Nabard offers CSR schemes to corporates

in Jharkhand
Arindam Sinha

Posted: Tuesday, Mar 09, 2010 at 0055 hrs IST

Tags: Nabard | CSR Schemes

The National Bank for Agriculture & Rural Development (Nabard) is looking for
corporates in Jharkhand who are willing to take up its livelihood-enhancing schemes for
rural areas in the state while fulfilling their own corporate social responsibility (CSR)
obligations.

Although around 12 to 14 corporates are engaged in CSR activities in the state, a majority
of them are not focused on improving the livelihood of the beneficiaries of their schemes.

Nabard with its various developmental initiatives and resources thinks that forging an
alliance with like-minded individuals and organizations would give a boost to its
livelihood earning schemes.

“Some of them (CSR projects) are not moving towards livelihood activities; they are
either concentrating only on health or education; so, we wanted them to take a holistic
approach to be adopted while having a strategy for CSR activity,” said Nabard Jharkhand
regional office chief general manager (CGM) M V Ashok.

This is Nabard’s first move in Jharkhand to try to woo the corporate sector into taking up
its tested projects through their CSR activities as they are said to ensure livelihood
generation.

Speaking at the inauguration here of a “consultative meet for coporates to devise

Jharkhand-specific strategy under CSR initiatives of corporates” operating in Jharkhand,
Nabard executive director P L Behera expected corporates in the state to come forward in
collaborating with Nabard, especially as Jharkhand had a poor developmental index.

Nabard is currently disseminating amongst corporates in Jharkhand information about the

schemes and programmes it has, particularly in terms of the financial grants and loans
associated with them, so that they could take advantage of them. Thus, Nabard, which is
currently associated with some of the CSR initiatives taken up by Krishi Gram Vikas
Kendra (KGVK) of the Usha Martin group and the Tata Steel Rural Development Society
(TSRDS) of Tata Steel, is looking forward to more such relationships with corporates in
Jharkhand.
While KGVK is running several livelihood related projects in Jharkhand today including
at Rukka near Ranchi where farmers/technicians are trained to later transfer the
knowledge on the field, TDRDS, among many of its initiatives, is currently doing jointly
with Nabard and Pune-based Bharatiya Agro Industries Foundation, a tribal development
project at Seraikela in Seraikela-Kharswan district.

Under Nabard’s ‘tribal development model’ an NGO/CSR unit is required to identify

around 100 to 500 acres of land belonging to several tribal farmers, with each tribal
farmer having plantation crop at least on an acre of land, water storage structures and
some allied income-generating activity like diary/poultry/goatery, with Nabard providing
for the community as a whole facilities such common processing centres, etc. Nabard is
seeking to establish at least 20 tribal groups during 2010-11 under its “tribal development
model” which involves a total disbursement of grant money between Rs 55-Rs 60 lakh to
each such project, at various stages of their completion in five to seven years.

Similarly, under its grant-based rural entrepreneurship development programme, which

has so far been taken advantage of by several groups each comprising of 20-25
individuals, the agricultural bank is targeting to train & launch at least 50 such groups of
rural entrepreneurs in the next fiscal in areas such as garment making, mushroom
cultivation, vermin-compost making, silk weaving, etc.

As for its watershed projects each of which requires coming together of five to six
villages involving around 500 to 1,000 hectares of land, Nabard is keeping a target of
funding 50 new projects during 2010-11

Introduction
NABARD is set up as an apex Development Bank with a mandate for facilitating credit
flow for promotion and development of agriculture, small-scale industries, cottage and
village industries, handicrafts and other rural crafts. It also has the mandate to support all
other allied economic activities in rural areas, promote integrated and sustainable rural
development and secure prosperity of rural areas. In discharging its role as a facilitator
for rural prosperity NABARD is entrusted with 1. Providing refinance to lending
institutions in rural areas 2. Bringing about or promoting institutional development and
3. Evaluating, monitoring and inspecting the client banks Besides this pivotal role,
NABARD also: • Acts as a coordinator in the operations of rural credit institutions •
Extends assistance to the government, the Reserve Bank of India and other organizations
in matters relating to rural development • Offers training and research facilities for
banks, cooperatives and organizations working in the field of rural development •
Helps the state governments in reaching their targets of providing assistance to eligible
institutions in agriculture and rural development Acts as regulator for cooperative
banks and RRBs
Some of the milestones in NABARD's activities are:
• Refinance disbursement under ST-Agri & Others and MT-Conversion/ Liquidity
support aggregated Rs.16952.83 crore during 2007-08. • Refinance disbursement under
Investment Credit to commercial banks, state cooperative banks, state cooperative
agriculture and rural development banks, RRBs and other eligible financial institutions
during 2007-08 aggregated Rs.9046.27 crore. •
Through the Rural Infrastructure Development Fund (RIDF) Rs.8034.93 crores were
disbursed during 2007-08. With this, a cumulative amount of Rs.74073.41 crore has been
sanctioned for 280227 projects as on 31 March 2008 covering irrigation, rural roads and
bridges, health and education, soil conservation, drinking water schemes, flood
protection, forest management etc.
• Under Watershed Development Fund with a corpus of Rs.613.71 crore as on 31
March 2008, 416 projects in 94 districts of 14 states have benefited. • Farmers now
enjoy hassle free access to credit and security through 714.68 lakh Kisan Credit Cards
that have been issued through a vast rural banking network. • Under the Farmers' Club
Programme, a total of 28226 clubs covering 61789 villages in 555 districts have been
formed, helping f

Genesis and Historical Background

The Committee to Review Arrangements for Institutional Credit for Agriculture and
Rural Development (CRAFICARD) set up by the RBI under the Chairmanship of
Shri B Sivaraman in its report submitted to Governor, Reserve Bank of India on
November 28, 1979 recommended the establishment of NABARD. The Parliament
through the Act 61 of 81, approved its setting up.

The Committee after reviewing the arrangements came to the conclusion that a new
arrangement would be necessary at the national level for achieving the desired focus and
thrust towards integration of credit activities in the context of the strategy for Integrated
Rural Development. Against the backdrop of the massive credit needs of rural
development and the need to uplift the weaker sections in the rural areas within a given
time horizon the arrangement called for a separate institutional set-up. Similarly. The
Reserve Bank had onerous responsibilities to discharge in respect of its many basic
functions of central banking in monetary and credit regulations and was not therefore in a
position to devote undivided attention to the operational details of the emerging complex
credit problems. This paved the way for the establishment of NABARD.

CRAFICARD also found it prudent to integrate short term, medium term and long-term
credit structure for the agriculture sector by establishing a new bank. NABARD is the
result of this recommendation. It was set up with an initial capital of Rs 100 crore, which
was enhanced to Rs 2,000 crore, fully subscribed by the Government of India and the
RBI.
armers get a Mission

Promoting sustainable and equitable agriculture and rural development through effective
credit support, related services, institution building and other innovative initiatives.
In pursuing this mission, NABARD focuses its activities on: Credit functions,
involving preparation of potential-linked credit plans annually for all districts of the
country for identification of credit potential, monitoring the flow of ground level
rural credit, issuing policy and operational guidelines to rural financing institutions
and providing credit facilities to eligible institutions under various programmes
Development functions, concerning reinforcement of the credit functions and making
credit more productive Supervisory functions, ensuring the proper functioning of

cooperative banks and regional rural bankccess to c Objectives

NABARD was established in terms of the Preamble to the Act, "for providing credit for
the promotion of agriculture, small scale industries, cottage and village industries,
handicrafts and other rural crafts and other allied economic activities in rural areas with a
view to promoting IRDP and securing prosperity of rural areas and for matters connected
therewith in incidental thereto". The main objectives of the NABARD as stated in the
statement of objectives while placing the bill before the Lok Sabha were categorized as
under : 1. The National Bank will be an apex organisation in respect of all matters
relating to policy, planning operational aspects in the field of credit for promotion of
Agriculture, Small Scale Industries, Cottage and Village Industries, Handicrafts and other
rural crafts and other allied economic activities in rural areas. 2. The Bank will serve as
a refinancing institution for institutional credit such as long-term, short-term for the
promotion of activities in the rural areas. 3. The Bank will also provide direct lending to
any institution as may approved by the Central Government. 4. The Bank will have
organic links with the Reserve Bank and maintain a close link with in.redit, technology
and exten

National Seminar
on
Agricultural Credit
Silver Jubilee
Celebrations
NABARD
25 YEARS OF DEDICATION
TO RURAL PROSPERITY
NABARD completed 25 years of its eventful and trailblazing
existence on 12 July 2007. Established in 1982, by an Act of
Parliament, NABARD's mandate was to provide focused and
undivided attention to the development of rural India by facilitating
credit flow for promotion of agriculture and rural non farm sector.
Emphasizing this in no uncertain terms, its mission statement
underscores NABARD's goal to "promote sustainable and equitable
agriculture and rural prosperity through effective credit support,
related services, institution development and other innovative
initiatives".

NABARD's functions can be classified into 4 major categories viz.

Credit Planning, Financial Services, Promotion and Development, and
Supervision. Under Credit Planning NABARD prepares Potential
Linked Credit Plan (PLP) annually for each district of the country by
assessing potential available in agriculture and rural sector. This serves
as a guide for banks and Government agencies to prepare their own
investment and credit plans in the district and state. Under its Financial
services, it refinances commercial, co-operative and regional rural
banks for lending to on farm and non-farm activities. This includes
farm activities like minor irrigation, animal husbandry, farm
mechanization, forestry, fisheries, land development, horticulture,
plantation and medicinal crops and non-farm like rural industries,
artisans, handicrafts, handlooms, rural housing, rural tourism and agro
processing. Refinance is provided by NABARD for both long term
investment credit as well as short term production credit for crop loans
and working capital for non-farm activities. A nationwide network of
28 regional offices at the state capitals, a sub-office at Port Blair and
391 district development offices are at hand to cater to this awesome
task.

