The State Projects Department (SPD) provides loans from the Rural Infrastructure Development Fund (RIDF) with the sole objective of giving low cost fund support to State Govts. and State Owned Corporations. Initially, only State Governments were eligible to borrow out of RIDF on project basis. However, with effect from 1st April 1999, Panchayat Raj Institutions (PRIs), Non-Governmental Organisations (NGOs), Self-Help Groups (SHGs), etc. are also eligible to borrow out of RIDF. Over the last nearly two decades, RIDF has financed nearly one fifth of India’s total rural infrastructure.

 

 

A major policy initiative for rural infrastructure development has been the setting up of RIDF in NABARD in 1995 for financing rural infrastructure projects.

RIDF was set up to fund incomplete infrastructure projects in States due to lack of financial resources. Due to inadequacy of critical infrastructure, banks were unable to channelise their lending to agriculture as per priority sector guidelines. 

 

The Government of India, therefore, announced in the budget of 1995-96, setting up of Rural Infrastructure Development Fund (RIDF), to be operationalised by NABARD towards financing of, at that point of time, the ongoing rural infrastructure projects in irrigation sector. Subsequently, RIDF was made available for new rural infrastructure projects and its ambit was broadened to cover almost all important aspects of rural infrastructure.

 

Resources to RIDF are contributed out of the shortfall in lending to priority sectors by Commercial Banks as stipulated by RBI. 

 

The corpus of a particular tranche of RIDF is decided by Government of India every year. Annual Corpus under RIDF is allocated among all States on the basis of prescribed norms comprising of

 

• Geographical Area of the State
• Composite Infrastructure Development Index
• Rural Population
• Inverse of Credit/Deposit Ratio 
• State Performance under RIDF (Utilisation of NA, actual drawals to drawables (%)
• Percentage of Borrowing power under RIDF to drawables
• Share of irrigation and agri related projects to total sanctions 
• The amount of contribution by banks to a particular tranche of RIDF or any other Fund is decided in the beginning of the financial year. The concerned banks are called upon by NABARD as and when funds are required for disbursement. 
• NABARD provides financial assistance to the State Governments for projects covering 36 activities broadly classified under 3 heads viz. Agriculture & Related Sector, Social Sector and Rural Connectivity.
• Eligible projects are submitted by the State Governments through their Finance Departments to the respective Regional Offices (ROs) of NABARD. The projects are appraised by NABARD’s Regional Offices and forwarded to NABARD Head Office where they are placed before a Project Sanctioning Committee (PSC) or Internal Sanctioning Committee (ISC) for consideration of sanction.
• Rural Infrastructure Promotion Fund (RIPF) has been created with an initial corpus of Rs. 25 crore and operationalized from 1st September 2011 with an objective to promote capacity building among stakeholders as also for supporting innovative/experimental/promotional infrastructure especially in rural sectors. The activities/projects supported under RIPF are in the nature of experimental prototype projects which are likely to have positive impact on promotion of sustainable infrastructure development in rural and agricultural sectors.

 

 

RIDF Tranche I, was placed with NABARD during 1995-96 with an allocation of Rs. 2,000 crore. The annual corpus has now reached to Rs. 25,000 crore under RIDF XXIII (2017- 18).

 

Cumulative Sanctions & Disbursements as on 31.03.2018  (in Rs. Crore)

 

From RIDF I to XXIII, NABARD has sanctioned total 6,27,179 projects involving loan assistance of Rs. 2,95,376 crore to State Governments as on 31 March 2018 (including for warehousing projects).

Of this, an amount of Rs. 2,22,096 crore (75%) has already been disbursed. In addition, Rs. 18,500 crore was sanctioned and disbursed to National Rural Road Development Agency (NRRDA) for rural roads under Bharat Nirman. This translates to total sanctions of Rs.3,13,876 crore and total disbursements of Rs.2,40,596 crore (77%).

Sector-wise Share of Cumulative Sanctions

 

Sector-wise cumulative RIDF loans sanctioned as on 31 March 2018 (Rs. 2,95,376 crore), accounted for:

 

• Agriculture, irrigation and allied sectors (44%)
• Social sector (16%) 
• Rural roads and bridges (40%)

 

The estimated cumulative economic and social benefits under RIDF as on 31 March 2018 were as under:

 

 

NABARD's support for creation of Rural Infrastructure through RIDF has resulted in considerable benefits such as: 

 

• Committed supply of funds under RIDF sanctioned projects has enabled State Governments to take up the implementation more expeditiously
• Financing of incomplete projects has resulted in unlocking of sunken investments already made by the State Governments, thus, realizing the full benefits of the projects
• Creation of additional irrigation potential, generation of non-recurring employment and creation of jobs has contributed to the economic prosperity in the rural areas
• Monitoring of the projects has resulted in timely implementation of majority of the projects and has reduced the time and cost overrun
• Completion of projects through RIDF assistance from NABARD has helped in growth of real sectors in rural areas by spurring the demand for credit from Banks.

 

Tranche-wise, sector-wise details of closed/on-going projects and schemes are given in Annexure I and II.