3. The growth in business was reflected in the bank’s operating surplus, which is Rs.1128 crore on a business volume of around Rs.81,000 crore.
4. The growth has also reflected in increase in per employee business, which now stands at Rs.24.13 crore against Rs.19.30 crore last year. Therefore, increase in productivity.
5. This has been without breaching the 1% best practice of administrative cost as a percentage of working funds (.73%).
6. In 2007-08, which will be the Silver Jubilee Year of NABARD, we shall strive to reach a six-figure balance sheet.
7. Within investment credit refinance, 75% goes to farm sector supporting agriculture investments and 25% goes to non-farm sector. The 1/4 th non-farm sector is important because 40% of rural households are non-cultivator households engaged in non-farm activities. This sector is unorganised, exclusion is high and our refinance, which has a credit plus orientation, is aimed at lessening the financial exclusion. In non-farm sector, the major activities are agro processing (55%) and rural housing (17%).
8. In farm sector, the major components are farm mechanization (21%), micro finance (15%), minor irrigation (7.6%) and dairy development (5.7%).
9. In the case of production credit refinance, the focus has been on realizing at ground level crop loans being extended to farmers at 7% as per GoI policy. With this end in view, NABARD has increased availability of refinance to 40% of ground level credit, facilitated more number of cooperative banks becoming eligible for refinance, provided refinance at concessional rate of 2.5% for cooperatives and 4.5% for RRBs and linked refinance to institutional reforms towards strengthening the cooperative banking system. This facilitated increase in production credit refinance to Rs.14,758 crore during 2006-07 as against Rs.9617 crore in 2005-06(53% growth).
10. I have so far been focusing on the levels of business operations. However, business performance of NABARD should be judged by other standards as well, viz.
- Promotional and development support extended by it.
- Institutional reforms
- Building rural infrastructure
- Banking supervision
11. Let me now turn to promotional and development support. This can be discussed under two heads : non farm sector and farm sector.
12. I have already mentioned that 40% of rural households are non-cultivator households, where financial exclusion is high and, therefore, our support to the non-farm sector by way of promotion and development initiatives are extremely critical.
13. Within the non-farm sector, we have four major initiatives. District-wise Rural Industry Programmes(DRIP), development of activity clusters, training of rural youth for purposes of employment through entrepreneur development programme and rural marketing.
14. Our DRIP programme now extends to 106 districts facilitating overall credit flow of Rs.13,363 crore with refinance support at around Rs.2,077 crore. This has facilitated setting up of around 12 lakh business units and providing employment to 26 lakh persons.
15. We have identified, promoted and developed as many as 42 clusters in 18 states during the last year alone. These include, handlooms, handicrafts, silk, horticulture, bamboo, leather goods, jute etc. We are grateful to our NGO partners for this support.
16. In regard to training of rural youth, we conducted 663 entrepreneur development programmes last year with a cost of around Rs.4.43 crore as grant funds. Cumulatively, 2.42 lakh youth have so far been trained for self-employment.
17. Promotional initiatives in the farm sector covered watershed development, tribal development programmes and micro finance related initiatives. NABARD has set up a Watershed Development Fund (WDF) of Rs.200 crore and also gets support from kFW for the Indo-German Watershed Development Project. Our focus during 2006-07 has been on getting a cluster of watersheds of 15000 hectares each in the distressed 31 districts across 4 states. This programme will address the issue of soil and moisture conservation and help improve agronomic practices in distressed areas. Apart from this, the Indo-German Watershed Development Project has also been extended to Maharashtra to Andhra Pradesh and Gujarat covering the entire Maharashtra and 4 districts each in AP and Gujarat .
18. NABARD has a Tribal Devlopment Fund (TDF) of Rs.50 crore which has been used for development of orchards in tribal settlements. NABARD has sanctioned an assistance of Rs.21.16 crore for 11 projects in 9 states.
19. The micro finance movement in India has been designed and nurtured by NABARD for over a decade. During 2006-07, against a target of 3.85 lakh SHGs to be credit linked, 3.12 lakh new SHGs and 2.41 lakh existing SHGs were facilitated credit linkage. Bank loan of Rs.2922 crore was disbursed supported by NABARD refinance of Rs.1161 crore. Cumulatively, the number of SHGs credit linked as on 31 March 2007 was 25.50 lakh groups with a bank loan of Rs.14320 crore and NABARD refinance of Rs.5320 crore. One redeeming feature is that the share of non-Southern states in SHG movement has increased from 29% in 2000-01 to 50% in 2006-07. NABARD has been extending support for this programme by providing grant support to banks and NGOs for promoting and credit linkage of SHGs, training and capacity building of NGO personnel, bank/ government officials and SHG members. In 9 states, NABARD has also initiated a pilot project for graduating matured SHGs into micro enterprise groups.
20. Institutional Reforms
The focus has been mainly on building a vibrant and healthy cooperative banking structure. The revival package for the Short Term Cooperative Credit Structure (STCCS) is presently being implemented in 10 states. 7 more states have already agreed in principle to implement the reform package. Amendments to the Cooperative Societies Act giving effect to the reforms as envisaged in the package have already been passed in Andhra Pradesh and a number of other states are in the process of amending their Cooperative Societies Act. Special audit of Societies have commenced. Training modules for Cooperative Societies and bank personnel have been designed, a Common Accounting and Management Information System is being finalized and implementation of the package is monitored by a National Level Monitoring Committee. In the RRBs segment, sponsor bank wise merger of RRBs at state level is near completion. |
