Beruflich Dokumente
Kultur Dokumente
EXECUTIVE SUMMARY
T h e p a r l i a me n t t hr o u g h Ac t 6 1 o f 8 1 s e t u p N a t i o n a l
B a n k f o r Ag r i c u l t ur a l a n d R u r a l D e v e l o p me n t [ N A B A R D ]
a f t e r t h e f o r m e r c h a i r ma n o f R e s e r v e B a n k o f I n d i a S h r i .
B . S i v a r a m a n s u b m i t t e d a r e p or t t o t h e G o v e r n o r o n
N o v e m b e r 2 8 , 1 9 7 9 . Th e c o m mi t t e e s e t u p b y S i v a r a ma n
r e v i e w e d t h e a r r a n g e me n t s f o r I n s t i t u t i o n a l C r e d i t f o r
A g r i c u l t ur e a n d R u r a l D e v e l o p me n t C R A F I C A R D .
Th e o bj e c t i v e s o f N A B A R D w a s t o b e a b l e t o p r o v i d e
a d e q u a t e a s s i s t a n c e t o t h e m i l l i o n s o f f a r me r s i n r ur a l
I n d i a w h o w e r e n ot b e i n g gi v e n a n y i mp o r t a n c e i n t h e
q u i c k a n d e v er r i s i n g e c o n o m i c b o o m t h a t w a s h a p p e n i n g
with
Indian
markets
and
industries.
Th e
c o m mi t t e e
d e c i d e d o n t h e f a c t t h a t t h e Ag r i c u l t ur a l s e c t o r d e s e r v e d
a s m u c h a t t e n t i o n a s t h e o t h er s e c t o r s , i t b e i n g a s o u r c e s
of
e c o n o my
that
India
l a rge l y
depends
on
thus
the
c o m mi t t e e r e a l i z e d t h a t t h e h u g e c r e d i t t h a t t h e s e c t o r
w o u l d r e q u i r e t o a c h i e v e a n y k i n d o f d e v e l o p m e n t . Th e r e
w a s a r e q u i r e m e n t f o r i n c o r p or a t i o n o f t h e c r e d i t sy s t e m
a n d r u r a l a gr i c u l t u r a l d e v e l o p m e n t .
N A B A R D ' S t a s k w a s t o b e t o pr o m o t e i n n o v a t i o n s a n d
e n c o u r a g e i n i t i a t i v e s i n t h e a g r i c u l t ur a l s e c t o r a n d a l s o t o
p r o mo t e s u b s t a n t i a l a n d e q u i t a b l e a g r i c u l t u r a l a n d t h e
r ur a l d e v e l o p m e n t w h i c h w a s l o n g d u e t o t h e I n d i a n
f a r me r s t hr o u g h e ffe c t i v e cr e d i t s u p p o r t a n d o t h er s e r v i c e s
which would be required to attain its mission and also
i n f r a s t r u c t ur e
and
institutional
1
building
through
the
had
mu l t i p l e
issues
to
deal
with
r e g ar d i n g
p r o b l e m.
Th e
p r oj e c t
concentrates
on
N A B A R D c o mp l e t e l y i t d i s c u s s e s a b o u t i t cr e d i t a n d o t h er
f u n c t i o n s a n d i t s r ol e i n I n d i a n a g r i c u l t ur a l s e c t o r.
Index
Sr
CONTENTS
No.
1
2
3
Design of study
Introduction to NABARD
NABARD funding, associates,
4
5
6
7
8
9
10
11
12
Design of study
Objectives
To study the role of agriculture in Indian economy.
3
Methodology
This is project is completely based on secondary data.
The project is completed by going through various books on
Indian agriculture, role of NABARD in this field etc.
The project is based on various references taken from books
as well as various websites mentioned in the bibliography at the
end.
Scope
Within the scope of this project, the project will discuss the
topic which is the relation of NABARD with Indian agriculture
sector and will try to analyze through its various schemes and
funds whether its legislative intent has been fulfilled.
4
CHAPTER 1
INTRODUCTION TO
NABARD
INTODUCTION
HISTORY
MISSION
COMPANY
OBJECTIVES
t h e f i e l d o f c r e d i t f o r a g r i c u l t ur e a n d e c o n o mi c a c t i v i t i e s
i n r ur a l a r e a s . N A B A R D o p e r a t e s t hr o u g h o u t t h e c o u n t r y
t h r o u g h i t s h e a d o ffi c e a t M u mb a i , 2 5 r e g i o n a l o ffi c e s a n d
s u b - o ffi c e s , l o c a t e d i n t h e c a p i t a l s o f a l l s t a t e s / u n i o n
territories. It also has 4 training establishments. It takes
measures
towards
institution
building
for
i mp r o v i n g
etc...
it
c o or d i n a t e s
the
r ur a l
financing
attention
to
the
details
of
c o mp l e x
credit
p r o b l e ms o f i n t e g r a t e d r u r a l d e v e l o p m e n t i n t h e m i d s t o f
i t s m u l t i f a r i o u s a n d g r o w i n g r e s p o n s i b i l i t i e s i n v ar i o u s
o t h e r f i e l d s . Th i s w a s t h e p r o b l e m o f R B I u n t i l 1 9 8 1 . I n
7
to
rectify
A g r i c u l t ur e
and
this
p r o b l e m,
Rural
National
Development
Bank
for
(NABARD)
was
device
to
pr o v i d e
undivided
attention,
G o v e r n me n t ,
planning
Commission,
State
g o v e r n me n t s a n d i n s t i t u t i o n s a t a l l I n d i a a n d St a t e l e v e l s
e n g a g e d i n g i v i n g e ffe c t t o t h e v a r i o u s p o l i c i e s a n d
p r o gr a m m e s r e l a t i n g t o r ur a l c r e d i t . As a d e v e l o p m e n t
b a n k f o r t h e r u r a l s e c t o r, N A B A R D w i l l h a v e s p e c i a l
responsibility to ensure that the training facilities for the
b a n k s t a ff e n g a g e d i n r ur a l l e n d i n g ar e a d e q u a t e . To t h e
extent
that
the
training
schemes
are
sponsored
and
f i n a n c e d by t h e Ag r i c u l t ur a l R e f i n a n c e a n d D e v e l o p me n t
Corporation
(ARDC),
these
will
a u t o ma t i c a l l y
stand
t r a n s f e r r e d t o N A B A R D . Th i s i s a f i e l d i n w h i c h t h e R B I
8
to
coordination,
rural
credit.
research,
It
training,
provides
etc.,
refinance
lo
Th e
operations)
National
and
the
Rural
Credit
National
Fund
Rural
( l o n g - t er m
Credit
Fu n d
( S t a b i l i z a t i o n) .
Th e C e n t r a l a n d S t a t e G o v e r n me n t s c o n t r i b u t e t o t h e
fund.
Th e
NABARD
operates
9
t hr o u g h o u t
the
country
1.2 HISTORY
N A B A R D w a s e s t a b l i s h e d o n t h e r e c o m me n d a t i o n s o f
S h i v a r a ma n C o m m i t t e e , ( by a c t 6 1 , 1 9 8 1 o f P a r l i a me n t ) o n
12
July
1982
to
i mp l e m e n t
the National
Bank
for
A g r i c u l t u re a n d R u r a l D e v e l o p m e n t Ac t 1 9 8 1 . I t r e pl a c e d
t h e Ag r i c u l t ur a l
Credit Department
(ACD)
and Rural
P l a n n i n g a n d C r e d i t C e l l ( R P C C ) o f R E S E RVE B A N K
INDIA
and
Ag r i c u l t ur a l
Refinance
and
OF
D e v e l o p me n t
C o r p o r a t i o n ( A R D C ) . I t i s o n e o f t h e p r e mi e r a g e n c i e s t o
provide
credit
in
rural
areas.
10
NABARD
is
India's
As o n 3 1
March
stood
2014,
NABARD
paid
up
capital
at
R s . 4 7 0 0 c r o r e ( R s . 4 6 8 0 C r o r e o f G oI a n d R s . 2 0 C r o r e o f
RBI).
I n t e r n a t i o n a l a s s o c i a t e s o f N A B A R D r a n g e s f r o m Wor l d
B a n k - a ffi l i a t e d
o r ga n i z a t i o n s
to
global
developmental
Th e s e
o r ga n i z a t i o n s
help
NABARD
by
a d v i s i n g a n d g i v i n g m o n e t a r y a i d f o r t h e u pl i f t me n t o f t h e
p e o p l e i n t h e r u r a l a r e a s a n d o pt i m i z i n g t h e a g r i c u l t u r a l
process.
1.3 MISSION
P rom o t e s u s t a i n a b l e a n d e q u i t a b l e a g r i c u l t u re a n d
r u r a l p ros p e r i t y t h rou g h e f f e c t i v e c red i t s u p p o r t , rel a t e d
services, institutions development and other innovation
initiatives.
1.7 COMPANY
11
required
institute
by
to
accounting
its
help
n e t w or k s
address
disclosure,
NABARD
issues
high
of
created
this
transparency
transaction
costs,
in
p o or
d i v e r s i f i c a t i o n o f pr o d u c t s , a n d h i g h r a t e s o f i n t e r e s t s .
N A B A R D s
dispersion
ability
is
to
strongly
market
the
enhanced
innovative
t hr o u g h
use
credit
of
its
network.
12
To
pr o v i d e
refinance
facilities
to
State
Land
D e v e l o p m e n t B a n k s ( S L D B s ) , St a t e C o - o p e r a t i v e B a n k s ,
(SCBs), Regional Rural Banks (RRBs) and Commercial
B a n k s ( C B s ) f o r d e v e l o p m e n t p u r p o s e s i n r ur a l a r e a s ;
7 . To C o - or d i n a t e t h e w o r k i n g o f
d i ffe r e n t a g e n c i e s
e n g a g e d i n d e v e l o p me n t w o r k i n r ur a l a r e a s a t t h e r e g i o n a l
l e v e l , a n d t o h a v e l i a i s o n w i t h G o v e r n me n t o f I n d i a , R B I ,
S t a t e G o v e r n m e n t a n d o t h e r p o l i cy m a k i n g i n s t i t u t i o n s a t
the national level; and 150
8 . To i n s p e c t , m o n i t o r a n d e v a l u a t e p r o j e c t s g e t t i n g
refinance from the NABARD14. It was indeed a singular
m i s f o r t u n e o f t h e I n d i a n Ag r i c u l t u r a l B a n k i n g S y s t e m t h a t
i t d i d n o t h a v e a n a t i o n a l l e v e l c o mp o n e n t a t t h e t o p e v e n
a f t e r t hr e e a n d a h a l f d e c a d e s o f c o u n t r y s i n d e p e n d e n c e .
The Reserve Bank of India set up a Committee to Review
t h e Ar r a n g e me n t s f o r I n s t i t u t i o n a l C r e d i t f o r Ag r i c u l t ur e
a n d R u r a l D e v e l o p me n t ( C R A F I C A R D ) w h i c h s u b mi t t e d
i t s i nt e r i m R e p o r t i n N o v e m b e r 1 9 7 9 . Th e C R A F I C A R D
m a d e r e c o m me n d a t i o n s f o r t h e e s t a b l i s h me n t o f N A B A R D
a s a n a p e x i n s t i t u t i o n f o r a gr i c u l t u r a l f i n a n c i n g .
13
CHAPTER 2
NABARD- FUNDING,
ASSOCIATES,
SUBSIDARIES AND
STRUCTURE
FUNDING
ASSOCIATES
SUBSIDARIES
STRUCUTR
2.1 FUNDING
14
Ter m
O p e r a t i o n s , [ N R C - LTO]
[stabilization]
Fund,
as
well
Fund
as
&
from
the
NRC
Bonds
and
liabilities.
Th e s e
funds
are
p r i ma r i l y
meant
for
that
N A B A R D s
funding
c u r r e n cy
significantly
o p er a t i o n s
from
loans
RBI,
etc.
influence
include
GOI,
the
continuing
c o m me r c i a l
Committed
success
of
to
receive
banks,
foreign
financial
backing
the
o r ga n i z a t i o n i s c r i t i c a l f o r o p e r a t i o n s s u s t a i n a b i l i t y. Th e
f i n a n c i a l c r i s i s d ur i n g 2 0 0 7 - 0 8 pr e s e n t e d a pr e c a r i o u s
situation
as
funding
worldwide
was
scaled
back.
N A B A R D s a b i l i t y t o p e r c e i v e t hr o u g h s u c h c r i s i s a n d
c o n t i n u e t o c o v e r t h e i r c o s t s i s a d e t er m i n i n g f a c t o r t o
p u r s u e n e w i n i t i a t i v e s a n d p r o gr a m s .
2.2 ASSOCIATES
15
of
G e r ma ny
&[viii]
O r ga n i z a t i o n
of
Petroleum
E x p or t i n g C o u n t r i e s . Th e a s s o c i a t e s p l ay k ey r o l e i n
f u n d i n g p r o j e c t s a n d a s s i s t i n g i n p r o j e c t i m p l e me n t a t i o n
through
sustained
p a r t n er s h i p .
Th e
associates
o ffe r
f i n a n c i a l a n d a d v i s o r y s u p p o r t f o r i m p l e me n t i n g s c h e m e s
t h a t a r e a i m e d a t u p l i f t i n g t h e r u r a l p o or a n d m a k i n g
a g r i c u l t u r a l pr o c e s s e s e ffe c t i v e a n d y i e l d i n g . Fi n a n c i a l
s u p p o r t a n d a d v i s o r y r o l e o f Wor l d B a n k G r o u p a n d
continuation of Memorandum of Understanding between
NABARD & its associates would be a critical factor for
successful
pr o g r a m
i mp l e me n t a t i o n
and
carrying
out
N A B A R D s m i s s i o n .
2.3 SUBSIDIARIES
N A B A R D h a s t w o s u b s i d i a r y o rga n i z a t i o n s , v i z , t h e
NABARD
Bankers
Consultancy
Institute
of
S er v i c e s
Rural
[NABCONS]
D e v e l o p me n t
and
the
[BIRD].
N A B C O N S i s e n g a g e d i n p r o v i d i n g c o n s u l t a n cy s e r v i c e s
16
especially
encompassing
banking,
mu l t i d i s c i p l i n a r y
institutional
projects
d e v e l o p me n t ,
i n f r a s t r u c t ur e , t r a i n i n g e t c . B I R D pr i m a r i l y a c t s a s a
t r a i n i n g f a c i l i t y pr o v i d i n g i n f o r ma t i o n n e e d s o f r u r a l
b a n k e r s t hr o u g h i t s t o p i c a l t r a i n i n g p r o gr a m s & s e mi n a r s .
17
CHAPETR 3
INTRODUCTION TO
INDIAN AGRICULTURAL
SECTOR
INTODUCTION
PRESENT SCENARIO
FEATURES
18
3.1 INTRODUCTION
Ag r i c u l t u r e S e c t or o f I n d i a n E c o n o my i s o n e o f t h e
m o s t s i g n i f i c a n t p a r t s o f I n d i a . Ag r i c u l t u r e i s t h e o n l y
m e a n s o f l i vi n g f o r a l mo s t t w o- t h i r d s o f t h e e m p l oy e d
c l a s s i n I n d i a . As b e i n g s t a t e d by t h e e c o n o mi c d a t a o f
financial
y e ar
2006-07,
agriculture
has
acquired
18
p e r c e n t o f I n di a ' s G D P.
Th e a gr i c u l t u r e s e c t o r o f I n d i a h a s o c c u p i e d a l mo s t 4 3
p e r c e n t o f I n di a ' s g e o g r a p h i c a l a r e a . Agr i c u l t u r e i s s t i l l
t h e o n l y l a r ge s t c o n t r i b u t o r t o I n d i a ' s G D P e v e n a f t e r a
d e c l i n e i n t h e s a me i n t h e a g r i c u l t u r e s h a r e o f I n d i a .
A g r i c u l t ur e a l s o p l a y s a s i g n i f i c a n t r o l e i n t h e gr o w t h o f
socio-economic sector in India.
I n t h e e a r l i er t i m e s , I n d i a w a s l a r ge l y d e p e n d e n t u p o n
f o o d i m p o r t s b u t t h e s u c c e s s i v e s t o r i e s o f t h e a g r i c u l t ur e
s e c t o r o f I n d i a n e c o n o my h a v e m a d e i t s e l f - s u ffi c i n g i n
grain
production.
Th e
country
also
has
substantial
19
a gr i c u l t u r e .
Considering
the
quantum
leap
w i t n e s s e d by t h e w h e a t a n d r i c e p r o d u c t i o n u n i t o f I n d i a ' s
a g r i c u l t u r e , a N a t i o n a l P u l s e D e v e l o p m e n t Pr o g r a m m e t h a t
covered almost 13 states was set up in 1986 with the aim
to introduce the improved technologies to the farmers. A
Tec h n o l o gy M i s s i o n w a s i n t r o d u c e d i n 1 9 8 6 r i g h t a f t e r t h e
s u c c e s s o f N a t i o n a l Pu l s e D e v e l o p me n t P r o gr a m m e t o
b o o s t t h e o i l s e e d s s e c t o r i n I n d i a n e c o n o my. Pu l s e s t o o
c a m e u n d er t h i s pr o g r a m m e . A n e w s e e d p o l i cy w a s
p l a n n e d t o p r o v i d e e n t r e e t o s u p e r i or q u a l i t y s e e d s a n d
plant material for fruits, vegetables, oilseeds, pulses, and
flowers.
Th e I n d i a n g o v e r n me n t a l s o s e t u p M i n i s t r y o f F o o d
P r o c e s s i n g I n d u s t r i e s t o s t i m u l a t e t h e a gr i c u l t u r e s e c t o r o f
Indian
e c o n o my
agriculture
sector
and
make
highly
it
mo r e
depends
lucrative.
upon
the
India's
monsoon
irrigation
area,
i mp r o v e d
water
management,
i m p r o v i n g t h e s o i l q u a l i t y, a n d di v e r s i fy i n g i n t o h i g h
v a l u e o ut p u t s , f r u i t s , v e g e t a b l e s , h e r b s , f l o w e r s , m e d i c i n a l
p l a n t s , a n d b i o- d i e s e l a r e a l s o o n t h e l i s t o f t h e s e r v i c e s t o
be
taken
by
the
Green
Revolution
to
improve
the
agriculture in India.
and
reforms
in
the
agriculture
s e c t o r.
A c c o r d i n g t o t h e s u r v ey, G D P d e c l i n e d t o 1 5 . 2% d ur i n g
the Eleventh Plan and then fur ther decreased to 13.9% in
2 0 1 3 - 1 4 . Th e r e a l s o h a s b e e n d e c r e a s e i n t h e n u m b e r o f
c u l t i v a t o r s f r o m 1 2 7 . 3 m i l l i o n ( C e n s u s 2 0 0 1 ) t o 118 . 7
m i l l i o n ( C e n s u s 2 0 11) .
