Functions of NABARD

NABARD– National Bank for Agriculture and Rural Development

In 1982, on 12th of July, NABARD was founded to execute ‘the National Bank for Agriculture and Rural Development Act 1981’, based on B.Sivaraman Committee’s recommendations. It took the position of the RBI’s Rural Planning and Credit Cell (RPCC) and Agricultural Credit Department (ACD), as well as the Agricultural Refinance and Development Corporation (ARDC). It counts as one of the most prestigious agencies, with a budget of Rs.14080 crore (cent percent share). Also, the approved share capital is Rs.30,000 crore.

The National Bank for Agriculture and Rural Development (NABARD) is the country’s most significant institution for the development of small-scale, cottage, and village businesses, as well as other rural enterprises. NABARD also supports and encourages coordinated growth across allied economies.

NABARD’s international affiliates contain organizations that are affiliated with the World Bank and global development agencies that are working for rural and agricultural development. These organizations assist NABARD by providing advice and financial assistance to rural people and help them in their upliftment and it also optimizes agricultural processes.

NABARD has played a key role in establishing rural innovations, social innovations, and social enterprises in rural areas. Many of the involvements have been grounded through collaboration with over 4 thousand partner organizations. Some of the involvements are livelihood initiative, water and soil conservation through watershed approach, increment in productivity of crops by way of lead crop, etc. Despite this, NABARD pays high taxes to the government, routinely ranking among the 50 top tax payers. In their never-ending hunt for ideas and answers, NABARD essentially returns all revenues to development investment.

Functions or Role of NABARD

1. NABARD acts as the top finance agency for such institutions that provide production and investment loans in order to promote diverse rural development initiatives.
2. Takes actions to improve the loan delivery system’s absorptive capacity, such as monitoring, formulating rehabilitation plans, reforming credit institutions, and training people, among other things.
3. Maintains contact with the state governments, Government of India, the Central Bank of India i.e., RBI, and other institutions of national level associated with policy formation, and coordinates the finance operations of rural area of all the institutions that are engaged in development activity at the ground level.
4. It is responsible for the monitoring and assessment of projects that it has refinanced.
5. The National Bank for Agriculture and Rural Development (NABARD) restructures the financial institutions that fund the rural economy.
6. NABARD contributes to the establishment of institutions that benefit the economy of rural.
7. NABARD also monitors its customer institutions.
8. It controls the financial institutions that assist the economy of rural India.
9. It offers training to organisations that operate in the subject of rural development.
10. It governs and supervises regional rural banks and cooperative banks across India.

Development in Rural area because of NABARD:

NABARD’s contribution to India’s rural development is enormous. The Government of India established the National Bank For Agricultural & Rural Development (NABARD) as the top most Development Bank with the mission of easing loan flow for the development and promotion of cottage, agriculture, and village industries. In 2005–2006, NABARD sanctioned Rs 1,57,480 cr. in loans for agricultural operations. The entire GDP is expected to expand at an annual rate of 8.4%. In the future years, the whole Indian economy is expected to develop faster. NABARD plays a critical role in India’s overall development, particularly in agricultural and rural development.

NABARD established the Rural Innovation Fund with the help of the Swiss Agency for Development and Cooperation. Another well-known rural development plan for the bank is the RIDF or Rural Infrastructure Development Fund. A total of Rs 51,283 cr. has been allocated to 2,44,651 projects under the RIDF plan, including rural roads, soil conservation, irrigation, construction of bridges, health and education, and water initiatives. The Rural Innovation Fund was established to assist creative, risk-free, unconventional trials in these industries that have the ability to increase livelihood and job prospects in rural regions. Individuals, self-help groups, NGOs, Panchayati Raj, cooperatives with the competence and commitment to execute innovative ideas to improve the quality of life in rural regions are eligible for support.

The goal of the Rural Infrastructure Development Fund or RIDF is to foster rural and agricultural innovation through practical measures. Programme’s effectiveness is determined by a variety of elements, but the sort of organization to which help is provided is critical in terms of producing and implementing ideas in a commercially viable manner. A cooperative organization means it is a member-driven but formal and socioeconomic organization, whereas a SHG is a sort of informal organization. The social colour of NGO is more prominent, but the political colour of PRI is more prominent. When compared to PRIs, NGO, and SHG, cooperative organisations perform better (in terms of effectiveness and financial efficiency) in the agricultural and rural sectors.

Conclusion

NABARD- National Bank for Agriculture and Rural Development was founded on 12th July 1982. It counts as one of the most prestigious agencies, with a budget of Rs.14080 crore (cent percent share). In 2005–2006, NABARD sanctioned Rs 1,57,480 cr. in loans for agricultural operations. The Rural Innovation Fund was established to assist risk-free, unconventional trials in these industries that have the ability to increase livelihood and job prospects in rural regions. A total of Rs 51,283 cr. has been allocated to 2,44,651 projects under the RIDF plan.