DIDF = Dairy Processing and Infrastructure Development Fund, FIDF = Fisheries and Aquaculture Infrastructure Development Fund, FPF = Food Processing Fund, LTIF = Long Term Irrigation Fund, MIF = Micro-Irrigation Fund, NIDA = NABARD Infrastructure Development Assistance, PMAY-G = Pradhan Mantri Awaas Yojana-Gramin, RIDF = Rural Infrastructure Development Fund, RIPF = Rural Infrastructure Promotion Fund, SBM-G = Swachh Bharat Mission-Grameen, WIF = Warehouse Infrastructure Fund.
Robust and reliable rural infrastructure to support modern agriculture, improved irrigation, enhanced rural connectivity, better market access, more renewable energy, and quality education and health is vital for enhancing production, consumption, and trade of goods and services. This, in turn, will lead to more sustainable rural livelihoods in India.
NABARD plays a crucial role in facilitating the financing, promotion, and sustainable development of rural infrastructure. It provides technical assistance and financial support for the construction of rural roads, irrigation systems, warehousing facilities, and renewable energy installations by leveraging various funds vested in it. The cumulative funds sanctioned by NABARD till FY2024 under infrastructure financing stood at ₹8.2 lakh crore while disbursements added up to ₹6.2 lakh crore (Figure 5.1).
The Rural Infrastructure Development Fund (RIDF) (instituted in 1996) aims to support public investment, given the shortfall of priority sector lending, thus bridging the rural–urban infrastructure gap towards promoting inclusive rural growth and socioeconomic development.
During FY2024 (RIDF Tranche XXIX), NABARD received an allocation of ₹40,474.6 crore under RIDF (2.4% increase over FY2023) and sanctioned ₹50,115.5 crore towards financing rural projects in agriculture and related activities, irrigation, social sector, and rural connectivity (Figure 5.2).
Over the decades, RIDF has played a significant role in financing rural infrastructure projects across India, contributing to improved rural connectivity and agricultural productivity (Figure 5.3, Showcase 5.1).
RIDF = Rural Infrastructure Development Fund.
Project: Providing irrigation facilities in rainfed areas
Location: 15 villages of Babina block, Jhansi district, Bundelkhand region, Uttar Pradesh
Implementing agency: Irrigation and Water Resource Department, Government of Uttar Pradesh
Total financial outlay: ₹246.8 crore
NABARD assistance: ₹146.2 crore
Challenge addressed: Irrigation in drought-prone villages not within the command of any other project.
Intervention
Output>>Outcomes>>Impact
Construction of pump house and canal system
Impact evaluation studies on RIDF projects have indicated improvements in rural socioeconomic conditions and rise in credit demand within project areas (Box 5.1). Additionally, these studies have shown a diversification of lending portfolios, growth in deposits, and expansion of bank branch networks, contributing to enhanced financial inclusion. Furthermore, the investments and interventions have led to better rural health benefits, which have not just reduced rural health care expenses but also resulted in a more productive rural workforce.
NABARD contributed to the state share of flagship GOI schemes by sanctioning projects worth ₹5,155 crore under Jal Jeevan Mission, ₹1,063 crore under Pradhan Mantri Kusum Yojana, and ₹617 crore towards the installation of 20,000 solar powered pump sets under the Saur Sujala Scheme in Chhattisgarh.
During the year, the RIDF portal underwent changes such as the introduction of an appraisal and disbursement module and monitoring through geo map.
Financial assistance is provided under Rural Infrastructure Promotion Fund (RIPF) for the building of innovative, experimental, or promotional last mile rural infrastructure and rural capacity building initiatives.
As on 31 March 2024, cumulative sanctions under RIPF stood at ₹77.7 crore and disbursements at ₹52.5 crore.
1. Impact evaluation of rural drinking water supply project in Odisha indicated
2. Impact evaluation of anganwadi project in West Bengal indicated improvements in
Food habits and nutritional status of the children, hygiene levels, drinking water and sanitation facilities, and quality of awareness building and education delivery at the centres could be improved further.
IIT = Indian Institute of Technology, RIDF = Rural Infrastructure Development Fund.
Project: Time-controlled automated sprinkler irrigation system for greenhouse cultivation
Location: South Sikkim (Namchi) district, Sikkim
Implementing agency: Agricultural Technology Management Agency, Sikkim
Total financial outlay: ₹5.4 lakh
NABARD assistance: ₹4.8 lakh
Challenge: Improving water-use efficiency in dry area for higher production and yield.
Intervention: Automated time-based irrigation systems optimising soil moisture using sensor and pump set up in greenhouses for horticulture and floriculture.
Beneficiaries: Five flower growers
Output>>Outcomes>>Impact
Poly house
The Long-Term Irrigation Fund (LTIF) funding arrangement has been extended up to FY2026 for state governments for 60 ongoing projects under the Accelerated Irrigation Benefit Programme and 85 projects under Command Area Development and Water Management with Government of India interest subvention up to 2%.
aAs shared by Ministry of Jal Shakti, Government of India.
AIBP = Accelerated Irrigation Benefit Programme, LTIF = Long Term Irrigation Fund
Micro Irrigation Fund (MIF) was announced in the Union Budget for FY2020 endowed with the initial corpus of ₹5,000 crore, to be operationalised by NABARD for the period FY2020–FY2024.
The objective of MIF is to support state governments in mobilising additional resources to expand micro-irrigation coverage and encourage its adoption beyond the provisions of Pradhan Mantri Krishi Sinchayee Yojana—Per Drop More Crop.