Ac c o r d i n g t o t h e E c o n o m i c S ur v e y, g r o w t h r a t e s o f
p r o d u c t i v i t y i n a gr i c u l t u r e s e c t o r a r e f a r b e l o w g l o b a l
standards; productivity levels of rice and wheat have
d e c l i n e d a f t e r t h e g r e e n r e v o l u t i o n o f t h e 1 9 8 0 s . An o t h e r
i s s u e i s s o i l d e g r a d a t i o n d u e t o d e c l i n i n g f e r t i l i z e r- u s e
21
the
food
subsidy
has
increased
s u b s t a n t i a l l y i n t h e p a s t f e w y e a r s . F o o d s u b s i dy w a s R s .
9 2 , 0 0 0 c r o r e i n 2 0 1 3- 1 4 .
Wit h 6 0 p e r c e n t o f t h e t o t a l f o o d g r a i n s a n d o i l s e e d s
produced being grown in the kharif season, and with just
about 35 per cent of arable area being irrigated, Indian
a g r i c u l t u r e i s s t i l l d e p e n d e n t o n r a i n f a l l . Th e s e c o n d l o n g r a n g e f o r e c a s t f o r t h e c ur r e n t y e ar b y t h e I M D f o r
monsoon season indicates that the monsoon rainfall is
l i k e l y t o b e 9 3 p e r c e n t o f t h e L PA ( m o d e l e r r or 4 p e r
c e n t ) , w i t h 7 1 p er c e n t pr o b a b i l i t y o f s u b n o r ma l / d e f i c i t
r a i n f a l l a n d 7 0 p e r c e n t o c c u r r e n c e o f E l N i n o . Th e
g o v e r n me n t h a s p u t i n pl a c e c o n t i n g e n c y m e a s u r e s i n
about 500 districts.
C u r r e n t l y, I n d i a i s i n a n a n o m a l o u s s i t u a t i o n o f b e i n g
l a r ge l y s e l f - s u ffi c i e n t w i t h l a r ge s t o c k s o f f o o d g r a i n s o n
the one hand and registering high food inflation.
O n d o m e s t i c a n d i n t e r n a t i o n a l m a r k e t i n g , t h e pl e t h o r a
o f g o v e r n me n t i n t er v e n t i o n s t h a t w e r e u s e d t o b u i l d a
m a r k e t i n g s e t u p h a v e a c t u a l l y s e r v e d a s b a r r i er s t o t r a d e .
Removing
market
distortions
will
cr e a t e
greater
c o m p e t i t i o n i n m a r k e t s , p r o mo t e e ffi c i e n cy a n d gr o w t h
and facilitate the creation of a national
agricultural
market.
operations
and
such
transporting
as
the
ploughing,
irrigation,
a g r i c u l t ur a l
pr o d u c t s .
C o m p l e t e m e c h a n i s a t i o n o f I n d i a n a g r i c u l t ur e i s s t i l l a
d i s t a n t g o a l a n d a n i m a l s w i l l c o n t i n u e t o d o mi n a t e t h e
agricultural scene in India for several years to come.
4. Dependent upon Monsoon:
I n d i a n a g r i c u l t ur e i s m a i n l y d e p e n d e n t u p o n m o n s o o n
w h i c h i s u n c e r t a i n , u n r e l i a b l e a n d i r r e g u l a r. I n s p i t e o f t h e
l a r ge
scale
expansion
of
irrigation
facilities
since
I n d e p e n d e n c e , o n l y o n e- t h i r d o f t h e cr o p p e d ar e a i s
p r o v i d e d b y p e r e n n i a l i r r i g a t i o n a n d t h e r e ma i n i n g t w o t h i r d o f t h e c r o p p e d a r e a h a s t o b e ar t h e br u n t o f t h e
v a g a r i e s o f t h e mo n s o o n s .
5 . Var i e t y o f c rop s :
India is a vast country with varied types of relief,
c l i m a t e a n d s o i l c o n d i t i o n s . Th e r e f o r e , t h e r e i s a l a r ge
variety of crops grown in India. Both the tropical and
t e m p e r a t e c r o p s ar e s u c c e s s f u l l y g r o w n i n I n d i a . Ver y f e w
c o u n t r i e s i n t h e w or l d h a v e a v ar i e t y o f c r o p s c o m p a r a b l e
to that produced in India.
6 . P red o mi n a n c e o f f o o d c rop s :
24
of
the
total
cropped
area
is
devoted
to
the
c u l t i v a t i o n o f f o o d c r o p s . H o w e v e r, w i t h t h e c h a n g e i n
c r o p p i n g p a t t e r n , t h e r el a t i v e s h a r e o f f o o d c r o p s c a me
down from 76.7 per cent in 1950-51 to 58.8 per cent in
2002-03.
7 . I n s i g n i f i c a n t p l a c e t o g i v e n f o d d e r c rop s :
Al t h o u g h I n d i a h a s t h e l a rge s t p o p ul a t i o n o f l i v e s t o c k
i n t h e w o r l d , f o d d e r c r o p s a r e g i v e n a v er y i n s i g n i f i c a n t
p l a c e i n o ur c r o p p i n g p a t t e r n . O n l y f o u r p e r c e n t o f t h e
r e p o r t i n g a r e a i s d e v o t e d t o p er m a n e n t p a s t u r e s a n d o t h e r
g r a z i n g l a n d s . Th i s i s d u e t o pr e s s i n g d e m a n d o f l a n d f o r
f o o d c r o p s . Th e r e s u l t i s t h a t t h e d o m e s t i c a n i ma l s ar e n o t
p r o p e r l y f e d a n d t h e i r p r o d u c t i v i t y i s v e r y l o w c o mp a r e d
to international standards.
8. Seasonal pattern:
I n d i a h a s t hr e e m a j o r c r o p s e a s o n s .
(i) Kharif season starts with the onset of monsoons and
c o n t i n u e s t i l l t h e b e g i n n i n g o f w i n t e r. M a j o r c r o p s o f t h i s
s e a s o n a r e r i c e , m a i z e , j o w a r, b a j r a , c o t t o n , s e s a m e ,
groundnut and pulses such as moong, urad, etc.
( i i ) R a b i s e a s o n s t a r t s a t t h e b e g i n n i n g o f w i nt e r a n d
c o n t i n u e s t i l l t h e e n d o f w i nt e r o r b e g i n n i n g o f s u m m e r.
25
26
CHAPTER4
AGRICULTUREIN
INDIANECONOMY
AGRICULTUREININDIAN
ECONOMY
INDIASAGRICULTUTRAL
DEVELOPMENTPROBLEM
LACKOFACEESTOCREDIT
27
4.1
AGRICULTURE
IN
THE
NATIONAL
ECONOMY
Ag r i c u l t u r e f o r m s t h e b a c k b o n e o f I n d i a n e c o n o my
despite
concentrated
industrialization
in
the
last
industry
in
the
c o u n t r y,
a gr i c u l t u r e
provides
e m p l oy m e n t t o a r o u n d 5 o f t h e t o t a l w or k f o r c e i n t h e
c o u n t r y. Th e s i g n i f i c a n c e o f a g r i c u l t u r e i n t h e e c o n o my
can
be
best
explained
by
considering
the
role
of
a g r i c u l t u r e u n d er d i ffe r e n t h e a d s .
1 . S h a re of a g r i c u l t u re i n t o t a l G DP :
Two i mp o r t a n t f a c t s m u s t b e e m p h a s i z e d
here.
F i r s t l y, a g r i c u l t ur e c o n t r i b u t e s e v e n n o w a m a j o r
s h a r e o f n a t i o n a l i n c o me i n I n d i a . S e c o n d l y, t h e
s h a r e o f a g r i c u l t u r e i n n a t i o n a l i n c o m e h o w e v e r, h a s
been on a downward trend and this is being taken up
by
the
manufacturing
and
service
sectors
r e s p e c t i v e l y. I n a r a p i d d e v e l o p i n g c o u n t r y i t i s a s i t
should be.
Comparison can be made between the positions of
agriculture in India with that of other countries as
regards the share of agriculture in national income.
Its seen that more developed the country is, lesser is
t h e s h a r e o f a g r i c u l t ur e i n i t s n a t i o n a l i n c o me t h i s
can be seen from the contributions made in UK, USA,
C a n a d a a n d Au s t r a l i a , w h i c h a r e 2 , 3 , 4 a n d 5 p e r c e n t
r e s p e c t i v e l y. I n d i a h a v i n g n o t y e t r e a c h e d t h e s t a g e
28
that
v er y
high
proportion
of
working
p o p u l a t i o n i n I n d i a i s e n g a g e d i n a gr i c u l t u r e . D a t a
p r o v i d e d by c e n s u s o f I n d i a r e v e a l s t h a t 6 9 % o f t o t a l
m a i n w o r k e r s w e r e e n g a g e d i n a gr i c u l t u r e a n d a l l i e d
activities.
3 . A g r i c u l t u re f o r i n du s t r i a l d e v e l o p me n t
Indian agriculture has been the source of supply of
r a w m a t e r i a l t o o ur l e a d i n g i n d u s t r i e s . C o t t o n a n d
j u t e , t e x t i l e s , s u g a r, p l a n t a t i o n s - a l l t h e s e d i r e c t l y
depend
on
a gr i c u l t u r e
output.
Th e r e
are
many
i n d u s t r i e s , w h i c h d e p e n d o n a g r i c u l t u r e i n d u s t r y.
