According to a recent press report the loans offered to state governments by the National Bank for Agriculture and Rural Development (NABARD) has crossed the Rs 1,00,000-crore mark and currently stands at Rs 1,02,844 crore as on September 30, 2011. The lending includes loans offered to 28 states and the Union Territory of Pondicherry in order to help the rural roads component of Bharat Nirman.
Reports said that maximum funds were utilised for irrigation and agriculture (40%), followed by rural roads (33%), rural bridges (12%), rural drinking water supply (9%) and social sector (6%).
Reports also said that the Rural Infrastructure Development Fund (RIDF) was set up with the Nabard by the Union government in 1995-96 with an initial amount of Rs 2,000 crore. The funds were supplied by the RBI from scheduled commercial banks in proportion to the extent of their shortfall in agriculture lending.
Reports added saying that Rs 2,000 crore has been allocated specifically for creation of warehousing infrastructure in different states.
This has opened a new channel of funding from the bank to support streamlining of presently available at 6.5% interest per annum to storage of food grains at the production, distribution and consumption levels, not only for state governments, but also for government owned/supported entities and private sector entities, which supplement storage requirements for agricultural and allied sector.