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NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT Plot: C-24/‘G’, Bandra-Kurla Complex Post Box: 8121, Bandra (East)
Mumbai - 400 051
CHAIRMAN
Ref.No.NB.Secy./ 748 / AR-1/2012-13
12 July 2012
21 Ashadha 1934 (Saka)The SecretaryGovernment of IndiaMinistry of FinanceDepartment of Financial ServicesNew Delhi-110 001
The GovernorReserve Bank of IndiaCentral OfficeMumbai-400 001
Dear Sir
In pursuance of Section 48(5) of the National Bank for Agriculture and Rural Development Act, 1981, I transmit herewith the following documents :
i. A copy of the audited Annual Accounts for the year ended 31st March 2012 alongwith a copy of the Auditors’ Report and
ii. Two copies of the Annual Report of the Board of Directors on the working of National Bank during the year ended 31st March 2012.
Yours faithfully
Prakash Bakshi
Letter of Transmittal
Board of Directors
Directors appointed under Section 6(1)(b) of the NABARD Act, 1981
Directors appointed under Section 6(1)(c) of the NABARD Act, 1981
Directors appointed under Section 6(1)(d) of the NABARD Act, 1981
Directors appointed under Section 6(1)(e) of the NABARD Act, 1981
Dr. Prakash Bakshi Chairman
Shri J. K. Batish Prof. Trilochan Sastry Prof. M. L. Sharma
Shri H. R. Khan Prof. Dipankar Gupta
Shri P. K. Basu Shri S. Vijay Kumar Shri Umesh Kumar
Shri K. Jayakumar Shri D. B. Gupta Shri Shaleen Kabra
1.1: Measures adopted to Contain Inflation and Food Inflation .................................................................. 4
1.2: Supply-side Constraints ................................................... 8
2.1: Rural Infrastructure Promotion Fund (RIPF) .................. 42
2.2: Application Service Provider (ASP) Model of CBS ................................................................ 43
3.1: Impact Evaluation Findings of Watershed Projects ........ 46
3.2: New model in wadi ....................................................... 48
3.3: Pilot Project on Mobile Kisan Credit Card ..................... 49
Boxes3.4: UPNRM Projects – A success story of Kamadhenu
project in Chittoor district .............................................. 563.5: Vocational training through micro-loan:
PanIIT-NABARD model ................................................. 583.6: From “Red Light to a “Ray of light” through
JLG in Munger, Bihar .................................................... 643.7: Salient features of Scheme for Promotion of Women
SHGs in backward districts of India and Left Wing Extremism Affected districts of India .............................. 66
4.1: GoI Revival Package for STCCS : Impact Assessment Study .............................................. 85
ContentsPage No.
NABARD at a GlanceKey Data ReferencesPrincipal OfficersHighlights ....................................................................................................................................................................................iI. Rural Economic Environment .........................................................................................................................................1 Economic Scenario .............................................................................................................................................................1 Agriculture & Rural Economy .............................................................................................................................................5II. Business Operations .......................................................................................................................................................19
.....................................................................................................................................................19 .......................................................................................................................................................24
.....................................................................................................................................33.......................................................................................................................34
.............................................................................................................................................. 42III. Development and Promotional Initiatives ..................................................................................................................45
..........................................................................................................................................................45 ...............................................................................................................................................................45
...............................................................................................................................................58 .....................................................................................................................................................59
............................................................................................................................................................62 ..................................................................................................................................67
.........................................................................................................................68IV. Capacity Building of Client Institutions .....................................................................................................................75
...........................................................................................................................................75 .................................................................................................................................................89
V. Organisation, Corporate Governance and Management .......................................................................................93 .............................................................................................................................................................93
................................................................................................................................94 ...............................................................................................................................96
VI. Financial Performance & Management of Resources ..........................................................................................101 ....................................................................................................................................................101
..........................................................................................................................................................103 ..........................................................................................................................................105
Annual Accounts 2011-12 ..................................................................................................................................................107Auditors’ Report ............................................................................................................................................. 108Balance Sheet ................................................................................................................................................ 109Profit and Loss Account ................................................................................................................................. 110Schedules to Balance Sheet ............................................................................................................................ 111Cash Flow Statement ...................................................................................................................................... 133Consolidated Financial Statements 2011-12 ................................................................................................... 134 E-mail Addresses of NABARD Head Office Departments at Mumbai .............................................................. 140Regional Offices/Cell/Training Establishments ................................................................................................. 141Abbreviations ........................................................................................................................................................................143
Table 1.1 : Economic Indicators ............................................ 1
Table 1.2 : Sectoral Growth Rates of GDP ............................ 2
Table 1.3 : Drivers/Causes of Inflation in India ...................... 3
Table 1.4 : Trends in Exports and Imports ............................. 5
Table 1.5 : Trends in Rainfall and Water Storage ................... 6
Table 1.6 : Compound Growth Rates of Area, Production, and Yield of Principal Crops during 1980-1990, 1990-2000 and 2000-2012 ......................................................... 7
Table 1.7 : Requirement & Availability of Seeds in India ....... 8
Table 1.8 : Production and consumption of fertiliser ............. 9
Table 1.9 : Agency-wise Ground level Credit Flow .............. 10
Table 1.10 : Sub-sector-wise Ground Level Credit Flow for Agriculture & Allied Activities ............... 11
Table 1.11 : Production of Major Crops ................................ 11
Table 1.12 : Production, Consumption and Exports of Major Plantation Crops .................... 12
Table 1.13 : Area and Production of Major Horticulture Crops ............................................. 13
Table 1.14 : Agency-wise, Year-wise Kisan Credit Cards Issued .......................................... 15
Table 2.1 : Short term refinance (production credit) for the last five years ......................................... 19
Table 2.2 : Sanction of ST(SAO) Credit Limits to SCB for the year 2011-12 ................................. 20
Table 2.3 : Sanction of ST(SAO) Credit Limits to RRB for the year 2011-12 ................................. 22
Table 2.4 : Rates of Interest on Refinance ........................... 24
Table 2.5 : Agency wise disbursement of Refinance .......... 26
Table 2.6 : Region-wise Disbursement of Refinance ............ 27
Table 2.7 : Sector-wise Disbursement of Refinance ............. 28
Table 2.8 : Sector-wise Projects and Amounts Sanctioned under RIDF XVII ............................. 35
Table. 2.9 : Activity-wise Cumulative Sanctions ................... 37
Table 2.10 : Allocations, Sanctions and Disbursements ......... 38
Table 2.11 : Utilisation Percentage of RIDF (I TO XVII) ........ 39
Table 2.12 : Cumulative Economic and social benefits .......... 39
Table 2.13 : State-wise Expected Benefits under RIDF .......... 40
Table 3.1 : Externally Aided on-going Projects .................... 53
Table 3.2 : Progress under UPNRM ..................................... 55
Tables
Chart 1.1 : Monthly Inflation Rates for Major Subgroups of WPI (2011-12) .............................. 3
Chart 1.2 : Share of Agriculture & Allied Sector in Total Gross Capital Formation .......................... 14
Chart 1.3 : GCF in agriculture as a percentage of GDP orinating in agriculture ......................... 15
Chart 2.1 : Financial Support by NABARD ........................ 19
Table 3.3 : The progress under FIF & FTTF ........................ 61
Table 3.4 : