Nabard formulating farm credit package for K'taka

The National Bank for Agriculture and Rural Development (Nabard) has estimated that the potential for credit development in Karnataka for 2006-2007 is to the tune of Rs 17,803 crore.

This includes Rs 8,401 crore of crop loans, Rs 2,483 crore as investment credit in agriculture and allied activities, besides Rs 6,919 crore for non-farm sector and other priority sector activities.

Addressing a press meet here to announce the bank's plan for 2006-07, B B Mohanty, Nabard's chief general manager for the Karnataka region, said in line with the expectations of the Union Budget, the bank will formulate a farm credit package to enable co-operative credit institutions to extend farm loans at 7 per cent.

A restructuring package for co-operative sugar mills will also be implemented, as envisaged by the Centre. But this is subject to support from the state government, he added.

Nabard will pursue with the state government implementation of the revitalisation package for the co-operative credit institutions finalised by Centre, based on the Vaidyanathan Committee recommendations. "The RRBs in the state will be provided all guidance to function more effectively post-merger," said Mohanty.

Under the Rural Infrastructure Development Fund (RIDF), the Union budget has provided a corpus of Rs 10,000 crore for RIDF-XII, apart from a separate allocation of Rs 4,000 crore for roads under the Bharat Nirman programme. Nabard expects the Karnataka government to pose projects of higher outlay for assistance during 2006-07.

According to Mohanty the overall assistance to the Karnataka government from Nabard in 2005-06 was Rs 2,410 crore, up nearly 10 per cent as against Rs 2,196 crore during the previous fiscal.

Nabard's assistance to banks in Karnataka is to the tune of Rs 1,951 crore towards production and investment credit in 2005-06, up from Rs 1,763 crore in 2004-05. Rs 451 crore of assistance to Karnataka for rural infrastructure and nearly Rs 8 crore grant for various promotional interventions.

Mohanty has asked the state government to accept and implement the recommendations of the committee on cooperative bank reforms. States like Maharashtra, Gujarat, Rajasthan, Madhya Pradesh, Orissa and Bihar have started implementing them, he said.