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RURAL INFRASTRUCTURE DEVELOPMENT FUND (RIDF) In the Union Budget Speech 1995-96, Hon'ble Finance Minister announced that- "Inadequacy of public investment in agriculture is today a matter of general concern. This is an area, which is the responsibility of States. But many States have neglected investment in infrastructure for agriculture. There are many rural infrastructure projects, which have been started but are lying incomplete for want of resources. They represent a major loss of potential income and employment to rural population." Rural Infrastructure Development Fund, under the aegis of NABARD, provides loans to the State governments to attend to the needs of rural infrastructure to accelerate completion of ongoing irrigation projects, including Watershed Development & Soil Conservation etc. The scope of RIDF will also be widened to allow lending to Gram Panchayats, Self-Help Groups and other eligible organisations for implementing village-level infrastructure projects. The Fund was to be raised from the commercial banks to the extent of their shortfall in agricultural lending. The Fund has continued and the corpus is announced every year during the budget. Though the initial thrust had been on irrigation projects, the development of rural roads and bridges has received a major boost since the time of RIDF-II. Subsequently, many other activities were gradually added to the list of eligible activities under RIDF. The activities, which have been made eligible for loans from RIDF, include rural roads and bridges; irrigation, mini and small hydel projects; community irrigation wells; soil conservation, watershed development and reclamation of waterlogged areas; flood protection; drainage; forest development; market yard, godowns, apna mandi, rural haats and other marketing infrastructure; cold storages; seed/agriculture/horticulture farms; plantation and horticulture; grading and certifying mechanisms such as testing and certifying laboratories; fishing harbour/jetties; riverine fisheries; animal husbandry; modern abattoir; drinking water supply; infrastructure for rural educational institutions; public health institutions; construction of toilet blocks in existing schools and “pay and use” toilets in rural areas; village knowledge centres; desalination plants in coastal areas; infrastructure for information technology in rural areas; and construction of anganwadi centres. The projects pertaining to eligible sectors under each RIDF tranche are submitted by the State Governments through their Finance department to NABARD’s Regional Offices. The project proposals are scrutinized and appraised by the Regional Office with the help of Consultants by conducting desk and field appraisal. Appraisal reports submitted by the ROs are then scrutinised by State Projects Department at HO before placing the same to Sanctioning Committee (SC) for consideration of sanction. Normally seven or eight meetings of SC are held in a year to sanction loans from the RIDF corpus. Sanctioning process under RIDF XIII (2007-08) has been operationalised and completed. Process of sanctions under RIDF-XIV and disbursements under ongoing tranches is in progress. Sanction of projects is communicated to the State Governments by a sanction letter which consists of General Terms and Conditions as well as Special Terms and Conditions / suggestions which are project specific. Initially, only Sate Governments were eligible to borrow out of RIDF on project basis. However, Panchayat Raj Institutions (PRIs), Non- Governmental Organisations. Self-Help Groups, etc. were made eligible to borrow out of RIDF w.e.f. 1st April 1999
5. Activities/Sectors financed under RIDF Only ongoing Irrigation, Flood Protection, Watershed Management projects were financed under RIDF-I as a 'last mile approach' to facilitate completion of the projects delayed on account of financial constraints. The financing of rural Road & Bridge projects was started during RIDF-II. Subsequently, coverage of RIDF was broad-based in each tranche and at present, a wide range of 31 activities such as Primary and Secondary Schools, Primary Health Centres, Village Haats, Joint Forest Management, Terminal and Rural Market/ Godowns, Rain Water Harvesting, Watershed development, Flood Protection, Drainage, Cold Storage, Riverine Fisheries, Fishing Harbour & Jetties, Mini/Small Hydel Projects (upto10 MW) in Power Sector, Rural Drinking Water Supply Schemes, Village knowledge Centres, Modern abattoir, Seed/Agri./ Horticulture Farms, Anganwadi Centres, Rural Industrial Estates (KVIC)/ Centres etc. are being financed under RIDF. 6. Rate of Interest on RIDF Loan The rate of interest on outstandings under various tranches are as under :
@ w.e.f. 16 April 2005 for loans disbursed on or before 31 October 2003 7. Differential Rate of Interest to Banks The rates of interest on deposits received from the banks under tranches I to VI were less by 0.5% than the rates of interest charged by NABARD on RIDF loans to the State Govts. With a view to encouraging commercial banks to enhance flow of direct credit to agriculture, it was decided by RBI to link interest on bank contribution to RIDF, from Tranche-VII, to the extent of the shortfall of their agriculture lending vis-a-vis the targets. The inversely proportional rate of interest paid to commercial banks at present is as under:
