Karnataka fails to utilise Nabard's funds under RIDF

Since RIDF's inception in 1995-96, Karnataka govt has got a total sanction of Rs 10,008 cr, while disbursement is just Rs 7,051 cr

Karnataka, which ranks seventh in the infrastructure development index (106.12), has consistently failed to make use of funds under the Rural Infrastructure Development Fund (RIDF) created by the National Bank for Agriculture and Rural Development (Nabard) over the years. Its neighbours such as Tamil Nadu, Kerala and Andhra Pradesh have fared much better in utilising funds under RIDF.

Since the inception of RIDF in 1995-96, the government of Karnataka has got a cumulative sanction of Rs 10,008 crore, while the disbursement ratio is just 70.4 per cent at Rs 7,051 crore. Despite several reminders from the officials of Nabard, the government of Karnataka has failed to draw higher amounts under RIDF. However, the government has drawn its highest ever single year funds of Rs 708 crore in 2014-15, which is just 45 per cent of the total sanctions at Rs 1,560 crore.

“We have been discussing with the officials of Karnataka over the last many years to draw funds under RIDF up to their full capacity. We fail to understand why Karnataka has not taken funds, which come at such a low rate of interest. For FY15, the state has drawn its highest amount after we told them that the sanction limit will come down,” G R Chintala, Chief General Manager, Nabard, Karnataka Region, told Business Standard.

He said, states like Bihar, Rajasthan and even Telangana have drawn much higher amounts in 2014-15 compared to Karnataka. Bihar has taken the highest amount of Rs 2,500 crore, while new state Telangana has drawn Rs 2,000 crore.

Major sectors assisted under RIDF were minor irrigation, rural connectivity sector consisting of roads and bridges, agri infra projects such as veterinary hospitals, sericulture markets, fish jetties, rural godowns and rural market yards. Besides social infra projects such as primary health centres, taluk level hospitals, rural ITIs, polytechnics, agriculture colleges and pre-university colleges have also been assisted.

At all India level, during 2014-15, Nabard’s disbursements under RIDF, which provides loans to rural infrastructure projects to state govern- ments, were to the tune of Rs 19,600 crore taking the total to Rs 1,66,000 crore since its inception.

“Nearly one fifth of rural infrastructure in India is on account of RIDF. Projects under RIDF have brought 25.4 million hectares under assured irrigation, laid 400,000 kms of rural roads, erected 950,000 metres of rural bridges, established godowns with over 10 million metric tonne capacity and created non-recurring employment of over 11 billion man days,” Harsh Kumar Bhanwala, Chairman of Nabard, said in a statement.

Realising the importance of providing adequate infrastructure in rural areas for integrated rural development and faster growth of the economy, the government of India constituted the RIDF in the year 1995-96 under the aegis of Nabard. The fund was created with a view to assisting state governments in completing ongoing or new rural infrastructure projects in the areas of irrigation, roads and bridges, soil conservation, watershed management among others.

Nabard has also sanctioned proposals worth Rs 1,003 crore from Karnataka government for creating additional storage capacity of about 1.6 million tonnes under the Warehousing Infrastructure Fund (WIF) Scheme 2014-15.

In addition, an amount of Rs 243.18 crore for rural markets has been sanctioned by Nabard under the WIF in 2014-15, Chintala added.