Clearly NABARD's benevolent hand has been silently at work in

supporting rural resurgence in various ways and its stakes are quite
enormous. A glance at the figures will give a fair idea. It has
channelised a whopping Rs. 1,21,000 crore under its investment credit
programme and RIDF since inception, which includes Rs. 8795 crore
disbursed during 2006-07. Under production credit the Bank
sanctioned limits of Rs. 12570 crore during 2006-07.

NABARD has effectively brought in a number of innovations in the

rural credit domains. To quote a few: Formation and Linkage of Self
Help Groups, Farmers Clubs, Rural Infrastructure Development Fund,
Watershed Development, Kisan Credit Card, District Rural Industries
Project, Cluster Development Programme and Rural Innovation Fund.

Self Help Groups (SHGs)

Farmers Clubs

Rural Infrastructure Development Fund (RIDF)

Watershed Development

Tribal Development and WADI approach

Women and Development

District Rural Industries Project (DRIP)

Rural Entrepreneurship Development Programme (REDP)

Rural Marketing

Revival of Short-Term Rural Co-operative Structure (STCCS)

Rural Innovation Fund

NABARD Consultancy Services (NABCONS)

Co-Financing

Self Help Groups (SHGs):

One of the major success stories of NABARD, the SHG Bank linkage
programme started as a pilot project in 1992 with 500 SHGs. SHGs
comprise homogeneous groups of poor people who have voluntarily
come together mainly with the idea of overcoming their common
problems of low social and economic status. SHGs enable the poor,
especially the women from the poor households, to collectively
identify, prioritize and tackle the problems they face in their socio
economic environment. By pooling their meager resources and using
them for lending among themselves, they develop the habit of thrift
and the skill of credit appraisal, before getting mature enough to access
a loan from banks, which is called credit linkage. Starting with small
loans for consumption they soon graduate to bigger loans for setting
up of income generating micro-enterprises. Today, NABARD's SHG
Bank Linkage Programme boasts of over 26 lakh SHGs and 3.9 crore
households influencing the lives of over 16 crore poor population.
During the year 2006-07 alone, as many as 458591 groups were credit
linked.

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Farmers Clubs

A popular intervention among both farmers and Bankers, the farmers

Club concept was envisaged as an experiment in social engineering, a
forum to bring the rural banker and the borrower closer and to
propagate the principles of development through credit. Farmers Club
is an informal group of 15-20 farmers, one per village, which acts as a
medium for accessing and disseminating awareness of modern
methods of farming and technological advancements in agriculture in
its area. Financial support is provided by NABARD for opening and
maintenance of Clubs as well as for organizing training programmes in
the respective villages. With corporates and food chains looking for
supply chain linkages of farm produce, Farmers Clubs may have an
important role to play in joint production and marketing of farm
produce. As on 31 March 2007 , there were Farmers Clubs in 534
districts covering 48763 villages.

Rural Infrastructure Development Fund (RIDF):

Deficient Rural infrastructure hinders both social and economic

development. Economists have explicitly emphasized on the direct
correlation between the index of infrastructure development and rural
development. NABARD's support to State Governments through
RIDF since 1995-96 has brought about a sea change in the shape of
upgraded infrastructure in rural areas. Rural roads and bridges under
RIDF have improved market access to farmers; check dams and
irrigation structures have augmented their water resources. Even
drinking water projects and health centres have been supported under
the Fund. NABARD so far has sanctioned Rs. 61539 crore for
2,44,025 projects under the Fund. A cumulative position of sector-wise
sanctions as on 31 st March 2007 : Irrigation: Rs. 20637 crore, Rural
connectivity: Rs. 26935 crore for rural road network and bridges,
Power: Rs. 1434 crore Social Sector: Rs. 6988 crore Others: Rs. 5547
crore. A separate window has been created for rural connectivity with
villages of population less than 500, with a corpus of Rs. 4,000 crore
to support the Bharat Nirman project.

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Watershed Development:

In a comprehensive effort to enhance productivity of dryland through

conserving soil, rainwater and irrigation, NABARD embarked on
perfecting its experiments in creating a sustainable cost effective
solution to the water harvesting techniques in rural areas. Building on
its experience with the KFW funded watershed development
programme in Maharashtra , NABARD established a Watershed
Development Fund with an initial corpus of Rs. 200 crore in 1999-
2000 which now stands at Rs. 602.76 crore. The programme is now
being replicated in 124 districts of 14 States.

Tribal Development and WADI approach :

With over 8% of the population comprising tribals largely dependent

on forests, livestock and agriculture, NABARD found a holistic
approach by addressing production, processing and marketing of the
produce with WADI as the core of the programme. WADI (small
orchard) was found to be an effective tool for arresting migration of
tribals from their native habitat. The WADI model evolved out of
concerted efforts made in association with Bhartiya Agro Industries
Foundation (BAIF). The project also envisages other development
interventions like environment, gender and health. Having completed
10 years in Gujarat and 5 years in Maharashtra , the programme has
touched 275111 families in 410 villages.

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Women and Development

Women constitute one third of the labour force. In order to give focus
to women in various development activities and increase their access
to Bank credit, schemes like Assistance to Rural women in Non-farm
Development (ARWIND), Assistance for Marketing of Non- Farm
Products of Rural Women (MAHIMA), Development of Women
through Area Programme (DEWTA) have been designed to provide
exclusive support to women in rural areas.

District Rural Industries Project (DRIP):

NABARD launched DRIP, an integrated area-based credit

intensification programme, in collaboration with Government, banks
and other development agencies with district specific focus. It was
introduced in 1993-94 with the objective of creating sustainable
employment opportunities in 106 districts all over the country.

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Rural Entrepreneurship Development Programme (REDP):

In order to generate employment in rural areas, it was felt necessary to

develop the entrepreneurial skills of the rural youth. REDP is a
promotional programme supported by NABARD to motivate and train
educated unemployed rural youth, to set up their own enterprises. So
far, 2.32 lakh persons have been trained under the programme under
7792 REDPs.

Rural Marketing:

A number of marketing interventions have been made for marketing of

rural non-farm products since marketing is a key factor in the
sustainability of any such endeavour. With the financial support of
NABARD under its promotional programmes like Rural Haats, Rural
Marts, participation in fairs, exhibitions and marketing melas, rural
artisans and entrepreneurs can get a larger market for their produce
and showcase their talent to urban and upcountry markets.

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Revival of Short-Term Rural Co-operative Structure (STCCS)

NABARD is the implementing agency for the Revival package for the
STCCS which mean the State Coop. Banks, District Coop. Banks and
the Primary Agricultural Coop. Societies. (PACS). The revival
package has been approved by the Govt. of India based on the
recommendations of the Vaidyanathan Committee. NABARD has had
dialogues with State Govts. and so far 10 states have executed MOU
with GoI and NABARD. Apart from being on the national, state and
district level implementing committees, NABARD has designed
guidelines and training manuals for the special audit of PACS under
the Package.

Rural Innovation Fund:

In association with Swiss Agency for Development and Cooperation

(SDC), NABARD has constituted the “NABARD SDC Rural
Innovation Fund (RIF)” to support innovative projects in Farm, Non-
Farm and Micro-Finance Sectors leading to creation of livelihood
 opportunities for the poor. Government and Non-Government
Institutions, corporate bodies, financial institutions and individuals can
avail funding support for activities involved in development of new
products, processes, prototypes, technology etc. which have the poor
in their focus.

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NABARD Consultancy Services (NABCONS)

NABCONS is a wholly owned subsidiary of NABARD, which has

established itself as a dependable and professional consultancy
services provider in agriculture and allied activities. As on 31 March
2007 , it has cumulatively contracted 487 national and international

sion services. Major Activities

• Preparing of Potential Linked Credit Plans for identification of exploitable potentials
under agriculture and other activities available for development through bank credit. •
Refinancing banks for extending loans for investment and production purpose in rural
areas. • Providing loans to State Government/Non Government Organizations
(NGOs)/Panchayati Raj Institutions (PRIs) for developing rural infrastructure. •
Supporting credit innovations of Non Government Organizations (NGOs) and other non-
formal agencies. • Extending formal banking services to the unreached rural poor by
evolving a supplementary credit delivery strategy in a cost effective manner by
promoting Self Help Groups (SHGs) • Promoting participatory watershed development
for enhancing productivity and profitability of rainfed agriculture in a sustainable
manner. • On-site inspection of cooperative banks and Regional Rural Banks (RRBs)
and iff-site surveillance over health of cooperatives andRRBs.
Departments

• Accounts Department

• Central Vigilance Cell

• Corporate Planning Department

• Department for Cooperative Revival and Reforms (DCRR)

• Department of Economic Analysis & Research

• Department of Information Technology

• Department of Supervision

• Development Policy Department-Farm Sector

• Development Policy Department-Non-Farm Sector

• Finance Department

• Financial Inclusion Department

• General Administration Department

o Protocol & Security Section

• Human Resource Development Department

• Human Resource Management Department

• Inspection Department

• Institutional Development Department

• Investment Credit Department

• Law Department

• Micro Credit Innovation Department

• Premises Department

• Production Credit Department

• Rajbhasha Prabhag

• Secretary's Department

Public Relations Division

• State Projects Department

• Technical Services Department

• C.S.I.D.
Uttarakhand Regional Economic Development (RED)
Prgramme: A joint venture of GTZ & NABARD

1. What is RED programme?

RED is a joint venture of GTZ & NABARD for the

economic development of Uttarakhand state through
development of certain pre selected value chains in
agro based sectors, improvement in business and
investment opportunities for the private sector and
promotion of rural MSMEs in the state in Specific
Agro–Based Industries.

2. Which sectors are eligible for support under the

RED programme ?

Seven sectors viz.

 Medicinal and Aromatic plants (MAP)

 Spices
 Vegetables
 Pulses
 Dairy
 Traditional/Non-traditional fibers
 Agro Processing

3. What will be the form of assistance under the RED

programme?