As per the guidelines of RBI/GOI, NABARD retains a margin of 0.5% on cost basis for administering RIDF. The differential interest, however, is credited to the Tribal Development Fund maintained by NABARD. The repayment period of 5 years including a 2 year grace period was provided under RIDF-I to RIDF-V. The repayment period has, however, been extended to 7 years including a grace period of 2 years since RIDF-VI and the same is continuing. The corpus of RIDF is allocated among all States on the basis of norms approved by the SC. Currently, the allocation norms provide weightage to Rural Population (20%), Geographical Area of the State (20%), Inverse of Infrastructural Development Index (20%), inverse of Rural CD Ratio (15%), availment of sanction (5%) and disbursements(20%) in the past tranches. Some of the State Governments are not able to fully utilise the allocation and the State-wise allocations are reviewed by SC from time to time and appropriately reallocated. The Finance Departments of the State Governments act as Nodal Departments for operationalising RIDF. The project proposals are routed through the Finance Department only and no proposal is accepted directly from any other Department of the State Government. All other related items of work like submission of drawals applications under sanctioned projects, release of loan, execution of documents, repayment of loans, etc., are attended to by Finance Departments of the State Governments. Regional Offices receive the detailed project reports from State Governments based on their priorities and within the priorities/activities decided under RIDF. The detailed project reports are subject to field and desk appraisal by a team comprising of NABARD officers as well as consultants, who are normally senior retired officers of the concerned departments of State/Central Government. Besides normal documents such as acceptance of General and Special Terms & Conditions of sanction, Time Promissory Note (TPN), the State Government has to execute mandate with the RBI authorizing the latter to debit their current account and pay to NABARD in case of any default in payment of principal or repayment of interests on due date. The State Governments are required to furnish a certificate to the effect that the advances drawn are within the limits prescribed by the State Legislative Assembly under Article 293(1) as also within the borrowing limit fixed by the Government of India under Article 293(3) of the Constitution of India as per Form I. Loans will be available as per the following norms for sectors covered under RIDF-XIV :
The normal phasing (Project implementation Period) upto RIDF-XIII was 3 years. Since, RIDF-XIV phasing for implementation of projects has been revised as under : a. Projects from other States :
However, if there are constraints, phasing is extended for the Tranche as a whole or for specific projects to enable the State Governments to complete the projects. Loans are released on reimbursement basis against the actual expenditure incurred in execution of sanctioned projects. RIDF loans are released to the State Governments by Regional Offices of NABARD. It is expected that RIDF projects would be completed on time within the approved cost. Proposals for cost escalation are considered based on merits. 17. Monitoring of RIDF Projects Monitoring of projects is basically the responsibility of the State Governments. Yet an effective monitoring mechanism developed by NABARD is one of the strong features of RIDF. Currently, 9000-10,000 projects, which constitute about 9% of the ongoing projects, are annually field monitored by Districts Development Managers, other officers of ROs and Consultants. Selective sector-wise monitoring is undertaken by the HO and through external agencies also. In addition to the field monitoring, institutional mechanism has been developed for sectoral and project-wise review at the level of Superintending Engineers, Chief Engineers, Head of the Departments, Administrative Secretaries & Chief Secretaries to facilitate timely completion of RIDF projects. The mechanism has stabilised and is working satisfactorily. NABARD also organizes capacity building workshops for the Govt. staff working in various line departments connected with RIDF projects. 19. Announcement of RIDF XIV for 2008-09 a) While presenting the Union Budget, Hon’ble Finance Minister announced that the corpus of RIDF XIV has been increased to Rs. 14000 crore to be implemented during 2008-09. The following activities will be covered under RIDF XIV:
For further details Click here Source http://www.nabard.org/ridf/genesisofridf.asp http://www.tnrd.gov.in/schemes/st_nabard.html http://www.nabard.org/ridf/model_rainwater.asp http:/indiabudget.nic.in http://pib.nic.in/archieve/ppinti/ppi99wr.html
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