its implementation upto FY 2025-26 is under consideration of GoI.
• The MoA & FW, GoI has conveyed that, the continuation and augmentation of the MIF by another Rs.5000 Crore for 15th Finance Commission period has been approved by Union Cabinet in its meeting dt. 03.10.2024. Further, the interest subvention by GoI is now 2% instead of earlier 3%.
• During 2024-25, no loan amount has been sanctioned and loan amount of Rs 251.68 has been released. Cumulative loan sanctioned stood at Rs 4719.10 crore, against which Rs 3639.49 crore has been released as on 31 October 2024.

Table: The details of State-wise sanction and release of funds under MIF as on 31 October 2024 are given as under:

The sanctions made by NABARD till date under MIF envisages expansion of micro irrigation coverage by an area of 20.51 lakh ha. Out of this, an area of 16.63 lakh ha has been covered by the States as on 31 March 2024 (Source-MoA&FW, GoI).

(iv) Pradhan Mantri Aawas Yojana - Grameen (PMAY-G)

• Government of India launched PMAY–G with effect from 1 April 2016 in order to provide a pucca house with basic amenities like electricity, cleaned safe water, sanitation, LPG under “Housing for all by 2022”, programme for the poor homeless and /or living in dilapidated dwellings in rural areas. Under PMAY-G, NABARD has extended loan from 2017-18 to 2020-21 to National Rural Infrastructure Development Agency (NRIDA), SPV of GoI towards part funding of Central share. The cumulative sanction and disbursement under PMAY-G stood at Rs. 61,975 crore and Rs. 48,819.03 crore respectively. Loan assistance released by NABARD under PMAY-G has facilitated construction of 1.77 crore houses as on 31 March 2022. (Source: MoRD, GoI website).

(v) Swachh Bharat Mission-Gramin (SBM-G)

• In order to accelerate the efforts to achieve universal sanitation coverage and eliminate open defection in rural areas, NABARD has extended loans during 2018-19 and 2019-20 to National Centre for Drinking Water, Sanitation & Quality (NCDWS&Q), a SPV of GoI, towards part funding of Central share under the Scheme. The cumulative sanction and disbursement as on 31 March 2020 under the scheme stand at Rs. 15,000.00 crore and Rs. 12,298.20 crore, respectively.

VIDEOS:

• RIDF Digitisation with Dedicated Web Portal and Mobile App by NABARD

Contact Information

Dr K Inkarsal
Chief General Manager
8th Floor, 'D' Wing
C-24, 'G' Block
Bandra-Kurla Complex
Bandra (East), Mumbai 400 051
Tel: (91) 022- 68120051 (91) 022-26539238

Information under RTI – Section 4(1)(b)