Grant assistance in the form of

 seed capital for start-up ventures, or

 “Margin money” for existing business to enable them
to access bank loans.

 Grant to be used to create or acquire infrastructure,

technical or managerial know-how, inputs like seeds or
 implements, aggregation or processing of farm produce
by value chain intermediaries.

4. To what extent the support will be granted?

 GTZ grant to be based on merit, to the extent of

30 to 40 percent of project outlay with maximum
limit of Rs. 8.00 lakh per project.
 The selected MSME to arrange the remaining 60
to 70 percent (as the case may be) from either
own resources or from bank as loan. (Including
NABARD’s support from its own promotional
programmes as grant/soft loan/venture capital
assistance).
 NABARD support subject to norms / guidelines
under different programmes and policies
 Agency’s involvement to be 10 to 20% of the
project outlay.

5. Which type of projects will be supported under RED

programme?

 Micro/small/medium investment projects

targeting to develop or improve agro-based value
chains in the selected sub-sectors.
 Minimum outlay Rs. 5.00 lakh.

6. Who is eligible to apply?

The project holder could be

 Producer Company,
 Producer cooperative/ federation,
 Joint Liability Groups,
 Not for profit companies registered under section
25 of Indian Companies Act
 Civil Society Organization’s enterprise
  Societies registered under Soc. Registration Act
1860
 Trusts registered under Indian Trusts Act 1880

7. How to apply?
Approach the District Development Manager (DDM) of
NABARD in the district or the Regional Office of
NABARD at State Capital, Dehradun. For detail of
address of the Regional Office, please see relevant
section of the NABARD web-site. The proposals can
also be directly emailed to NABARD RO, Dehradun
(dehradun@nabard.org or
nfs.dehradun@rediffmail.com).

8. What is the application format?

In view of the fact that there will be different types of

proposals expected to be received, no format has been
prescribed. The Institutions eligible to avail assistance
under the RED programme may submit their proposals
containing adequate information / data as indicated in
question 12 below about the competence of the
proposer to implement the project, how the project
will impact the life of the target population etc.
The project should have positive economic impact on
the rural masses; it should be implement able and
replicable in a reasonable time frame of , say 1 to 3
years.

9.What is the prima facie competence of the proposer

to apply under RED programme?
NGO’s/CBO’s Peoples Based Organizations should be
duly registered under relevant Acts, have a minimum
of 3 years’ audited A/cs, should have a good track
record and relevant experience in the field. They
should not have been blacklisted by GoI /State Govt/
other Donor / Financing Agencies and should not have
political affiliations and their activities should not
discriminate on the basis of caste, creed or religion.

10. What will be the general procedure followed by

NABARD in dealing with the proposals?

On receipt of the proposals, NABARD (Office of DDM /

Regional Office/Head Office) will issue an
acknowledgment of the receipt of the proposal.
Within a month, further information’s/details if any
required for processing will be called for.
In case the proposal is sanctioned, the proposer will
be informed of the sanction of the proposal and the
terms and conditions of sanction.

Further details of implementation, monitoring and

review will be contained in the terms and conditions
of sanction. In case of rejection, the reasons for
rejection will be intimated to the proposer.

In the sanction letter the monitoring process and

indicators will be stipulated, in relation to the specific
nature of the proposal.

11. Who would be the Implementing Agency?

The Agency submitting the proposal will have to
implement the proposal.

12. Check-list for submitting proposals for assistance

from RED

The proposals received will be subjected to scrutiny

by the Regional Office of NABARD. The Regional Office
will verify whether information on the following is
available in the proposal or not (the list is illustrative
and not exhaustive). Therefore, the proposer should
ensure that information together with supporting
documents, wherever deemed necessary, is furnished
to avoid repeated correspondence.

The following is the checklist:

Details of the Initiator of the Proposal
• Name of the Agency/individual
• Address
• Past experience if any (Specific details on
types of projects undertaken, support
received from NABARD or any other
Institution/ Body/ authority.)
• Financial stake in the proposal; to what
extent? Item wise financial details,
contribution of the proposer, other partners/
stakeholders, their role and contribution, if
any
• Whether the Proposer’s role is limited to
conceptualization of the idea only or is it up
to implementation stage
• Track Record: What has been the record in
initiating similar project(s) / ideas in the
past?
• The audited balance sheet of the agency,
registration details if any, copy of bye-
laws/Memorandum & Article of Association
as the case may be, may be submitted

About the project/ proposal

The project proposal should contain

• Details of the proposed project/purpose and

expected outcome
• Financial costs (component wise)
• Cost benefit analysis (including social cost
benefit) wherever necessary
• Profitability/break even wherever necessary
For any further information contact:

NABARD, Dehradun Regional Office,

113/2 Hotel Sunrise Building,

Rajpur Road,

Dehradun.

Tel. No.- 0135-6601092

Email – nfsdehradun@rediffmail.com
NABARD is an apex institution, accredited with all matters concerning policy, planning and
operations in the field of credit for agriculture and other economic activities in rural areas in India.

The Committee to Review Arrangements for Institutional Credit for Agriculture and Rural
Development (CRAFICARD), set up by the Reserve Bank of India (RBI) under the Chairmanship of
Shri B. Sivaraman, conceived and recommended the establishment of the National Bank for
Agriculture and Rural Development (NABARD). The Indian Parliament through the Act 61 of 1981,
approved the setting up of NABARD. The Bank which came into existence on 12 July, 1982, was
dedicated to the service of the Nation by the Hon’ble Prime Minister, Smt Indira Gandhi on 5
November, 1982.

NABARD is established as a development Bank, in terms of the Preamble of the Act, "for providing
and regulating Credit and other facilities for the promotion and development of agriculture, small
scale industries, cottage and village industries, handicrafts and other rural crafts and other allied
economic activities in rural areas with a view to promoting integrated rural development and securing
prosperity of rural areas and for matters connected therewith or incidental thereto."

NABARD took over the functions of the erstwhile Agricultural Credit Department (ACD) and Rural
Planning and Credit Cell (RPCC) of RBI and Agricultural Refinance and Development Corporation
(ARDC). Its subscribed and paid-up Capital was Rs.100 crore which was enhanced to Rs. 500 crore,
contributed by the Government Of India (GOI) and RBI in equal proportions. Currently it is Rs. 2000
crore, contibuted by GoI (Rs.550 crore) and RBI (Rs.1450 crore).

NABARD: (i) serves as an apex financing agency for the institutions providing investment and
production credit for promoting the various developmental activities in rural areas; (ii) takes measures
towards institution building for improving absorptive capacity of the credit delivery system, including
monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, training of
personnel, etc. ; (iii) co-ordinates the rural financing activities of all institutions engaged in
developmental work at the field level and maintains liaison with Government of India, State
Governments, Reserve Bank of India (RBI) and other national level institutions concerned with policy
formulation; and (iv) undertakes monitoring and evaluation of projects refinanced by it.

NABARD’s refinance is available to State Co-operative Agriculture and Rural Development Banks
(SCARDBs), State Co-operative Banks (SCBs), Regional Rural Banks (RRBs), Commercial Banks
(CBs) and other financial institutions approved by RBI. While the ultimate beneficiaries of investment
credit can be
NABARD is an apex institution, accredited with all matters concerning policy, planning and
operations in the field of credit for agriculture and other economic activities in rural areas in India.

The Committee to Review Arrangements for Institutional Credit for Agriculture and Rural
Development (CRAFICARD), set up by the Reserve Bank of India (RBI) under the Chairmanship of
Shri B. Sivaraman, conceived and recommended the establishment of the National Bank for
Agriculture and Rural Development (NABARD). The Indian Parliament through the Act 61 of 1981,
approved the setting up of NABARD. The Bank which came into existence on 12 July, 1982, was
dedicated to the service of the Nation by the Hon’ble Prime Minister, Smt Indira Gandhi on 5
November, 1982.

NABARD is established as a development Bank, in terms of the Preamble of the Act, "for providing
and regulating Credit and other facilities for the promotion and development of agriculture, small
scale industries, cottage and village industries, handicrafts and other rural crafts and other allied
economic activities in rural areas with a view to promoting integrated rural development and securing
prosperity of rural areas and for matters connected therewith or incidental thereto."

NABARD took over the functions of the erstwhile Agricultural Credit Department (ACD) and Rural
Planning and Credit Cell (RPCC) of RBI and Agricultural Refinance and Development Corporation
(ARDC). Its subscribed and paid-up Capital was Rs.100 crore which was enhanced to Rs. 500 crore,
contributed by the Government Of India (GOI) and RBI in equal proportions. Currently it is Rs. 2000
crore, contibuted by GoI (Rs.550 crore) and RBI (Rs.1450 crore).

NABARD: (i) serves as an apex financing agency for the institutions providing investment and
production credit for promoting the various developmental activities in rural areas; (ii) takes measures
towards institution building for improving absorptive capacity of the credit delivery system, including
monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, training of
personnel, etc. ; (iii) co-ordinates the rural financing activities of all institutions engaged in
developmental work at the field level and maintains liaison with Government of India, State
Governments, Reserve Bank of India (RBI) and other national level institutions concerned with policy
formulation; and (iv) undertakes monitoring and evaluation of projects refinanced by it.

NABARD’s refinance is available to State Co-operative Agriculture and Rural Development Banks
(SCARDBs), State Co-operative Banks (SCBs), Regional Rural Banks (RRBs), Commercial Banks
(CBs) and other financial institutions approved by RBI. While the ultimate beneficiaries of investment
credit can be

Kisan Credit Card

Genesis • Honorable Union Finance Minister announced in his budget speech for
1998-99 that NABARD would formulate a Model scheme for issue of Kisan Credit Cards
to farmers, on the basis of their land holdings, for uniform adoption by banks, so that the
farmers may use them to readily purchase agricultural inputs such as seeds, fertilisers,
pesticides, etc. and also draw cash for their production needs'. • NABARD formulated a
Model Kisan Credit Card Scheme in consultation with major banks. • Model Scheme
circulated by RBI to commercial banks and by NABARD to Cooperative. • Banks and
RRBs in August 1998, with instructions to introduce the same in their respective area of
operation. Objectives As a pioneering credit delivery innovation, Kisan Credit Card
Scheme aims at provision of adequate and timely support from the banking system to the
farmers for their cultivation needs including purchase of inputs in a flexible and cost
effective manner. Contents of Credit Card • Beneficiaries covered under the
Scheme are issued with a credit card and a pass book or a credit card cum pass book
incorporating the name, address, particulars of land holding, borrowing limit, validity
period, a passport size photograph of holder etc., which may serve both as an identity
card and facilitate recording of transactions on an ongoing basis. • Borrower is required
to produce the card cum pass book whenever he/she operates the account. Salient
features of the Kisan Credit Card (KCC) Scheme

• Eligible farmers to be provided with a Kisan Credit Card and a pass book or card-
cum-pass book.

• Revolving cash credit facility involving any number of drawals and repayments
within the limit.

• Limit to be fixed on the basis of operational land holding, cropping pattern and
scale of finance.

• Entire production credit needs for full year plus ancillary activities related to crop
production to be considered while fixing limit.

• Sub-limits may be fixed at the discretion of banks.

• Card valid for 3 years subject to annual review. As incentive for good
performance, credit limits could be enhanced to take care of increase in costs,
change in cropping pattern, etc.

• Each drawal to be repaid within a maximum period of 12 months.

• Conversion/reschedulement of loans also permissible in case of damage to crops

due to natural calamities.

• Security, margin, rate of interest, etc. as per RBI norms.

• Operations may be through issuing branch (and also PACS in the case of
Cooperative Banks) through other designated branches at the discretion of bank.

• Withdrawals through slips/cheques accompanied by card and passbook.

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Advantages of the Kisan Credit Card Scheme

• Advantages to farmers

• Access to adequate and timely credit to farmers

• Full year's credit requirement of the borrower taken care of.

• Minimum paper work and simplification of documentation for drawal of funds

from the bank.

• Flexibility to draw cash and buy inputs.

• Assured availability of credit at any time enabling reduced interest burden for the
farmer.

• Sanction of the facility for 3 years subject to annual review and satisfactory
operations and provision for enhancement.

• Flexibility of drawals from a branch other than the issuing branch at the discretion
of the bank.

Benefits of the Scheme to the Banks

• Reduction in work load for branch staff by avoidance of repeat appraisal and
processing of loan papers under Kisan Credit Card Scheme.

• Minimum paper work and simplification of documentation for drawal of funds

from the bank.

• Improvement in recycling of funds and better recovery of loans.

• Reduction in transaction cost to the banks.

• Better Banker - Client relationships.

Refinance Support for ST(SAO) Loans disbursed under KCC Scheme - Operational
guidelines

SCBs/DCCBs and RRBs were advised operational guidelines governing provision of

refinance for their ST(SAO) disbursements under the KCC Scheme vide Circular letter
No. NB.PCD(OPR)/662/A137(Spl.)/99-2000 dt.26.05.99 and Circular letter No.
NB.PCD(OPR)/662-A/A137(Spl.)/99-2000 dt. 26.05.99 respectively.

The same are summarised below:

• Instructions on computation of Demand, Collection and Balance (DCB) position,

maintenance of Non-overdue Cover (NODC), financing of small/marginal
farmers, etc, conveyed in circular letter No.NB.PCD(OPR)/5980/A.135/90-91
dated 17 December 1990 addressed to RCS and in circular letter
No.NB.PCD(OPR)/1271/ 334/95-96 dated 02 November 1995 addressed to RRBs
will also be, mutatis mutandis, applicable for advances made under the KCC
Scheme by SCBs/DCCBs and RRBs respectively. although under the KCC
Scheme, production credit for SAO, advances for allied activities, non-farm
activities and consumption purposes can be covered, only the production credit
for SAO is eligible for refinance from NABARD under the ST(SAO) credit
limits. banks required to maintain separate details of sanctions and accounts for
operations on credit limits for SAO purposes under the KCC Scheme to facilitate
submission of drawal applications for obtaining refinance from NABARD in
respect of eligible loans and reporting such loans in the monthly NODC
statements for ST(SAO) loans and advances. short-term loans outstanding for
financing ancillary activities relating to crop production such as maintenance of
agricultural machinery/implements, electricity charges, etc. under the KCC
Scheme also eligible for refinance from NABARD under ST(SAO) credit limits.
• Applicable to Cooperatives only
Seasonality discipline: In view of flexibility and discretion provided to the
farmers in both drawals and repayments, it has been decided not to insist, for the
present, on compliance with the seasonality discipline in respect of KCC accounts
for the purpose of allowing drawals on the ST(SAO) credit limits.
• Financing of Small Farmers(SF)/Marginal Farmers(MF) : For compliance on
financing of SF/MF, maximum outstanding under production credit for SAO
reached in KCC accounts of such farmers during the year(April-March) would be
reckoned as loans issued to SF/MF. Thus, for compliance in regard to coverage of
SF/MF, the aggregate of maximum outstanding in KCC accounts of SF/MF as
well as normal cash credit accounts together with the aggregate of crop loans
issued to SF/MF under the normal loaning system, worked out as percentage to
the maximum outstanding reached under all KCC (including normal Cash Credit)
accounts and the total ST(SAO) loans issued during the year (April-March) will
be reckoned.
• Applicable to Both Cooperatives and RRBs
Computation of Demand, Collection and Balance (DCB) position : Maximum
outstandings under ST(SAO) loans in KCC accounts reached during the year
(July-June) be treated as demand, and outstandings in unrenewed KCC accounts
may be reckoned as overdues. Percentage of overdues to demand calculated
accordingly.

• Maintenance of Non Overdue Cover(NODC) : Outstanding in KCC accounts

against PACS/Branches for financing SAO excluding amount outstanding under
 unrenewed KCC accounts will be reckoned as NODC for purpose of borrowings
from NABARD. Thus, for purpose of working out the aggregate NODC for
borrowings from NABARD for SAO, non-overdue short-term agricultural loans
outstanding under normal loan accounts plus non-overdue outstanding under
normal cash credit accounts and those under KCC Scheme will constitute NODC.
Revised formats of NODC to be submitted by DCCBs/RRBs given as Annexure
to our circular letter No.NB.PCD (OPR)/662 & 662A/A.137(Spl)/ 1999-2000
dated 26 May 1999.

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Coverage of Crop Loans disbursed under KCC

Under the Reshtriya Krishi Bima Yojna (RKBY)

GIC has agreed that the crop loans disbursed for eligible crops under the Crop Insurance
Scheme will be covered under the CCIS, now under Rashtriya Krishi Bima Yojna.
However, the banks are expected to maintain all back up records relating to compliance
with "RKBY" and its seasonality discipline, cut-off date for submitting declarations and
end use, etc. as in the case of normal crop loans.

Objectives of the Scheme :

• To provide insurance coverage and financial support to the farmers in the event of
failure of crops as a result of natural calamities, pests and diseases.

• To encourage farmers to adopt progressive farming practices, high value inputs

and higher technology in agriculture.

• To help stabilise farm incomes, particularly in disaster years.

• To support and stimulate primarily production of food crops and oilseeds.

• Farmers to be covered : All farmers (both loanee and non-loanee irrespective of

their size of holdings) including sharecroppers, tenant farmers growing insurable
crops covered.

• Sum insured : The sum insured extends upto the value of threshold yield of the
crop, with an option to cover upto 150% of average yield of the crop on payment
of extra premium.

• Premium subsidy : 50% subsidy in premium allowed to Small and Marginal

Farmers, to be shared equally by the Government of India and State
 Government/Union Territory. Premium subsidy to be phased out over a period of
5 years.

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Budget 2001-02 announcement - Follow up :

• Hon'ble Union Finance Minister in his Budget Speech for the year 2001-02 set the
future agenda for the Scheme as under :

" The innovation of KCC is proved to be very successful. Since the year of its
introduction in 1998-99, almost 110 lakh KC cards have been issued. I am asking our
banks to accelerate this programme and cover all eligible agricultural farmers within the
next 3 years .

I am also asking the banks to provide a personal insurance package to the KCC holders as
is often done with other credit cards to cover them against accidental death or permanent
disability, upto maximum amount of Rs.50,000/ and Rs.25,000/- respectively. The
premium burden will be shared by the card issuing institutions. "

Coverage of farmers - Future strategy

• Banks, vide our Circular letter No.NB.PCD(KCC)/29/ 2001-02 dated 10 April

2001, requested to draw up an action plan immediately in consultation with our
Regional Office concerned, based on their past performance and experience in
implementing the scheme, to ensure the coverage of all the eligible agricultural
farmers under the KCC Scheme within the next three years i.e. by 31 March 2004.
• Banks to ensure that targets fixed for 2001-02, 2002-03 and 2003-04 include new
agricultural farmers likely to become eligible for their KC cards after 31 March
2001 also.
• Targets fixed for issue of KC Cards be disaggregated month-wise and
branch/PACS-wise to facilitate close monitoring of progress vis-a-vis target and
also advised to RO concerned.
• In order to ensure achievement of the targets so fixed, banks requested to follow
strategies suggested by NABARD from time to time. Towards this end, banks to
launch a campaign approach to accelerate pace of implementation of the Scheme.
Following specific steps may be taken by the banks :
• Conduct of Sensitisation/training programmes for the officers of controlling
offices of banks, branch managers and field level functionaries as also district
level functions for distribution of cards.
• Holding Banker-Farmers' Meets, as part of the Kharif 2001 campaign, in each
block to identify the ground level constraints in the smooth implementation of the
Scheme and to initiate remedial measures therefor.
• Use of VVV Clubs fora for propagation of the scheme.
 • Placement of hoardings/banners etc. at prominent places, such as branch
premises, Panchayat buildings, Mandis, etc.
• Use of audio-video media, bringing out KCC literature in local language to create
better awareness about KCC Scheme among farmers.
• Issue of plastic/laminated cards to serve as Identity Cards.
• Monitoring of progress in implementation of the Scheme in Board meetings as
also through various state/ district and block level fora with the participation of
Government functionaries, bankers, farmers etc.

