The decision in this regard has been taken to streamline those projects which get stuck due to lack of funds. According to a NITI Ayog official, the Centre has decided to rope in the micro financing agency to give a boost to irrigation related infrastructural development projects in rural areas as most of the projects get delayed due to Centre-state stalemate over release of their share of funds.
Now, no projects would get delayed in dearth of fund as Nabard will fund the whole project and recover the project amount from both the Centre and states in accordance to their share, the official said.
Elaborating further, the official said, “The stalemate over disbarment of funds for rural projects has always been a bone of contention between the Centre and the states. The cases of state adopting step-motherly attitudes towards Central schemes have delayed several important projects. The government has empowered the rural funding agency to take care of the development rural areas.”
Pinning hope on Nabard, the official said, “It’s an old institution and have good track record of executing several important projects in rural areas. The agency is financially very sound and has the resources to expedite different projects.”
In a latest development, Union Water Resources Ministry has inked an agreement with Nabard for speedy implementation of 99 prioritised projects under accelerated irrigation benefits programme (AIBP) throughout the country.
The Nabard will raise in phases over Rs 77,000 crore from market to fund around 99 prioritised irrigation projects, including 56 in drought-prone districts of 18 states, under the Pradhan Mantri Krishi Sinchayee Yojana (PMKYS) over the next four years. Union Minister Uma Bharti made the announcement during the signing ceremony of a memorandum of agreement (MoA) between the Ministry of Water Resources and Nabard for raising a long-term irrigation fund (LTIF) of Rs 20,000 crore.
Earlier, the Food Processing Ministry had expressed to rope in Nabard to fund new cold chain projects along with mega food parks. Food Processing Secretary AK Srivastava had said that Nabard so far has approved loans worth around Rs 540 crore for food parks and have also disbursed Rs 40-45 crore.
“What we are now looking for is if Nabard could also fund our new cold chain projects. Till now, they are doing only for the mega food parks and the units therein. If they could also do that (financing) for cold chain and also the processing units outside the parks, then this fund will be utilised in a faster manner,” he had said.
Recognising the importance of easy access of credit, a special fund of Rs 2,000 crore has been created in Nabard in the budget of 2014-15, for extending affordable credit to entrepreneurs for setting up food processing units in designated food parks. Loan is extended by Nabard from the fund to various categories of promoters in food processing sector.