NABARD Infrastructure Development Assistance (NIDA) offers flexible long-term loans to state governments, well-managed public sector entities, and other eligible entities for financing rural infrastructure. Through NIDA, NABARD has been contributing to the creation of key
NIDA = NABARD Infrastructure Development Assistance
Notes:
infrastructure and improving the quality of life in rural India. The scope for funding has further broadened with the inclusion of public–private partnership (PPP) and non-PPP projects to be undertaken by registered entities like corporates/companies, cooperatives, etc.
ha = hectare, MLPD = million litres per day, NIDA = NABARD Infrastructure Development Assistance, PMAY-G = Pradhan Mantri Awaas Yojana–Gramin, STP = sewage treatment plant.
Project: Narmada–Kshipra Link Multipurpose Project, Madhya Pradesh
Location and challenge: Inter-basin water transfer through piped irrigation network to water scarce areas of upper Chambal basin.
Total financial outlay: ₹1,856.7 crore
NIDA term loan: ₹1,745.8 crore
Output>>Outcomes>>Impact
Narmada–Kshipra Link Multipurpose Project, Madhya Pradesh
NABARD has been offering loans and subsidies for setting up post-harvest infrastructure such as warehouses, cold storage facilities, processing units, packaging centres, etc., (Figures 5.8–5.10).
NABARD extends financial assistance through the Warehouse Infrastructure Fund (WIF) to state governments, state-owned agencies, and corporate entities to systematically enhance warehouse capacity, thereby strengthening agricultural value chains. The investment through WIF plays a pivotal role in facilitating and enhancing farmers’ access to finance through negotiable warehouse receipts (NWR).
WIF = Warehouse Infrastructure Fund. Note: For WIF 2013–14, out of a corpus of ₹5,000 crore, ₹519 crore was refunded to commercial banks
aThese storage structures have been geotagged and linked to a centralised database which can be ported with other platforms like e-NAM to create an integrated portal.
bThe app is being further developed to help farmers know the availability of the space in the agri-storage infrastructure, improve booking and payment facilities, and integration with other website/apps such as payment gateways, bank branch location, etc.
APLMC = Agricultural Produce and Livestock Market Committee, e-NAM = e-National Agriculture Market, km = kilometre, MT = metric tonne, NER = North-Eastern Region, WIF = Warehouse Infrastructure Fund.
India’s food processing sector is one of the largest in the world with a projected output of $535 billion by FY2026.7
The development of the food processing industry is essential for enhancing food security, reducing post-harvest losses, generating employment, stimulating economic growth, and meeting the evolving needs of consumers in both domestic and international markets. NABARD’s Food Processing Fund (FPF) has been instrumental in mitigating food wastage, broadening value addition, and establishing connections between farmers and consumers. NABARD has committed ₹1,191.6 crore as financial assistance up to FY2024 for projects spanning 17 states, including NER states like Assam, Manipur, and Meghalaya.
Project: Cremica Mega Food Park
Implementing agency: Cremica Food Park Pvt Ltd
Term loan sanctioned: ₹40.2 crore
Location: Haroli, Una district, Himachal Pradesh.
Progress
Output >> Outcomes >> Impact
The Dairy Processing and Infrastructure Development Fund (DIDF) was vested with NABARD in FY2018 for the creation and modernisation of milk processing facilities and development of other dairy-related infrastructure, with initial corpus of ₹8,004 crore and implementation period up to FY2023.
DIDF = Dairy Processing and Infrastructure Development Fund, MLPD = million litres per day, MTPD = metric tonnes per day, NCDC = National Cooperative Development Corporation, NDDB = National Dairy Development Board.
As per the Union Budget FY2019, the Fisheries and Aquaculture Infrastructure Development Fund (FIDF) was established (with NABARD as one of the nodal loaning entities) with a total corpus of ₹7,522.5 crore, spanning a lending period of 5 years from FY2019 to FY2023. The scheme has since been extended till 31 March 2026.
Tamil Nadu, West Bengal, Andhra Pradesh, Gujarat, Karnataka, Kerala, Maharashtra, Goa, Odisha, Himachal Pradesh, Jammu and Kashmir, and Haryana.
FIDF = Fisheries and Aquaculture Infrastructure Development Fund.
Project: Construction of fishing harbour
Location: Tharangambadi in Mayiladuthurai district, Tamil Nadu
Funding
Challenges addressed
Tharangambadi fishing harbour site
Intervention
Output>>Outcomes>>Impact (expected)
Under the initiative ‘Renewed Engagements with State Governments for Infrastructure Financing’, Rural Infrastructure Assistance to State Governments is being revamped to realign with requirement of state governments in the eastern region and aspirational districts in other states for creating infrastructure that supports rural livelihoods.
The synergy between physical and digital infrastructure is essential for building resilient, efficient, and inclusive infrastructure systems that support sustainable development, foster innovation, and enhance quality of life for people around the world.
NABARD is in the process of developing policy guidelines for working capital financing and development of exclusive short-term working capital financing products which can facilitate composite loan assistance to prospective entrepreneurs willing to set up food processing units outside the designated food parks. It is also exploring the possibility of collaboration with financial and banking institutions, viz. commercial banks, regional rural banks, and cooperative banks, for providing working capital finance assistance.
The effectiveness of RIDF support may be enhanced by extending financial assistance to PPP projects and catalysing private sector investment in rural infrastructure development, contributing to sustainable economic growth, poverty reduction, and ensuring holistic development of rural areas.
Innovations in infrastructure financing are essential for mobilising capital, unlocking investment opportunities, and accelerating infrastructure development. Such innovative financing solutions are bound to play a crucial role in addressing infrastructure gaps, promoting sustainable development, and building resilient and inclusive infrastructure systems for the future.
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