M a n y o f o ur s ma l l s c a l e a n d c o t t a g e i n d u s t r i e s l i k e
h a n d l o o m s , o i l cr u s h i n g , e t c . d e p e n d o n a g r i c u l t u r e
for their raw materials.
B u t t h e n , i n r e c e n t y e a r s , a g r i c u l t ur e i s l o s i n g i t s
significance to industries such as iron and steel,
engineering,
chemicals,
etc.
H o w e v e r,
in
recent
y e ar s , t h e i mp o r t a n c e o f f o o d pr o c e s s i n g i n d u s t r i e s i s
being increasing recognized both for generation of
i n c o m e a n d g e n e r a t i o n o f e m p l oy m e n t .
4 . A g r i c u l t u re i n i n t e r n at i o n a l t r a d e .
I mp o r t a n c e o f I n d i a n a g r i c u l t ur e s e c t o r a l s o r i s e s
f r o m t h e r o l e i t p l ay s i n I n d i a s t r a d e . Ag r i c u l t u r a l
p r o d u c t s - t e a , s u g a r, o i l s e e d s , t o b a c c o , s p i c e s , e t c .
constitutes
the
main
i t e ms
of
export
in
India.
A g r i c u l t ur a l g o o d s w h i c h a r e e x p o r t e d a mo u n t t o
50%
of
o ur
e x p or t s ,
29
and
manufactures
with
the
f a r me r s
lead
to
gr e a t e r
d e ma n d
for
in
containing
inflation,
e m p l oy m e n t
generation, etc.
I t i s c l e a r, t h a t a gr i c u l t u r e i s t h e b a c k b o n e o f t h e
I n d i a n e c o n o my a n d t h e pr o s p e r i t y o f a g r i c u l t ur e c a n
a l s o s t a n d f o r t h e pr o s p e r i t y o f t h e e c o n o m y. At t h e
s a m e t i m e i t s t r u e t h a t t h e pr e c i p i t a t e p r o d u c t i v i t y
i n a g r i c u l t ur e i s l e s s t h a n i n t h e i n d u s t r y. M a n y
s c h o l a r s t hi n g t h a t s o l o n g a s t h e I n d i a n e c o n o my i s
denominated
by
a gr i c u l t u r e
activates
per
capita
30
the agricultural
the
population.
Ap a r t
from
the healthcare of
f a r me r, t h e l a c k o f a c c e s s t o c r e d i t a l s o h i g hl y i m p o r t a n t
as almost 80% the farmers own less than a hectare of land.
T h e a v a i l a b i l i t y o f c r e d i t a l l o w s f a r m e r s t o b e pr o t e c t e d
from the inflated costs faced in agriculture and also,
31
government
intervention
had
resulted
in
of
land
and
also,
have
(which
unaddressed.
f o r ms
Th e r e
should
majority)
be
issues
r e ma i n s
e s t a b l i s h e d t h a t i s a c c e s s i b l e a n d a ffo r d a b l e t o e v e r y
person.
It
is
obvious
that
32
the
benefits
o f e c o n o mi c
to
credit
is
not
granted
to
all.
Economic
o p p o r t u n i t i e s o u g h t t o b e c r e a t e d f o r t h e m a rgi n a l i z e d
groups
to
help
in poverty
r e d u c t i o n a n d i n e q u a l i t y p r o b l e ms . F u r t h er a t t e m p t s m a d e
by the government to expand credit loans have ironically
r e s u l t e d i n m o r e c a s e s o f p o v e r t y t h a n e v e r. T h e l a c k o f
a c c e s s t o f o r m a l cr e d i t t h u s p l a c e s m a ny c o n s t r a i n t s o n
agricultural output and also, the standards of living for
the rural population thereby hindering their path to further
economic and social development .
33
CHAPTER5
FUCNTIONSOF
NABARD
about
or
p r o mo t i n g
institutional
development and
3. Evaluating,
monitoring
and
inspecting
the
client
banks
Besides this pivotal role, NABARD also:
A c t s a s a c o o r d i n a t o r i n t h e o p e r a t i o n s o f r ur a l c r e d i t
institutions
Extends assistance to the government, the Reserve
B a n k o f I n d i a a n d o t h e r o r ga n i z a t i o n s i n m a t t e r s
relating to rural development
O ffe r s t r a i n i n g a n d r e s e a r c h f a c i l i t i e s f o r b a n k s ,
c o o p e r a t i v e s a n d o r ga n i z a t i o n s w o r ki n g i n t h e f i e l d
o f r ur a l d e v e l o p m e n t
35
36
Functions
Functions ofof
NABARD
NABARD
Financial
Financial
Functions
Functions
Refinance
Refinance
Direct
Direct
Finance
Finance
Developmen
Developmen
tal
tal functions
functions
1.1.
Instituitonal
Instituitonal
2.2. Farm
Farm
sector
sector
37
3.3. Financial
Financial
inclusion
inclusion
Supervisory
Supervisory
functions
functions
4.4. Micro
Micro
credit
credit
5.5. Reserach
Reserach
and
and
Developmen
Developmen
tt
CHAPTER6
FINANCIAL
FUNCTIONSOF
NABARD
REFINANCE
DIRECTFINANCE
Financial functions
6.1Refinance
38
for
fertilizers,
using
high
insecticides
yielding
and
v ar i e t i e s
costly
of
seeds,
a g r i c u l t ur a l
i m p l e me n t s . I n s u c h a s i t u a t i o n , a r r a n g e me n t s f o r c r e d i t
s h o u l d g o m u c h b ey o n d t h e s i m p l e pr o v i s i o n o f c r e d i t a n d
m u s t b e l i n k e d o p e r a t i o n a l l y w i t h pr o d u c t i v i t y a n d o t h e r
services.
Production
and
pr o d u c t i v i t y, m a r k e t i n g
and
r a i s i n g t h e l e v e l o f s u r p l u s a n d s a v i n g s mu s t , t h e r e f o r e ,
b e t h e m a j o r f u n c t i o n s o f c r e d i t . Th e b e n e f i t o f m o d e r n
t e c h n o l o g y,
the
advantages
of
institutional
credit,
i n f r a s t r u c t ur a l a r r a n g e me n t s e t c . , s h o u l d a c c r u e t o a l l
classes of farmers. Besides, on the supply side, there
must be an arrangement for assessing the requirements of
funds on the basis of actual cost and raising the resources
t h e r e f o r e . I t w a s i n t h i s c o n t e x t , t h e c r o p l o a n sy s t e m o r
t h e p r o d u c t i o n o r i e n t e d sy s t e m o f l e n d i n g w a s e v o l v e d
a n d c o n c e i v e d a s t h e m o s t a p p r o pr i a t e m e c h a n i s m f o r
m a s s d i s b u r s e me n t o f pr o d u c t i o n c r e d i t .
P r o d u c t i o n C r e d i t D e p a r t me n t ( P C D ) d e a l s w i t h s h o r t
term refinance facilities, for various types of production,
m a r k e t i n g a n d p r o c ur e m e n t a c t i v i t i e s , b e i n g pr o v i d e d t o
client institutions, as detailed below:
1 . S h o r t Ter m ( S e a s o n a l Ag r i c u l t u r a l O p e r a t i o n s )
39
is
provided
for
production
p ur p o s e s
at
c o n c e s s i o n a l r at e o f i n t e r e s t t o S t a t e C o o p e r a t i v e B a n k s
( S C B s ) a n d R e g i o n a l R u r a l B a n k s ( R R B s ) b y w ay o f
s a n c t i o n o f cr e d i t l i mi t s . E a c h w i t h dr a w a l a g a i n s t t h e
s a n c t i o n e d c r e d i t l i mi t i s r e p ay a b l e w i t h i n 1 2 m o n t h s .
2 . S h o r t Ter m R e f i n a n c e t o R R B s , P S B s an d C C B s
( d i rec t l y ) f o r f i n a n c i n g PAC S f o r t h e i r S e a s o n a l
Agricultural Operations
A n e w r e f i n a n c e pr o d u c t f o r f i n a n c i n g o f PAC S t h r o u g h
P S B s & R R B s , w h e r e v e r C o o p e r a t i v e B a n k s ar e w e a k o r
n o t i n a p o s i t i o n t o l e n d t o PAC S a d e q u a t e l y, w a s
i n t r o d u c e d d u r i n g l a s t y ea r. ( 2 0 11- 1 2 )
3 . S h o r t Ter m ( O t h e r s )
T h e S T ( O t h er s ) l i mi t w o u l d c o n s i s t o f d i ffe r e n t p u r p o s e s
v i z . S T- Agr i c u l t u r e a n d Al l i e d Ac t i v i t i e s , S T - M a r k e t i n g
o f c r o p s , S T- F i s h e r i e s S e c t o r s , I n d u s t r i a l C o o p e r a t i v e
S o c i e t i e s ( o t h e r t h a n w e a v e r s ) , S T- L a b o r C o n t r a c t a n d
Forest Labor Cooperative Societies including collection
o f M i n o r F or e s t p r o d u c e . S T- R u r a l a r t i s a n i n c l u d i n g
w e a v e r s m e mb e r s o f PAC S / L A M P S / F S S , S T- P ur c h a s e s ,
S t o c k i n g a n d D i s t r i b u t i o n o f C h e mi c a l F e r t i l i z e r s a n d
o t h e r Agr i c u l t u r a l I n p u t s o n t h e b a s i s o f b a n k w i s e RL P
f o r r e s p e c t i v e p u r p o s e s . Th e l i mi t i s s a n c t i o n e d t o S C B s
and RRBs.