Personal Accident Insurance Scheme -Salient features :

• Designated insurance company will nominate one office at district level to

function as nodal office for co-ordinating implementation of personal accident
insurance scheme for KCC holders in the district.

• Nominated office of insurance company to issue a Master Insurance Policy to

each DCCB/RRB covering all its KCC holders.

• Premium payable Rs.15/- for a one year policy while Rs.45/- for a 3-year policy.

• Insurance coverage available under Policy only from date of receipt of premium
at insurance company

• Banks to ensure to incorporate name of Nominee in Kisan Credit Card-cum-Pass

Book.

• Simplified claim settlement procedure evolved under Scheme whereby an

Enquiry-cum-Verification Committee comprising Branch Manager of
implementing bank, Lead Bank Officer and representative of insurance company
to certify nature of accident causing disability/death and recommend settlement of
insurance claims.

• Scheme covers risk of KCC holders against death or permanent disability

resulting from accidents caused by external, violent and visible means, as under:

• Death due to accident (within 12 months of the accident)

caused by outward, violent and visible means -- Rs.50,000/-
Permanent total disability -- Rs.50,000/-
Loss of two limbs or two eyes or one limb and one eye -- Rs.50,000/-
Loss of one limb or one eye -- Rs.25,000/-
Major Steps taken by NABARD:

• A Brochure on KCC Scheme highlighting the salient features, advantages and

other relevant information about the Scheme was brought out by Head Office and
ROs were asked to circulate the brochure to State govt. departments, Commercial
Banks, Cooperative Banks, RRBs and other concerned agencies/officers so as to
generate wider awareness about the Scheme.

• Floor limit of Rs.5000/- for issue of KC Cards stands withdrawn.

• Studies on KCC Scheme have been entrusted to BIRD and NABARD Staff
College to facilitate feed back on the ground level issues/problems so that
changes, where necessary, could be considered.

• Studies on the implementation of the Scheme undertaken by NABARD

periodically.

• On the lines of instructions of RBI to Commercial Banks, Cooperative Banks and

RRBs have been advised that they may, at their discretion, pay interest at a rate
based on their perception and other relevant factors on the minimum credit
balances in the cash credit accounts under the Kisan Credit Cards of farmers
during the period from 10th to the last day of each calendar month.

• Regional Rural Banks (RRBs) were advised to initiate innovative publicity

campaign in each area of operation in order to cater all eligible farmers under
KCC.

Progress in implementation of the Scheme

• Since launching in August 1998, around 2.38 crore Kisan Credit Cards issued
upto 31 March 2002 by Cooperative Banks, Regional Rural Banks and
Commercial Banks put together.

• Scheme implemented in all States and Union Territories (except Chandigarh,

Daman & Diu and Dadra & Nagar Haveli) with all Cooperative Banks, RRBs and
Commercial Banks participating.
• Agency-wise/State-wise progress in issue of cards by all banks during 2001-02
and since inception of Scheme.
Special Projects
• Maharashtra Rural Credit Project

The project was under implementation since January 1994 and covers 1483 villages in
twelve districts of Maharashtra. The primary objective is poverty alleviation through
increased access to bank credit for the rural poor. It envisages formation and promotion
of Self Help Groups through NGOs. The project has been completed. As against a target
of promoting 2600 SHGs, 9000 groups have been promoted, of which 7027 groups have
been credit linked with banks. MRCP has provided a window of opportunities,
particularly to the poor rural women to enhance their skill and secure credit for income
generating activities. The project has helped in empowerment of rural women in addition
to providing access to bank credit.

• Adivasi Development programme in Gujarat

The programme has been under implementation with grant support from KfW, Germany,
since 1994-95 in Dharampur Taluka of Valsad district through BAIF Development
Research Foundation, Pune. The focus is on development of wadi (small orchard) while
other supportive interventions viz, water resource development, agriculture development,
women development, health and sanitation are also addressed. Small and marginal
farmers, including women, are selected under the programme. The landless are supported
by providing them micro-enterprises in farm and non-farm sectors and employment
opportunities in processing units. The establishment of village level people's
organisations (POs) called Village Ayojan Samitis (VAS) have been the strongest tool
and nuclei for planning and implementation of the programme. The programme has been
a great success in converting 5,140 ha wastelands into orchards of cashew, mango and
forestry plants by 13,663 adivasi families from 162 villages.

• Adivasi Development Programme in Tribal Areas of Maharashtra

The successful implementation of Wadi model in Gujarat is being replicated in

Maharashtra (Nasik and Thane districts) with grant support from KfW, Germany through
Maharashtra Institute of Technology Transfer for Rural Areas (MITTRA), Nasik, an
NGO promoted by BAIF, Pune. The programme with a project period of ten years (2000-
2010), aims to support 15,000 tribal families by developing wadis on their marginally
productive lands. The project which was launched in September, 2000 has covered an
area of 2076 ha under wadis belonging to 5676 families from the 160 villages and has
been instrumental in bringing about an overall improvement in the quality of life of the
families in the project area.

• Transfer of Technologies for Sustainable Development

The project assisted by CEC is under implementation since 1996-97 through BAIF, Pune.
It aims at achieving sustainable development of selected small and marginal farmers and
landless families by promoting income generating activities and by adopting simple but
appropriate technologies. The major activities are orchard development, livestock
development, sericulture, watershed, Jana Utthan (basket of activities), health &
sanitation and other suitable off-farm activities. The programme covers 217 villages of 11
districts spread over 5 States of Gujarat, Karnataka, Maharashtra, Rajasthan and Uttar
Pradesh. The programme has led to drudgery reduction , improvement in the standard of
living, better health and hygiene and confidence building of the assisted families

Development and Promotional Functions

Swarojgar Credit Card

Overview

Swarojgar Credit Card Scheme (SCC Scheme) was introduced in September 2003
consequent upon the announcement made by Honorable Prime Minister in his
Independent Day Speech on 15 August 2003.

Objective

• SCC Scheme aims at providing adequate and timely credit ie. working capital or
block capital or both to small artisans, handloom weavers, service sector,
fishermen, self employed persons, rickshaw owners, other micro-entrepreneures,
SHGs, etc from the banking system in a flexible, hassle free and cost effective
manner.

• Borrowers in urban areas can be covered under SCC Scheme. Small business
covered under priority sector is also eligible under SCC Scheme.

• Any scheme/project that are income generating/ employment generating may be

 covered under the scheme. The facility may also include a reasonable component
for consumption needs.

• Farm sector activities like fisheries, dairy, etc. can also be covered under the
scheme. Generally such of the self-employment activities which have regular turn
over/income stream on short-interval basis can be covered under SCC scheme.

SCC is a credit delivery mode and not a purpose. Coverage of SCC will not make a unit
ineligible for subsidy. Banks can issue SCCs to target borrowers of SCC scheme for
disbursing credit under any schemes whether they are covered under subsidy or not.

Credit Card

• SCC to SHGs

• Nature of financial accommodation

• Quantum of limit

• Renewal of SCC limits

• Interest on credit balance

• Validity

• Issue of cards

• Operation of the scheme

• Insurance

• Security/Margin/Rate of interest /Prudential norms

• NABARD refinance

• Monitoring

• Promotional Support from NABARD

SCC to SHGs

Self Help Groups (SHGs) can also be issued SCC and members will be liable jointly and
severally for repayment. As the Groups mature, some members may graduate to
entrepreneurs and start their own micro- enterprises with or without the support of the
SHGs. In such cases, SCC may be issued to members in individual capacity.
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Nature of financial accommodation

The credit facility extended under the Scheme is in the nature of a composite loan
including term loan / cash credit or both.

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Quantum of limit

Upto Rs. 25,000/ per borrower as composite loan. This is indicative. Banks may consider
higher limits on the merits of the case. A component for consumption credit could be
built in keeping in view the value of the family labour in the productive activity. The total
limit would have a relationship with the projected net earning and the repayment capacity
of the borrower.

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Renewal of SCC limits

Limits will be renewed annually based on the amount credited to the cash credit
account /repayments.

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Interest on credit balance

Interest as applicable to SB A/c may be paid to the borrowers on the credit balance under
the account.

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Validity

SCC is normally valid for 5 years subject to satisfactory operation of the account and
renewed on a yearly basis through simple review process.

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Issue of cards

The beneficiaries under the scheme will be issued with a laminated credit card and a pass
book. This will serve as an identity card and facilitate recording of the transactions on an
ongoing basis. Banks may modify the format keeping in view the relevant data/
information required. A passport size photograph of the holder will be affixed on the card
at the space provided for .The card holder would be required to produce the card and the
pass book for operations in the account.
As far as possible cluster approach may be followed in implementing the scheme.
In case smart cards are issued, fees towards issue of card/processing may not exceed Rs
50/- per card.

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Operation of the scheme

The banks may at their discretion permit operations through the designated branches,
taking into account the convenience of the clientele.
Opening of SB A/c should not be a precondition for issue of SCC.

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Insurance

Beneficiaries under the scheme would automatically be covered under the group
insurance scheme and the premium would be shared by the bank and the borrower
equally. Each bank may negotiate the terms of insurance with a company of its choice on
a national or regional basis. Further, as advised by General Insurers’ (Public Sector)
Association of India (GIPSA), it would be advisable for the banks to take up the matter of
Personal Accident Insurance linked with SCC scheme individually with the Insurance
Companies. Since many banks have tie-ups for bancassurance agreement with General
Insurance Companies they may decide to include SCC scheme also under their tie-ups.

