Urbanised states pocket rural fund

States with larger urban population have walked away with a larger share of the Rural Industrial Development Fund (RIDF), which is meant for upgrading rural roads.

Though over 80 per cent of the population in states like Himachal Pradesh, Bihar and Orissa lives in the rural areas, these states have managed to corner less than 3 per cent of the total Rs 12,367 crore sanctioned under RIDF since 1995-96.

Bihar, where 90 per cent of the population resides in rural areas, has not even managed 1 per cent for its rural roads programmes.

In contrast, states like Maharashtra and Tamil Nadu, where about half the population is urban, have got 9-12 per cent of the total sanctioned amount.

The RIDF was set up in 1995-96, financed through contributions from commercial banks falling short of their priority sector lending targets. The fund is operated through National Bank for Agricultural and Rural Development (Nabard), which releases funds for rural projects.

"The skew in favour of urban states is natural because these states have the resources to come up with viable project proposals," a Nabard official said.