4. MT Conversion.
40
cr e a t i o n .
resulting
in
It
induces
increased
technological
production,
up
gradation
productivity
and
i n c r e me n t a l i n c o m e t o f a r me r s a n d e n t r e pr e n e u r s . Th i s i s a
l o n g - t er m
refinance
f a c i l i t y.
Th e
credit
is
n o r ma l l y
and
Micro
Enterprises),
handicrafts,
41
S t a t e C o - o p e r a t i v e Ag r i c u l t u r e & R u r a l D e v e l o p me n t
Banks (SCARDBs)
2.
3.
4.
5.
S t a t e Ag r i c u l t ur a l D e v e l o p me n t Fi n a n c e C o m p a n i e s
(ADFCs)
6.
Scheduled
P r i ma r y
Ur b a n
Co-operative
Banks
(PUCBs)
7.
North
East
D e v e l o p me n t
Finance
C o r p or a t i o n
( NE D F C )
8.
N o n - B a n k i n g F i n a n c i a l C o mp a n i e s ( N B F C s )
o Purposes :
1.
F a r m S e c t or :
A g r i c u l t ur e a n d a l l i e d a c t i v i t i e s s u c h a s m i n o r
irrigation,
development,
sheep/goat
farm
mechanisation,
soil
conservation,
rearing,
p o ul t r y,
land
d a i r y,
p i g g e r y,
p l a n t a t i o n / h o r t i c u l t ur e , f o r e s t r y, f i s h e r y, s t o r a g e
a n d m a r k e t y ar d s , b i o - g a s a n d o t h e r a l t er n a t e
42
of
animals
and
e n e r gy,
s e r i c u l t ur e ,
animal
dr i v e n
apiculture,
carts,
a gr o -
p r o c e s s i n g , a g r o- s e r v i c e c e n t r e s , e t c .
2.
Non-Farm Sector :
Artisans,
S ma l l
&
Micro
Enterprises,
h a n d i c r a f t s , h a n d l o o m s , p o w e r l o o ms , e t c
o
L o a n p e r i od :
Th e l o a n p er i o d i s a m a x i m u m o f 1 5 y e ar s
43
B.
RURAL INFRASTRUCTURE
DEVELOPMENT
FUND
Rural
Infrastructure Development
F u n d ( R I D F)
was
to
medium
and
minor
irrigation,
soil
has
taken
an
initiative
for
supporting
p r o d u c e r o rga n i z a t i o n s , a d o p t i n g a f l e x i b l e a p pr o a c h t o
m e e t t h e n e e d s o f p r o d u c e r s . I n or d e r t o g i v e a s p e c i a l
focus,
the
Producers
O r ga n i z a t i o n
Development
F u n d ( P O D F ) h a s b e e n s e t u p w e f 0 1 Ap r i l 2 0 11, w i t h
an
initial
corpus
of
50
crore
Any
registered
P r o d u c e r s O r ga n i z a t i o n vi z , Pr o d u c e r s C o m p a n y ( a s
d e f i n e d u n d er S e c 5 8 1 A i n p ar t I X A o f C o m p a n y s Ac t
1956),
Producers
Federations,
Cooperatives,
MACS
(Mutually
44
registered
aided
F ar m e r
cooperative
society),
industrial
c o o p er a t i v e
societies,
other
r e g i s t e r e d f e d e r a t i o n s , PAC S , e t c . s e t u p by pr o d u c e r s
a r e e l i g i b l e u n d e r t h e f u n d . S u p p or t u n d e r P O D F i s
p r o v i d e d a s u n d er :
C r e d i t S u p p or t i s pr o v i d e d f o r f i n a n c i a l i n t er v e n t i o n .
S u p p o r t i n t h e f o r m o f g r a n t , l o a n s , o r a c o mb i n a t i o n o f
these is also available for capacity building & market
interventions.
D . F I N A N C I N G AN D D EV E L O P I N G PAC S I N TO
M U LTI - S E RVI C E C E N T R E S
PAC S b e i n g t h e r e g i s t e r e d c o o p e r a t i v e s o c i e t y h a s
been
pr o v i d i n g
m e mb e r s .
It
credit
has
been
and
other
observed
services
that
to
PAC S
its
are
g e n e r a l l y m e e t i n g o u t t h e c r e d i t r e q u i r e me n t s o f i t s
m e mb e r s . H o w e v e r t h er e i s a n e e d t o pr o v i d e o t h e r
s e r v i c e s t o t h e f a r me r s a n d h e n c e PAC S s h o u l d b e
d e v e l o p e d a s a u n i t t o m e e t a l l t h e i r n e e d s . To e n s u r e
b e t t e r r e t ur n s o n t h e a g r i c u l t ur a l p r o d u c e , t h e f a r me r s
should not only be encouraged to use the latest
t e c h n o l o g y t o i n c r e a s e a gr i c u l t u r a l p r o d u c t i o n b ut
a l s o t o s t o r e t h e i r pr o d u c e i n a s c i e n t i f i c w ay t o
m i n i mi s e s t o r a g e l o s s e s a n d pr o v i d e p l e d g e l o a n t o
bridge credit gap.
I n or d e r t o e n a b l e PAC S t o pr o v i d e m o r e s e r v i c e s t o
45
t h e i r m e mb e r s a n d g e n e r a t e i n c o m e f o r t h e ms e l v e s , a n
i n i t i a t i v e h a s b e e n t a k e n t o d e v e l o p PAC S a s mu l t i
s e r v i c e c e n t r e s . Th i s w i l l e n a b l e PAC S t o p r o v i d e
a n c i l l a r y s e r v i c e s t o i t s m e mb e r s a n d d i v e r s i f y i t s
a c t i v i t i e s . As s i s t a n c e u n d e r P O D F i s a v a i l a b l e t o
S C B / C C B / PAC S f o r t hi s p u r p o s e .
PAC S , b e i n g t h e r e gi s t e r e d c o o p e r a t i v e s o c i e t y, h a s
been
pr o v i d i n g
credit
and
other
services
to
its
m e mb e r s . PAC S a r e g e n e r a l l y pr o v i d i n g t h e f o l l o w i n g
facilities to the members:
i.
Input
facilities
in
form
of
cash
or
kind
c o m p o n e n t t o m e mb e r s .
ii.
iii.
A g r i c u l t ur e i m p l e m e n t s o n h i r i n g b a s i s .
S t o r a g e f a c i l i t y.
S o m e o f t h e PAC S a r e a l s o a s s i s t i n g f a r me r s i n
marketing of their produce. It has been observed that
PAC S
ar e
g e n er a l l y
meeting
out
the
cr e d i t
r e q u i r e me n t s o f i t s m e mb e r s . H o w e v e r t h e r e i s a n e e d
t o pr o v i d e o t h e r s e r v i c e s t o t h e f a r me r s . Th e PAC S
should be developed as a unit for meeting all the
n e e d s o f t h e f a r m e r s . To e n s u r e b e t t e r r e t ur n s o n t h e
a g r i c u l t u r e pr o d u c e , t h e f a r m e r s s h o u l d n o t o n l y b e
e n c o u r a g e d t o u s e t h e l a t e s t t e c h n o l o gy t o i n c r e a s e
a g r i c u l t u r e pr o d u c t i o n b u t a l s o t o s t o r e t h e i r p r o d u c e
46
i n a s c i e n t i f i c w ay t o m i n i m i s e t h e s t o r a g e l o s s e s a n d
provide pledge loan to bridge credit gap.
Wit h t h e d e c r e a s e i n p e r c a p i t a l a n d h o l di n g s i z e o v e r
a p e r i o d o f t i me , i t i s n o t e c o n o mi c a l f o r t h e f a r me r s
t o p ur c h a s e t h e f a r m e q u i p m e n t s . M o r e o v e r m a n y n e w
i n v e n t i o n s h a v e c o m e i n t h e r e c e n t y e ar s i n t h e
agriculture sector which needs to be brought to the
f a r ms . Th e u s e o f t h e n e w t e c h n o l o g y & H Y V w i l l
increase the productivity of the produce.
I t h a s a l s o b e e n o b s e r v e d t h a t m o s t o f t h e f a r me r s g o
i n f o r d i s t r e s s s a l e o f t h e p r o d u c e a s t h ey a r e i n t h e
n e e d o f i m me d i a t e c r e d i t . F u r t h e r a d e q u a t e s t o r a g e
capacity is not available in the rural area where even
the small farmers can store their produce and avail
pledge loan.
47
CHAPTER7
DEVELOPMENTAL
FUNCTIONSOFNABARD
INSTITUIONALDEVELOPMENT
48
FARMSECTOR
FINANCIALINCLUSION
RESEARCHAND
DEVELOPMENT
DEVELOPMENTAL FUNCTIONS
A.
INSTITUTIONAL DEVELOPMENT
I n s t i t u t i o n a l D e p a r t me n t h a s b e e n i n i t i a t i n g v ar i o u s
p r o gr a m m e s
and
initiatives
for
strengthening
of
c o o p e r a t i v e s s i n c e 1 9 8 2 . Th e f o l l o w i n g m a j o r i n i t i a t i v e s
and
supports
are
being
p r o vi d e d
to
Rural
Credit
C o o p e r a t i v e s t o a t t a i n o ur g o a l f o r e v o l v i n g a s u s t a i n a b l e
Rural Financial System to enhance ground level credit
f l o w t o f a r m e r s a n d o t h er s i n r u r a l a r e a s .
B. FARM SECTOR
I.
Development
Policy
Department
Farm
S e c t or.
Th e
D e p a r t m e n t ' s c o r e f u n c t i o n i s i mp l e m e n t a t i o n o f v ar i o u s
farm
sector
initiatives
a i me d
at
conservation
and
credit
flow
by
Rural
49
Fi n a n c i a l
Institutions,
a g r i c u l t ur a l
pr o d u c t i o n
and
p r o d u c t i v i t y,
g e n e r a t i n g r ur a l e m p l o y m e n t a n d r a i s i n g t h e s t a n d a r d o f
living
of
rural
i m p l e me n t a t i o n
poor
of
through
these
credit
pr o g r a m m e s
and
grant.
evolved
Th e
o v er
p e r i o d o f t i m e t h r o u g h v a r i o u s p o l i cy i n i t i a t i v e s i s t h e
responsibility
operational
of
the
issues
D e p a r t me n t .
e me rgi n g
Dealing
while
with
the
i mp l e m e n t i n g ,
m o n i t o r i n g t h e pr o g r a m m e s a n d pr o v i d i n g f e e d b a c k f o r
p o l i c y f r a mi n g / i mp r o v e m e n t i s a p ar t o f t h e t a s k a s s i g n e d
t o t h e D e p a r t m e n t . Th e i m p o r t a n t t a s k s p o r t f o l i o s h a n d l e d
by FSDD are grouped under four verticals, the details are
furnished below
d i s s e mi n a t i o n
increasing
pr o d u c t i v i t y
and
transfer
of
crops
and
of
t e c h n o l o gy
other
for
farming
of
pr a c t i c e s
by
f a r me r s
by
setting
up
d e m o n s t r a t i o n u n i t s o n r e c e n t t e c h n o l o g i e s . To c a t e r t o
interventions under technology transfer and dissemination
N A B A R D h a s c r e a t e d F a r m Tec h n o l o gy Tra n s f e r F u n d
50
d i s b u r s e me n t
to `187.89
c r or e . Var i o u s
a c t i v i t i e s b e i n g s u p p o r t e d u n d e r F T T F ar e a s f o l l o w s :
1. Holistic
D e v e l o p me n t
of
Vil l a g e s
through
Vil l a g e
Counselling
and
Market
Ad v o c a cy
through
F a r me r s C l u b s ( M a s t e r F a r me r s )
5 . S u p p o r t t o F ar m e r s ' Tra i n i n g a n d R u r a l D e v e l o p m e n t
Centres (FTRDCs)
6. Support
for
Capacity
Building
for
Ad o p t i o n
of
Tec h n o l o gy ( C AT)
7 . F a r me r s ' C l u b P r o g r a m m e
Producers
Organisation
(PODF)
51
Development
Fund
the
Producers
O rga n i z a t i o n
Development
F u n d ( P O D F ) h a s b e e n s e t u p w e f 0 1 Ap r i l 2 0 11, w i t h a n
i n i t i a l c or p u s o f 5 0 c r or e . Any r e g i s t e r e d Pr o d u c e r s
O r ga n i z a t i o n v i z , P r o d u c e r s C o mp a ny ( a s d e f i n e d u n d e r
S e c 5 8 1 A i n p a r t I X A o f C o mp a ny s Ac t 1 9 5 6) , Pr o d u c e r s
Cooperatives,
(Mutually
registered
aided
F a r me r
cooperative
Federations,
society),
MACS
industrial
c o o p e r a t i v e s o c i e t i e s , o t h er r e gi s t e r e d f e d e r a t i o n s , PAC S ,
e t c . s e t u p by p r o d u c e r s ar e e l i g i b l e u n d er t h e f u n d .
S u p p o r t u n d er P O D F i s pr o v i d e d a s u n d e r :
C r e d i t S u p p or t i s pr o v i d e d f o r f i n a n c i a l i n t er v e n t i o n .
S u p p o r t i n t h e f o r m o f g r a n t , l o a n s , o r a c o mb i n a t i o n o f
these is also available for capacity building & market
interventions.
S i n c e m o s t o f t h e P r o d u c e r s O rga n i s a t i o n s ar e h a v i n g
low capital base, scope for NABARD's intervention under
PODF
has
been
enhanced
to
support
Pr o d u c e r s
O r ga n i s a t i o n s f o r c o n t r i b u t i o n t o s h a r e c a p i t a l .
1. Introduction
A . I n d i a n p r o d u c e r s a r e u n a b l e t o r e a l i z e o p t i ma l v a l u e
from their
p r o d u c e a n d p r o gr e s s f u r t h er
52
due
to
of
o r ga n i z a t i o n .
India
households
of
land
holdings
has
which
over
o v er
and
12.5
85%
lack
cr o r e
are
of
f a r me r
small
and
m a rgi n a l f a r m e r s w i t h l a n d h o l d i n g s o f l e s s t h a n 2
h e c t a r e s . Th e a v e r a g e s i z e o f l a n d h o l d i n g i s 1 . 3 3
h e c t a r e / f a r me r h o u s e h o l d . D u e t o t h i s f r a g me n t a t i o n
a n d d i s o r ga n i z a t i o n , i t i s n o t e c o n o mi c a l l y v i a b l e f o r
t h e f a r m e r s n o t o n l y t o a d o p t l a t e s t t e c h n o l o gy b u t
a l s o t o u s e h i g h y i el d i n g v a r i e t i e s o f i n p u t s l i k e
s e e d s a n d f e r t i l i z e r s . Th e y ar e a l s o u n a b l e t o r e a l i z e
good
value
from
their
marketable
surplus
by
the
other
hand
in
case
of
non-farm
sector
a c t i v i t i e s , t h e h a n d l o o m w e a v e r s & ar t i s a n s a r e n o t
a b l e t o c o m p e t e w i t h t h e i r pr o d u c t s i n t h e m a r k e t d u e
to poor quality & obsolete designs.
C. Through
better
o r ga n i z a t i o n , p r o d u c e r s
can
utilize
s c a l e t o p r o c ur e i n p ut s a t a l o w e r p r i c e , a n d g a i n
more
selling
power
for
their
p r o d u c e / pr o d u c t .
F o r mi n g a pr o d u c e r o rga n i z a t i o n c a n a l s o p r o v i d e
a c c e s s t o t i me l y a n d a d e q u a t e f i n a n c e , b u i l d c a p a c i t y
and provide linkages to markets.
D. NABARD has, therefore, decided to set up a separate
fund
titled
"Producers
O r ga n i z a t i o n
Development
tie-ups.
Th e
Fund
has
been
created
in
N A B A R D w i t h a n i n i t i a l c o r p u s o f 5 0 cr o r e s f r o m o u t
o f i t s o p e r a t i n g s u r p l u s f o r t h e y e a r 2 0 1 0- 11.
o P r o d u c e r s O rga n i z a t i o n r e g i s t e r e d u n d e r a n y S t a t u t e
o f L a w ar e e l i g i bl e .
o The
activities
may
fall
within
the
domain
of
a g r i c u l t u r e , a l l i e d s e c t o r s & N o n F ar m S e c t o r o n l y.
o P r o d u c e r s O r ga n i z a t i o n s h o u l d b e f o r m e d b y t h e
p r i ma r y pr o d u c e r s o f a g r i c u l t ur e & NF S a c t i v i t i e s .
54
and/or
ot h e r
related
activities
like
h a r v e s t i n g , s t o r a g e , pr o c e s s i n g , p a c k a g i n g a n d / or
m a r k e t i n g o f t h e p r o d u c e / pr o d u c t or i n c o m b i n a t i o n
of the above activities.
o T h e f u n d w i l l b e u s e d f o r pr o v i d i n g l o a n t o c a r r y o u t
the economic activity and mix of grant and loan for
capacity building market linkages.
o The
Fund
could
also
be
used
for
developing
p r o d u c e r s o r ga n i z a t i o n t hr o u g h n e c e s s a r y c a p a c i t y
building
o T h e a c t i v i t y s h o u l d r e s u l t i n p r o d u c t i m p r o v e me n t
a n d / o r i n c r e a s e i n pr o d u c t i o n .
o The proposals should lead to creation of sustainable
e m p l oy m e n t o p p o r t u n i t i e s ( d i r e c t / i n d i r e c t ) . P o l i c y
goal
is
to
i mp r o v e
r ur a l
livelihoods
t hr o u g h
c o m mu n i t y b a s e d a n d s u s t a i n a b l e i n t e r v e n t i o n s
o T h e P r o d u c e r s O rga n i z a t i o n w i l l a c t f o r t h e b e n e f i t
of the producers.
o T h e s h a r e s o f t h e pr o d u c e r s c a n n o t b e s o l d t o n o n
p r o d u c e r s a t a n y t i me . I f e x i s t i n g m e mb e r d e s i r e t o
leave
the
purchased
o rga n i s a t i o n ,
either
by
his
shares
existing
e n r o l l i n g a n e w p r i ma r y p r o d u c e r.
55
can
producers
only
be
or
by
participation
(ownership/
management/empowerment)
o Integrated
approach
(need-based
and
flexible,
c o n v e r ge n c e w i t h o t h e r s c h e m e s / p r o gr a m me s )
F i n an c i n g a n d D e v e l o p i n g PACS i nt o mu l t i - s e r v i c e
c e n t re
PAC S b e i n g t h e r e gi s t e r e d c o o p e r a t i v e s o c i e t y h a s b e e n
p r o v i d i n g cr e d i t a n d o t h er s e r v i c e s t o i t s m e m b e r s . I t h a s
b e e n o b s e r v e d t h a t PAC S a r e g e n e r a l l y m e e t i n g o u t t h e
credit requirements of its members. However there is a
n e e d t o pr o v i d e o t h e r s e r v i c e s t o t h e f a r m e r s a n d h e n c e
PAC S s h o u l d b e d e v e l o p e d a s a u n i t t o m e e t a l l t h e i r
needs.
To
ensure
better
returns
on
the
agricultural
p r o d u c e , t h e f a r me r s s h o u l d n o t o n l y b e e n c o u r a g e d t o u s e
t h e l a t e s t t e c h n o l o gy t o i n c r e a s e a g r i c u l t u r a l p r o d u c t i o n
but also to store their produce in a scientific way to
m i n i mi s e s t o r a g e l o s s e s a n d pr o v i d e p l e d g e l o a n t o br i d g e
credit gap.
I n o r d e r t o e n a b l e PAC S t o pr o v i d e m o r e s e r v i c e s t o t h e i r
m e mb e r s a n d g e n e r a t e i n c o me f o r t h e m s e l v e s , a n i n i t i a t i v e
h a s b e e n t a k e n t o d e v e l o p PAC S a s m u l t i s e r v i c e c e n t r e s .
T h i s w i l l e n a b l e PAC S t o p r o v i d e a n c i l l a r y s e r v i c e s t o i t s
56
I n p u t f a c i l i t i e s i n f o r m o f c a s h or k i n d c o m p o n e n t
t o m e mb e r s .
ii.
iii.
A g r i c u l t ur e i m p l e m e n t s o n h i r i n g b a s i s .
S t o r a g e f a c i l i t y.
S o m e o f t h e PAC S a r e a l s o a s s i s t i n g f a r m e r s i n m a r k e t i n g
o f t h e i r pr o d u c e . I t h a s b e e n o b s e r v e d t h a t PAC S ar e
generally meeting out
the credit
r e q u i r e me n t s o f i t s
m e mb e r s . H o w e v e r t h er e i s a n e e d t o p r o v i d e o t h e r
s e r v i c e s t o t h e f a r m e r s . Th e PAC S s h o u l d b e d e v e l o p e d a s
a u n i t f o r m e e t i n g a l l t h e n e e d s o f t h e f a r m e r s . To e n s u r e
b e t t e r r e t u r n s o n t h e a g r i c u l t ur e pr o d u c e , t h e f a r m e r s
should not only be encouraged to use the latest technology
t o i n c r e a s e a g r i c u l t ur e p r o d u c t i o n b u t a l s o t o s t o r e t h e i r
p r o d u c e i n a s c i e n t i f i c w ay t o m i n i m i s e t h e s t o r a g e l o s s e s
and provide pledge loan to bridge credit gap.
Wit h t h e d e c r e a s e i n p e r c a p i t a l a n d h o l di n g s i z e o v e r a
p e r i o d o f t i m e , i t i s n o t e c o n o mi c a l f o r t h e f a r m e r s t o
purchase
the
farm
e q u i p me n t s .
Moreover
many
new
i n v e n t i o n s h a v e c o m e i n t h e r e c e n t y e ar s i n t h e a g r i c u l t u r e
57
PAC S c a n p l ay a n i m p o r t a n t r o l e i n pr o v i d i n g t h e s e
facilities
to
the
farmers.
To i n c r e a s e
the
business
p o r t f o l i o o f PAC S s o a s t o m a k e i t a s e l f s u s t a i n a b l e
e n t i t y, i t i s e s s e n t i a l t h a t t h e PAC S s h o u l d p r o v i d e
additional
services
like
providing
a gr i c u l t u r e
i m p l e me n t s o n h i r i n g b a s i s , e n a b l i n g c o l l e c t i v e p ur c h a s e
of inputs, having good quality storage capacity as per
N e g o t i a b l e War e h o u s e R e c e i p t S y s t e m, e t c .
A c c o r d i n g l y, t h e f o l l o w i n g f a c i l i t i e s c a n b e t a k e n u p by
PAC S t o t h e f a r me r s :
1 . A g ro- S t o r a g e c e n t re:
Upgradation of the existing storage facility or
construction of new godown along with sorting/
g r a d i n g u n i t a s p e r N e g o t i a b l e War e h o u s e R e c e i p t
S y s t e m. Th i s w i l l e n a b l e t h e m t o i s s u e w a r e h o u s e
r e c e i p t s . B a s e d o n t h e s e r e c e i p t s , t h e f a r me r s c a n
58
multi
crop
p l a n t e r,
paddy
t r a n s p l a n t e r,
s p r a y er s , c o mb i n e h a r v e s t e r e t c . d e p e n d i n g u p o n
t h e r e q u i r e me n t s o f m e m b e r s . Th e e a r n i n g w i l l b e
f r o m t h e r e n t a l o f t h e s e e q u i p me n t s .
3 . A g r i - p roc e s s i n g c e nt re:
P r i ma r y
Processing:
S or t i n g ,
grading
unit,
w a x i n g / p o l i s h i n g u n i t , p r e - c o o l i n g c h a mb e r s ,
etc.
S e c o n d a r y P r o c e s s i n g : Val u e a d d i t i o n t o p r o d u c e
e.g.
Mini
rice
mi l l ,
attachaki,
h or t i c u l t u r e
59
for
Ag r i c u l t ur e
and
Rural
Development
( N A B A R D ) w i t h br o a d o b j e c t i v e s o f u n i f i c a t i o n o f
m u l t i p l i c i t y o f w a t er s h e d d e v e l o p m e n t p r o g r a m m e s
into
single
national
initiative
through
i n v o l v e m e n t o f v i l l a g e l e v e l i n s t i t u t i o n s a n d PFAs .
I n p ur s u a n c e t h e r e o f , WD F h a s b e e n c r e a t e d i n
NABARD with a contribution of
b y M i n i s t r y o f Ag r i c u l t ur e , G o v e r n me n t o f I n d i a
(GoI) and NABARD.
60
2. Objectives
The objective of the Fund is to spread the message
o f p a r t i c i p a t o r y w a t e r s h e d d e v e l o p m e n t . Th e F u n d
w i l l b e u t i l i s e d t o cr e a t e t h e n e c e s s a r y f r a m e w o r k
conditions to replicate and consolidate the isolated
s u c c e s s f u l i n i t i a t i v e s u n d e r d i ffe r e n t pr o g r a m m e s
in
the
g o v e r n me n t ,
s e mi - g o v er n m e n t
and
NGO
s e c t o r s . Th e r e b y, a l l t h e p a r t n e r s i n v o l v e d v i z . ,
w a t e r s h e d c o m mu n i t y, c e n t r a l a n d s t a t e g o v e r n me n t
departments,
banks,
agricultural
research
WD F
operationalised
in
is
close
proposed
coordination
to
be
with
the
C e n t r a l a n d St a t e M i n i s t r i e s a s a c o n t i n u u m o f
t h e i r e ffo r t s b u t w i t h a d i s t i n c t i d e n t i t y.
3 . I mp a c t o f w a t e r s h e d d e v e l o p me n t p rog r a m
Wat e r s h e d D e v e l o p me n t P r o j e c t s i mp l e m e n t e d by
NABARD
has
resulted
in
creation
replicable
in
livelihood
Major
i mp a c t
of
of
watershed
the
watershed
i m p l e me n t a t i o n i n v a r i o u s p r o gr a m m e s a s o b s e r v e d
based
on
i mp a c t
evaluation
61
studies
are
given
below:
Rise in ground water level
Drinking
water
scarcity
in
villages
has
been
overcome
Local
e mp l o y me n t
generation
has
i mp r o v e d ,
r e d u c i n g o ff s e a s o n m i g r a t i o n
Increase
in
a gr i c u l t u r a l
pr o d u c t i v i t y
and
p r o d u c t i o n - m a i z e ( 2 8 % ) , j o w a r / b a j r a ( 5 0% ) ,
g r o u n d n u t ( 1 8 % ) , p ul s e s ( 3 6 t o 4 2 % )
Dairy activity has received a fillip
Demand
potential
for
credit
has
gone
up
(estimated
6 4 2 0 c r o r e)
Wome n e m p o w e r me n t a n d r e d u c t i o n i n dr u d g e r y ;
l a r ge n u mb e r o f w o me n S H G s f o r me d a n d c r e d i t
linked (about 12840 SHGs)
S e c o n d a r y i mp a c t i mp r o v e d h o u s i n g , h e a l t h a n d
education (schools)
62
erstwhile
D e v e l o p me n t
P o l i cy
D e p a r t me n t
with
p r i ma r y f o c u s o n f o r mu l a t i o n o f a p p r o pr i a t e p o l i c i e s
concerning agriculture and allied sector activities, natural
resources management, climate change, etc., within the
o v e r a l l p ol i c y f r a m e w o r k o f G o v e r n m e n t o f I n di a . Th e
i m p o r t a n t o b j e c t i v e s o f t h e p o l i c i e s a r e t o w ar d s d r a w i n g
a p p r o p r i a t e o p e r a t i o n a l g u i d e l i n e s f o r i m p l e me n t a t i o n o f
such
policies
through
credit,
pr o m o t i o n a l
and
d e v e l o p m e n t a l i nt e r v e n t i o n s . Tow a r d s t h e s e o b j e c t i v e s ,
t h e D e p a r t me n t i s a l s o r e n d e r i n g n e c e s s a r y t e c h n i c a l
a d v i s o r y s e r v i c e s i n a g r i c u l t ur e a n d a l l i e d s e c t o r s t h r o u g h
C e n t r a l a n d R e g i o n a l Tec h n i c a l Ad v i s o r y G r o u p s ( C - TAG
a n d R - TAG s ) .
C. Financial inclusion
I n d i a n e c o n o my i n g e n e r a l a n d b a n k i n g s e r v i c e s i n
p a r t i c u l a r h a v e m a d e r a pi d s t r i d e s i n t h e r e c e n t p a s t .
H o w e v e r, a s i z e a b l e s e c t i o n o f t h e p o p u l a t i o n , p ar t i c u l a r l y
the vulnerable groups, such as weaker sections and low
income groups, continue to remain excluded from even the
m o s t b a s i c o p p o r t u n i t i e s a n d s e r v i c e s p r o vi d e d b y t h e
63
the
G o v e r n me n t
Committee
on
Chairmanship
of
submitted
its
Financial
Dr.
C.
of
India
Inclusion
Rangarajan.
f i n a l r e p or t t o
constituted
Hon'ble
Th e
under
a
the
Committee
Union
Finance
studies.
formulating
Th e
policies
on
R&D
Fund
matters
of
is
ut i l i s e d
i mp o r t a n c e
for
to
a g r i c u l t u r a l o p er a t i o n s a n d r ur a l d e v e l o p m e n t , i n c l u d i n g
f a c i l i t i e s f o r t r a i n i n g , d i s s e mi n a t i o n o f i n f o r ma t i o n a n d
p r o mo t i o n o f r e s e a r c h b y u n d er t a k i n g t e c h n o - e c o n o mi c
s t u d i e s a n d o t h e r s u r v e y s i n t h e f i e l d s o f a g r i c u l t u r e , r ur a l
b a n k i n g a n d r u r a l d e v e l o p me n t . C o r p u s o f t h e R & D F u n d
is
5 0 c r or e .
National
and
Regional
Seminars/
C o n f e r e n c e s / S y mp o s i a , Wor k s h o p s , e t c .
o Occasional Papers and cost of other publications.
o Chair Units.
o Providing
training
for
personnel
of
constituent
banks.
o S u m m e r I n t e r n s h i p P r o gr a m m e .
Tra i n i n g I n s t i t u t e s S up p o r t e d U n d e r R& D F un d
CAB, Pune,
65
Institute
of
Rural
Banking
( NI R B ) ,
Bangalore
CHAPTER8
SUPERVISORY
FUNCTIONS
FUNCTIONS
OBJECTIVESOFSUPERVISION
PROCESS
66
SUPERVISROY FUNCTIONS
S e c t i o n 3 5( 6 ) o f t h e B a n k i n g R e g u l a t i o n Ac t , 1 9 4 9 ,
empowers
NABARD
to
conduct
inspection
of
State
level
cooperative
institutions
such
as
State
C o o p e r a t i v e Ag r i c u l t ur e a n d R u r a l D e v e l o p m e n t B a n k s
(SCARDBs),
Ap e x
Wea v e r s
Societies,
Marketing
8.1
O b j e c t i v e s o f Su p e r v i s i o n
To pr o t e c t t h e i n t e r e s t o f t h e pr e s e n t a n d f u t u r e
depositors.
To e n s u r e t h a t t h e b u s i n e s s c o n d u c t e d by t h e s e b a n k s
i s i n c o n f o r mi t y w i t h t h e p r o v i s i o n s o f t h e r e l e v a n t
A c t s / R u l e s , r e g u l a t i o n s / By e - L a w s .
67
observance
formulated
and
of
issued
rules,
by
guidelines,
NABARD
etc.,
RBI/
Government.
To e x a m i n e t h e f i n a n c i a l s o u n d n e s s o f t h e b a n k s a n d
To s u g g e s t w a y s a n d m e a n s f o r s t r e n g t h e n i n g t h e
i n s t i t u t i o n s s o a s t o e n a b l e t h e m t o p l ay m o r e
e ffi c i e n t r o l e i n p u r v ey i n g r u r a l c r e d i t .
8.2
S u p e r v i s o r y p roc e s s
(i)
O n - S i t e I n s p e c t i on
Onsite inspection of banks is carried out on a
periodic
basis.
Besides
r e gi o n a l / c o n t r o l l i n g
the
o ffi c e s
Head
and
some
O ffi c e ,
certain
branches
are
c o v e r e d d u r i n g i n s p e c t i o n s o a s t o e n s u r e a mi n i mu m
coverage of advances.
Th e O n- S i t e I n s p e c t i o n f o c u s e s o n s o l v e n c y, l i q u i d i t y
a n d o p e r a t i o n a l h e a l t h o f t h e b a n k . Wh i l e t h e c o mp l i a n c e
to the inspection findings is followed up in the usual
course, NABARD addresses supervisory letters to the
m a n a g e me n t o f t h e b a n k s , St a t e G o v e r n me n t , s p o n s o r
bank, etc., highlighting the major areas of supervisory
concern
that
need
immediate
rectification,
holds
68
S u p p l e me n t a ry Ap p r a i s a l
Supplementary
Ap p r a i s a l / P o r t f o l i o
Studies
ar e
also
u n d e r t a k e n b y N A B A R D , w h er e v e r w a r r a n t e d .
(iii)
O f f - S i t e S u r v e i l l a n c e an d M o n i t o r i n g
As a p a r t o f t h e n e w s t r a t e gy o f s u p e r v i s i o n , a sy s t e m
of
` O ff- s i t e
Surveillance'
has
been
introduced
as
statutory
and
non-statutory
r e t ur n s .
Wh i l e
the
p e r i o d i c a l s t a t u t o r y o n - s i t e i n s p e c t i o n s a t t e m p t a n o v er a l l
e v a l u a t i o n o f t h e p e r f o r ma n c e o f t h e b a n k s w i t hi n a
stipulated
period,
o ff- s i t e
surveillance
envisages
69
CHAPTER 9
70
ACHIVEMENTS OF
NABARD
ACHIEVEMENTS OF NABARD:
NABARD has been performing in the positive side
s i n c e i t s i n c e p t i o n i n t h e e n d o f t h e f i n a n c i a l y e ar o n
M a r c h 2 0 11 t h e t o t a l pr o d u c t i o n cr e d i t d i s b u r s e d w a s R s .
3 4 1 9 6 c r o r e . F or t h e y e ar o f 2 0 1 0 - 2 0 11 t h e r e f i n a n c e
d i s b u r s e m e n t u n d e r t h e I n v e s t me n t C r e d i t t o c o m m e r c i a l
banks,
state
cooperative
banks,
state
cooperative
a g r i c u l t u r e a n d r u r a l d e v e l o p me n t b a n k s , R R B s a n d o t h e r
e l i g i b l e f i n a n c i a l i n s t i t u t i o n w a s R s . 1 3 4 8 5 . 8 7 c r or e
Th e R u r a l I n f r a s t r u c t ur e D e v e l o p m e n t F u n d ( RI D F ) R s .
12060.04
cumulative
c r or e s
was
a mo u n t
of
di s b u r s e d
d ur i n g
Rs.121488.40
2 0 1 0- 11.
c r or e
has
been
s a n c t i o n e d f o r 4 4 4 1 6 2 pr o j e c t s a s o n 3 1 M a r c h 2 0 11
71
72
credit
linked
SHGs
covering
9.7
crore
poor
h o u s e h o l d s a s o n 3 1 M a r c h 2 0 11.
CONCLUSION
Th e p ar l i a m e n t c r e a t e d t h e N A B A R D a c t a n d t h e Ap e x
b a n k i n o r d e r t o a i d t h e r u r a l f a r me r s t h a t h a d l o n g b e e n
n e g l e c t e d b y t h e G o v e r n m e n t . Th e r e w a s s u c h a n i m i t a t i v e
to
uplift
industries
and
capital
market
that
these
a g r i c u l t u r a l s e c t o r s w e r e b e i n g gr o s s l y n e g l e c t e d . E v e n
the apex bank of the country the Reserve Bank of India
w a s s o k n e e d e e p i n o t h er r e s p o n s i b i l i t i e s a n d d u t i e s t h a t
i t c o u l d n o t g i v e a d e q u a t e a s s i s t a n c e t o t h e r u r a l f a r me r
a n d t h e i r p o p u l a t i o n w h i c h m o s t l y c o mp r i s e d o f a r t i s a n s ,
s m a l l b u s i n e s s o w n e r s a n d s ma l l o t h e r s ma l l e n t e r p r i s e s .
73
w or t h y f a r m e r s a s c r e d i t
w o r t hy o n e s , t h e s e f a r me r s w e r e l o n g r e j e c t e d by o t h e r
financial institutions due to the lack of guarantee on their
c r e d i t . B u t r e c e n t s t a t i s t i c s w i l l s h o w t h a t t h e f a r me r s
have lived up to the confidence instilled in them and are
a c t u a l l y c r e a t i n g pr o f i t a n d a r e n o w o p e r a t i n g h a s s l e f r e e
when it comes to financing their activities.
Var i o u s s c h e m e s a n d f u n d s a l l o w f a r m e r s t o i n n o v a t e
and create new methods and inventions that help them in
74
also
to
the
state
government
and
NGOs
and
BIBLIOGRAPHY:
Websites:
www.nabard.org.
www.indiafinace.org.
www.indiatimes.com.
Www. economictimes.indiatimes.com.
www.indiamicrofinance.com
75
76