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Security/Margin/Rate of interest /Prudential norms

Security, Margin, Rate of interest and Prudential norms are applicable as per
RBI/NABARD norms. The interest rate would not exceed that for comparable farm
loans. However banks may follow RBI instructions in this regard. Interest linked
incentives may be given for timely repayment. Women borrowers may be given
preference. Joint liability groups could be encouraged as a collateral substitute.
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NABARD refinance

NABARD refinance will be provided for advances under SCC Scheme to eligible banks
against their lendings to the borrowers in rural areas as per norms under the Enterprise
Loan Scheme.

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Monitoring
NABARD has been nominated by Govt. of India as the nodal agency for monitoring the
scheme. Banks are required to report monthly progress to concerned Regional Offices of
NABARD to facilitates monitoring.

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Promotional Support from NABARD

NABARD has introduced a pilot scheme for supporting a total of 90 select RRBs and
Cooperative Banks in their efforts to promote SCC scheme. The objective is to generate
greater awareness about the scheme and cover maximum number of borrowers, educate
the cardholders to use the cash credit facility optimally and effectively, and improve
credit flow at ground level. The pilot scheme would facilitate the identified banks to issue
more SCCs and would be in operation upto 31 March 2007. The identified banks
(RRBs/SCBs/SCARDBs) would be reimbursed the expenditure incurred on publicity of
SCC scheme on a cost sharing basis of 60:40, subject to a maximum of Rs.1 lakh.

NABARD has published brochures on SCC scheme in English, Hindi and various
regional languages. Regional Offices of NABARD conduct familiarisation programmes
for bankers on the schem

Development and
Promotional Functions

Farmer's Club Programme

Farmer's Club Programme Overview

Agriculture is the backbone of the Indian Economy as nearly 60% of

the population of the country depends on agriculture and it contributes
18% to the GDP. Tenth Five Year Plan and National Agriculture
Policy documents envisage a growth level of 4% in Agriculture as
against the average growth of less than 2% in the last 50 years. The
last decade commencing from 1990s was marked by post-Green
Revolution fatigue and plateauing yield levels in many parts of the
country. For sustained 4% growth in agriculture there is need to
improve productivity and cut down on costs by improving efficiency.

There is, therefore, an urgent need to provide package of initiatives for

transfer of technology, improving input use efficiency, promoting
investments in agriculture both in private and in public sectors and
creating a favourable and enabling economic environment. The
emerging needs in agriculture sector now are adoption of location
specific skill and knowledge based technologies, promote greater
value addition to agriculture produce, forge new partnerships between
public institutions, technology users and the corporate sector, harness
IT more effectively to realise financial sustainability and compete in
the international market.

For transmitting the latest agriculture techniques to the Farmers’ field,

orienting them to establish better relationship with banks, adoption of
latest post-harvest handling technology, value addition, etc. and enjoy
the benefits of collective bargaining power both for procuring inputs
and select their produce the Farmers’ Club Programme is an
appropriate and most suitable strategy initiated by NABARD in late
1982.

Mission

Development in rural areas through credit, technology transfer,

awareness and capacity building.

What is Farmers' Club Programme

National Bank for Agriculture and Rural Development (NABARD)

encourages banks to promote Farmers' Clubs in rural areas under the
Farmers’ Club Programme, earlier known as “Vikas Volunteer Vahini
(VVV) Programme”. The Programme was launched by NABARD in
November 1982 to propagate the five principles of “Development
through Credit”.
in a village/ cluster of villages, generally in the Operational Area of a
Bank. While Farmers’ Club should have minimum of 10 members, no
upper limit in the membership is envisaged. Every Club would have
three office bearers - One 'Chief Coordinator/Volunteer/ President, the
other 'Associate Coordinator/Volunteer/Vice President. The office
bearers would be elected by Club Members on a democratic basis for a
term to be decided by the Club. The office bearers should be residents
of the area of the operation of the club. No NGO/FC promoting agency
representative can be office bearer of the club.

Functions of the Office bearers:

The main functions of the office bearers would be to convene

meetings, to arrange meetings with experts, maintenance of Books of
Accounts, coordination with Bank, Line Departments of the State
Governments, maintaining proper liaison with all concerned.

Membership

All villagers except willful defaulters can become members of the

club. The club must make endeavour to raise their own resources by
way of contribution from members, undertaking certain business
services such as bulk procurement of inputs and collective marketing
of agricultural produce, functioning as Business Facilitators (BFs),
agents for insurance and other services etc.

Steps in the formation of Farmers’ Clubs

• Bank branch can promote the clubs directly or engage Farmers’

Club promoting agencies like Krishi Vigyan Kendras (KVKs),
Agriculture Universities, NGOs, Corporates, etc.
• All grassroot level organisations (NGOs, PRIs, State
Agricultural Universities, KVKs, ATMA, Post Offices etc.) are
eligible to form Farmers’ Clubs
• Select a village/ cluster of villages suitable for launching Clubs
in the operational area of the bank branch.
• Identify a few progressive farmers and borrowers with good
track record of proper loan utilisation, aptitude and capacity for
team work. (Success of the Club hinges on the right choice of
members).
• Encourage the members to select a Chief
Coordinator/Volunteer/President and an Associate
Coordinator/Volunteer/Vice President and a Cashier. This will
 ensure collective leadership and continuance of the Club.
• Provide orientation training to them with the help of NABARD
(Regional Office / DDM or trained officers from the bank)
before launching.
• Encourage members to convene monthly meeting regularly,
guide them to have meaningful discussion and take necessary
follow up action.
• Motivate members them to identify credit and non-credit needs
(training, socio-economic, village infrastructure, etc.), prepare
a plan of action and accordingly arrange for expert talks,
counselling, need-based activities, etc. with the help of
Government Departments and other agencies concerned.
• Ensure that the members maintain Membership Register,
Meeting Register, Minutes Book and Books of accounts .
• Evolve a performance parameter and measure the Clubs’
contribution annually.
• Use Club as a tool in aid of branch not only in the matter of
credit and recovery but also in facilitating promotion of SHGs,
micro credit, Financial Inclusion and convergence of services.

Consent Letter:

NABARD provides financial support to FCs for an initial period of 3

years. Sponsoring Banks/Agencies are expected to give a consent letter
for supporting the clubs for a period of two years beyond the initial
period of 3 years of NABARD assistance.

No. of Clubs to be promoted by a Single Agency:

There is no restriction on the number of clubs to be formed a single

agency.

Rating of Farmers; Clubs

To facilitate the graduation of farmers’ Clubs into Federations of

Farmers’ Clubs or Producers’ Groups/Companies, it would be
desirable for the sponsoring agencies to rate the Farmers’ Clubs as per
prescribed parameters. However, the rating of the clubs is not linked to
any releases to be made out of the assistance under the new policy.

Awards to Best Working Clubs:

Awards would be given to be provided to best working clubs at the

district, state and national levels, based on the rating norms.
Capacity Building for Adoption of Technology (CAT):

NABARD’s Capacity Building for Adoption of Technology (CAT)

programme may be used for the benefit of farmers’ club members for
training and exposure visits within and outside the State.

Release of assistance:

Release of assistance will be in 2 instalments viz. 50% by way of

release in advance and the remaining 50% by way of reimbursement.

Incentives to sponsor agencies:

Incentive is provided to agencies (other than banks) for the formation

and nurturing of FCs.

Financial Support from NABARD

NABARD assistance to all agencies will uniformly be @Rs.10,000/-

per club per annum for a period of 3 years irrespective of whether they
are institutional or other agencies and also the region concerned. The
assistance will be towards meeting the following minimum and
mandatory expenses:

S. No. Particulars Amount (Rs.)

1. Formation & Maintenance Expenses 2,000.00
2. Base Level Orientation Training 5,000.00
Programme (BLOTP)
3. Meet with Experts (2 Programmes in a 3,000.00
year)
Total 10,000.00

NGOs/KVKs will be provided with an incentive of Rs.2,000/- per club

out of the total assistance of Rs.10,000/- per club per annum.

NGOs/KVKs who are operating in hilly/remote/naxal affected areas,

will be provided with additional incentive of Rs.3,000/- per club for a
period of 3 years over and above Rs.10,000/- referred to above.

Revival Package of Assistance for Dormant Clubs:

In order to revive the dormant/defunct FCs, NABARD has introduced

a revival package. The assistance may be used towards meeting the
revival cost including arranging exposure visits for members of such
dormant clubs as well as concerned branch managers. Package of
assistance may be extended to NGOs/VAs for revival of clubs
promoted by banks.

Sustainability of Farmers’ Clubs:

Regular source of income and consistency in their activities is the key

to sustainability of FCs. Sustainability of Farmers’ Clubs may be
ensured through creation of a corpus at the club level through
measures such as:

• Token membership fees (to be decided by members)

• Monthly savings (to be decided by the Club members)
• Service charge for SHG/JLG loans recommended to banks
@0.5% and 1%. (This is suggestive and the club members can
decide themselves.)
• Commission/incentive for selling insurance products (as per
negotiations with individual insurance companies).
• Commission for acting as Business Facilitators/Business
Correspondents (to be negotiated with individual banks).
• Any other charges for services provided to other agencies like
Government, Corporate Bodies etc.).

Such steps are expected to make the Farmers’ Clubs self sustaining
over a period of 3-5 years, when the funding support from institutional
agencies is withdrawn.

Status of Farmers’ Clubs :

During 2009-10, 16,590 Farmers’ Clubs have been formed taking the
cumulative number of farmers’ Clubs to 54,805 as on 31st March 2010
Environmental Promotional Assistance

NABARD's Initiatives
NABARD's, Environment Promotional Assistance scheme provides assistance to
development agencies like NGOs, Research Institutions, universities on selective basis
for:

• Developing simple and cleaner technologies for resource recovery, waste

minimisation, waste management, pollution control devices, reuse/ recycling and other
environmental protection aspects. • Demonstration/ Replication of eco-friendly/
pollution control measures/ technology. • Management/ treatment of effluents/ wastes.
• Providing training, organising publicity campaigns/ Awareness workshops/ capacity
building on environment aspects NABARD also provides refinance support to banks
against their investment credit for financing pollution control devices/ measures ( as per
pollution control norms/ regulations), as an integral part of the project outlays for
approved purposes under both farm and non-farm sector. It also has refinance schemes
for promotion of eco-friendly activities like NADEP, vermicomposts, non-conventional
energy resources, soil and water conservation.

Farm Sector Schemes

Village Adoption/Village Development Plan

1. Rationale

A majority of the villages in the country still face constraints such as access to education,
health facilities, drinking water, power, roads, Credit, Information and Market. Against
this background, adoption of especially villages in backward regions through preparation
of Village Development Plans (VDPs) would go a long way in ensuring holistic and
integrated development of the villages concerned.

2. VDP – The Objectives

The objective of Village Development Plan is to develop the selected village in an
integrated manner. This would include economic development, infrastructure
development and other aspects of human development i.e., education, health, drinking
water supply, etc., besides access to credit.

3. Need for an implementing Agency

For a holistic and integrated development of a village through synergy and convergence,
involvement of various agencies such as Government departments, Panchayati Raj
Institutions, Banks, NGOs and other Peoples’ Organisations and developmental agencies
is considered imperative. In order to synergise and coordinate this process, identification
of a nodal agency is considered essential, but not a pre-requisite for implementation of
the plan per se.
Alternatively, a VDP can also be prepared and implemented by NABARD through
its DDM concerned directly and also by banks independently.

4. Who can become the nodal/implementing agency

Any willing Government/Non-government agencies including Agricultural/Rural based

Universities, KVKs, Farmers’ clubs, SHGs, Village Development Committees,
Individual Rural Volunteers (IRVs), Cooperative Societies, Post Offices and bank
branches.

5. Selection of Nodal Agency

Banks and NABARD, can either directly take up the VDP or can identify any of the
nodal agencies listed above and finalise the same in due consultation with RO,
NABARD, concerned. Due care may be taken to ensure that the agency so selected, is
locally based to mobilize the requisite support from other stakeholders to deliver the
intended results.

6. Broad Roles and Responsibilities of nodal agency

i. To create awareness in the village and play effective leadership role in building
People’s Organisation/ Groups for various developmental activities.

ii. To facilitate convergence/integration of various programmes of NABARD,

State/Central Government and other agencies in the village.

iii. To help/prepare a Village Development Plan to ensure socio-economic and livelihood

advancement with enhanced credit support and financial inclusion of all families in
the village.

iv. To identify capacity building needs of the villagers.

v. To assist in infrastructure development in the village through participation of people /

local institutions.

vi. To protect forests and preserve the village eco-system and conserve soil health and
other natural resources.

vii. To monitor progress of implementation of the plan.

7. Selection of villages – Broad Criteria

• The selected village should be within the PPID block/DDM district (Non DDM
district will also be considered on merit) (in the case of NABARD). Banks can
have their own choice.
• The selected village should have responsive panchayat machinery.
• The selected village should be well connected with the district head quarter.
• The village which volunteers for higher level of participation/ contribution may
be given priority.
• Preference may be accorded to backward villages which have the potential and
need for development.

8. VDP – Broad Activities

i. Interface with village communities and assessing their varied needs through
Participatory Rural Appraisal (PRA) techniques.
ii. Meeting credit needs of poor through formation of Self Help Groups/Joint
Liability Groups/Farmers clubs initiatives.
iii. Watershed Development/Multi-activity approach/Livelihood based activities.
iv. In tribal dominant villages, development through “Wadi” approach.
v. Off Farm/Non-Farm activities including Rural Haat, cluster development around
the village, skill development, MED (Micro Enterprise Development),
Entrepreneurship Development Programme (EDP).
vi. Assessment of credit needs/formulation of projects for Agriculture/Rural
Development.
vii. Creation of Infrastructure with the support of Government Sponsored
programmes, if any, in this regard. (RIDF support by NABARD may be
prioritized for connectivity, irrigation, social infrastructure, etc. in the village).
viii. Assessment of credit plus requirements i.e. promotional needs including capacity
building of personnel from banks, Government Departments and community
based organizations.
ix. Coordination with Government Departments for social development, i.e.
education, health, women and child development, youth, etc.
x. Implementation of development programmes envisaged under Government Plan.
xi. Marketing related intervention
xii. Environment/Ecology related interventions
xiii. Value chain management

(These are only illustrative and not exhaustive)

9. VDP - Preparation of a Plan document

PRA exercise will precede the plan preparation -

Plan should contain:
 • Basic information – Genderwise population features, literacy and other data from
census, area of village, land use pattern, trend of production and productivity of
major crops, milk, fish, fruits, vegetables and other major products Forest cover,
water resources, etc., social structures, families belonging to backward classes,
access to health, safe drinking water, power, etc.
• Existing situation – problems/constraints including those relating to Gender,
Environment, infrastructural gaps, communication facilities, etc.
• Information relating to presence and support of institutional agencies such as
Banks, NGOs, Pos, etc.
• Credit flow details including recovery position.

A Plan Document may be prepared by Nodal/Implementing Agency covering the

following broad areas:

i. Developmental Activities with credit support from Banking institutions.

ii. Promotional support in the form of grant or soft loan assistance from NABARD
and other agencies including State/Central Government agencies/Line
Departments.
iii. Creation of Infrastructural facilities with support from NABARD under RIDF
through State Government Departments or otherwise directly by State
Government/PRIs, etc.
iv. Promotional activities relating to adoption of villages (e.g. conduct of
meetings/workshops, publicity, etc.) - to be funded under the plan through grant
support.
v. Any other activities/programmes/schemes to be undertaken specifically other
than the above.

(N.B.

a. Dovetailing of various schemes / programmes for which Grant support is

available from Government/other agencies (including NABARD) and
b. Government schemes for social development like education, health,
drinking water, etc. may be attempted for synergy and convergence. A broad
framework for the design of the plan is indicated in Annexure-I).

While formulating the integrated plan, the following points may be kept in view :

(i) Family centric approach to lending:

While assessing and meeting varied credit needs of the village communities in the
identified village, ‘family-centric approach’ should be adopted as far as possible.

(ii) Coverage of borrowers under KCC – Financial Inclusion

All possible efforts should be made for identifying and bringing into the fold of KCC
those farmers who are so far not covered by the KCC scheme including tenant farmers,
oral lessees, share croppers, defaulters. The banks should be impressed upon the need to
ensure that all the crop loans are routed through KCC only with at least 2% of their crop
financing directed towards tenant farmers/oral lessees.

(iii) Peoples’ involvement

The success and sustainability of the Plan would depend upon peoples’ participation and
ownership of the plan. Hence at every stage, involvement of people should be ensured.

(iv) Scope of the Plan

The Plan should aim at developing the selected village in such a manner that it becomes a
replicable ‘model’ for holistic development.

10. VDP - Key Strategies

(a) Developmental activities will be implemented through people’s participation

involving Gram Panchayats (PRIs), Self Help Groups (SHGs), farmers’ groups and other
people’s organisations. The ‘Integrated Development’ will include creation of
infrastructure by concerned State Government, assisted by Nodal Implementing Agency,
if necessary, as also other activities leading to human development like education, health,
drinking water supply, etc. Economic activities will be taken up by people through
individuals, SHGs, Farmers’ Clubs, PRIs, etc. based on local resources and with
assistance from banks and support from Government and Non Government
Organizations (NGOs). The Nodal Agency would coordinate, facilitate and provide
financial support either directly or through networking with banks/Government, etc.

11. Duration of the Plan

The period of VDP will be 3 years with scope for extension for another 2 years. The
implementing agency/other agencies will strive to implement the plan within this period
so as to have socio-economic impact on the lives of the village community.

12. Benchmarking the Impact

It would be desirable to have a benchmarking strategy to measure the impact of the Plan
for a three-year period as under:

• Reducing the …….% of families BPL by ……. %

• Increasing the literacy level by …..%,
• Reducing migration from the present level of …..% to …..% by creating avenues
for additional employment.
• Achieving all weather road connectivity to the village
• Ensuring 100% financial inclusion and doubling the credit disbursement
 • Promoting units for rural industries, post harvest handling, value addition
including processing and other economic units under rural non-farm sector.
• Gender related vision
• Protection of environment/Ecological balancing/restoration
The expected position at the end of each year for the three years may be
indicated.
To achieve the targets under various indicators, the input providers could be
broadly grouped (indicating resources available
from various departments, banks and other agencies, including the nodal agency)
as under:
• Deployment of credit
• Targets projected by various Government Programmes under different
schemes/programmes
• Activities that could be assisted out of various promotional funds with NABARD
or other agencies
• Any other activities.

13. Tentative Budget for three different models

For the purpose of coordinating various activities and convergence of various

schemes/programmes with the help of identified nodal/or implementing agency in the
selected village, it would be desirable to arrive at an estimated cost for different
promotional purposes based on the population of such villages for a period of say 3 years
which can be extended by another 2 years, if necessary. The cost estimates may have
built in flexibility to be adopted for individual villages, suiting to local needs/
requirements.

14. Operational Mechanism

• Conducting workshop by Nodal Agency or bankers to explain the concept and

discuss ways to operationalise the same.
• Conducting workshop at local level for Government officials concerned, banks,
NGOs, local Panchayats and other development agencies and explain the concept
and discuss ways to operationalise the same
• Assigning responsibility to a team of officers (need not be on exclusive basis) and
designating a nodal officer to coordinate the village development work at ground
level.
• Setting up a committee to be called Village Development Committee (VDC),
involving the relevant Government Departments, banks, NGOs and selected
academicians/social workers etc., to help in formulation of plans, networking,
implementation, monitoring etc.
• The members of VDC will elect/choose their leader from amongst themselves
through consensus, to head the VDC
• Since the Village Development Plan would aim at convergence of all schemes of
Government as well as other agencies, involvement of Government at local level
is a must.
 • Since Village Panchayats play very important role in the development of the
village, they could be involved right from the beginning of the exercise.
• Separate meetings for creating awareness among village people and seeking their
suggestions to operationalise the plan may be held. Discussions of the concept
with local leaders to explain to them the possible benefits etc. may be undertaken.
• Identification of needs of the village, based on discussions with the villagers
/PRA exercise. It may be prudent to explain the objective of the plan as well as its
pilot nature to the people, so that their expectations are not raised too high.
• Since credit flow is crucial in the plan, involvement of bankers at local level is
imperative at the planning stage itself. The credit target should be arrived at based
on bottom-up approach.
• As improvement in recovery of bank loan is one of the keys to improve credit
disbursement, a strategy needs to be worked out to substantially improve
recovery of loans in the village by discussing with all the stakeholders. However,
this could be the resultant factor of implementation of the Plan through peoples’
participation/involvement.

ANNEXURE

VDP – A broad framework of the design of the Plan

Support for infrastructure, Credit from banks, Extension services from

Watershed development including Credit coop. Government Depts. like
Agriculture, Horticulture,
Animal husbandry, and
other district level agencies
SHGs / JLGs of poor and Farmers’s Clubs, NFS
women for saving/ credit support for skill
through banks or NGOs development, marketing
etc.
Lending through farmers’
groups/ activity groups
Other agencies which can Facilitation by NGOs –
collaborate / contribute like social mobilization,
corporate bodies, industry awareness creation (escort
associations, etc services), technical services,
backward/ forward linkages
Government Corporations/
other expert bodies for
activity specific support
(linkages) like marketing,
storage, agro-processing
etc.
15. Incentive to nodal/implementing agency

It would be desirable to consider provision of some incentive to the nodal agency, if

inducted for implementation of VDP on mutually agreed terms.

16. Monitoring Mechanism

VDC will monitor the programme and a separate Monitoring Committee will be put in
place at district level, which will include lead banks, NGOs, NABARD and other
concerned agencies. Meetings will be held on quarterly basis.

Key steps involved

• Interface with people of identified village

• Undertaking PRA exercise
• Identify people’s needs
• Prepare a Plan document (for socio-economic, infrastructural development of the
village)
• Place it before the stakeholders – Village Development Committee, NGOs,
Banks, Government Departments, PRIs, NABARD and other agencies.
• Coordinate and network for physical, financial and promotional support.
• Obtain firm commitments from each stakeholder.
• Commence implementation in right earnest.

(Contd….)

Broad areas for support – A checklist

• Infrastructure: Helping in infrastructure building/ completing the incomplete

projects - roads, bridges, minor irrigation projects, schools, health centres,
veterinary centres.
• Rural Housing: Facilitating credit through banks for low-cost housing including
sanitation facilities.
• Watershed development: Assistance from Watershed Development Fund or from
Government or any special funds available with Development Agencies of the
State.
• “Wadi” Programme: Tree based livelihood programme being implemented
successfully for the benefit of tribal population in certain states could be
considered for implementation in tribal villages. Assistance for implementation of
such programme could be from NABARD/State Government, etc.
• NFS promotion and Development: For providing planned thrust to non-farm
sector activities in the selected village keeping in view the balance between the
market demand and traditional consumers based skills or local resources.
 • Micro finance : Helping people especially women to form SHGs and provide
microfinance services through linkage with local banks to ensure access to credit
and financial inclusion. Capacity building of the groups/ NGOs / banks with the
support of Implementing Agency by accepting support from various agencies
including NABARD.
• Support to NGOs for formation of - Farmers Groups/Joint Liability Groups or
Artisan Groups.
• Coordinate with Government and Agricultural Universities/Research
Organisations to provide extension services to motivate farmers to take up
remunerative cash crops
• Improving cash flow of farmers/villagers through subsidiary occupations such as
animal husbandry/fisheries.
• Facilitating linkages with corporate bodies
• Encouraging Income Generating activities by individuals/youth.
• Arranging exposure visits/programmes for capacity building
• Capacity building and motivating local bankers by conduct of Workshops
trainings and helping them in recovery of overdues.
• Facilitating IT related initiatives in the villages etc.
• Encouraging environment related initiatives leading to protection of environment
ecological restoration and achieving the concept of “green’ villages.
• Facilitating value chain management.

Human development aspects

Issues like education, health, women and child development, drinking water supply,
sanitation etc. are very crucial for the integrated development. Efforts are required to
involve concerned Departments/agencies since beginning, besides other social
organisations/NGOs.

Pilot Project for Integrated Development of Backward Blocks (PPID)

The objective of the PPID is comprehensive development of the selected backward

blocks in an integrated manner which would include economic development,
infrastructure development and other aspects of human development i.e., education,
health, drinking water supply, etc. This necessitates the involvement of all agencies
working at grassroot level viz state Government agencies (including Panchayats), banks,
NGOs, people’s organisations and other development agencies.

Under the project it is envisaged to facilitate convergence of all major schemes/ support
in the identified block . Such support measures include :

• Watershed Development
• NFS programmes
• Micro finance
 • Farmers' groups under VVV
• Infrastructure development under RIDF
• Capacity building of banks, Government Departments, NGOs and community
based organizations
• Coordination with Government Departments for social development, i.e.
education, health, women and child development, etc.
• Implementation of development programmes of the State Government.

NABARD launched PPID in 10 blocks across 5 states during the year 2003-04. It has
now been decided to extend the programme to 40 additional blocks taking the total
coverage of blocks to 50 from 10 states. The identified states are Gujarat, Maharashtra,
Uttaranchal, West Bengal, Chattisgarh, Karnataka ,Andhra Pradesh, Tamilnadu ,
Jharkhand and Orissa..

evelopment Projects

Kutch Drought Proofing Project (KDPP)

In the aftermath of the earthquake of January 2001 and the ensuing relief, rehabilitation
and reconstruction work, the Honorable Prime Minister announced the KDPP out of the
Prime Minister's National Relief Fund (PMNRF). The project is being implemented
through village Community Based Organizations (CBO's) and Non Governmental
Organization (NGO's) working in Kutch. With effect from 01 April 2005, the
responsibility of implementation of the project was entrusted to NABARD.

The main objectives of drought proofing envisaged under KDPP were:

a) To build and strengthen the Community Based Organisations

b) Water security for human and animal
c) Fodder security
d) Reduction in vulnerability-Food and Livelihood security

The common demands of the Kutch villages were water for domestic use, cattle and
protective irrigation for forestry, dry land horticulture & fodder development and
undertaking soil & water conservation measures. Accordingly, the projects were planned.
The activities included in the projects were earthen farm bunds, stone outlets, grass
seeding on bunds, grassland development, renovation of existing water harvesting
structures and construction of new structures. Some project specific activities like Kitchen
garden, providing charcoal making machines, milk chilling units were also included.

The programme is being implemented in Undoth, Poladiya, Kukadau, Atada, Chhuger,

Paiya, Shanpar, Vanoi Vandh, Fulpara villages
Farm Innovation and Promotion Fund
(FIPF)
1. Introduction
Agriculture is the backbone of our economy and provides employment to a large chunk
of our population. Many innovative initiatives are already being attempted by various
Research Institutions, Agriculture Universities, KVKs, NGOs and other individuals, in
the field of Agriculture and allied sectors. Absence of resource support to such innovative
ventures is found to be a major bottleneck to the process of speedy development of that
sector. NABARD has, therefore, decided to set up a separate fund titled "Farm
Innovation and Promotion Fund" (FIPF) to encourage specifically the innovations in the
farm sector. The Fund has been created in NABARD with an initial corpus of Rs.5 crores
from out of its operating surplus for the year 2004-05. 2. Objectives of the Fund
The objective of the Fund is to support the activities listed below :

a. To demonstrate bankability of new concepts in agriculture and farm sector.

b. To extend support for developing proto-types and for further development to make it
commercial.
c. To support activities connected with market survey for potential assessment/ market
acceptability for new agri/rural products.
d. To provide support for acquiring innovative technology from reputed research
institutions.
e. To extend support for obtaining patents for innovative technology/designs/ products.
f. To provide extension support for marketing/ dissemination of knowledge relating to
new products.
g. To support innovations in IT to take knowledge in different spheres to the rural areas.
h. To provide support on the analogy of venture capital for innovative ideas -
technological and managerial (like supply chain management) in farm sector for
further development.
i. To support any activity which will further increase productivity, flow of credit, making
knowledge available to the villages which could result in improved living standards for
the rural poor.

3. Guiding Principles

The guiding principles for the operation of FIPF will be broadly as indicated below :
a. The activities to be supported are to be in the context of economic and financial sector
 reforms and their orientation.
b. The activities may fall within the domain of agriculture and allied sectors only.
c. The activities may be innovative, experimental and demonstrative in nature leading to
commercial viability.
d. The activities may involve development of new products, proto types/
technology/patenting/extension support for technology, knowledge, information,
marketing, etc.
e. The activity should result in improvement or increase in farm productivity and or
simplification in agricultural processes and practices.
f. The proposals will be prioritised, added, altered, replicated or phased out allowing for
cross learning of experience of different programmes.
g. The proposals include a component of documentation of experience during
implementation.
h. Other strategies and approaches may be adopted within the overall principles and
objectives of FIPF.
However, the same will not cover or include fundamental research.
i. The proposals lead to creation of sustainable employment opportunities (direct/
indirect) in agriculture and allied sector.

4. Eligible Activities

The following activities will be eligible for assistance:

a. Demonstration of new and viable concepts in agriculture and allied sectors.

b. Development of proto-types to make it commercial.
c. Activities connected with market survey for potential assessment/ extension support
for marketing, dissemination of knowledge relating to new products/ processes, etc.
d. Acquisition of innovative technology developed and approved by reputed institutions.
e. Obtaining patents for innovative technology/designs/products/ processes.
f. Innovations in supply chain management and value addition.
g. To support any other activity connected/ related to (a) to (f) above.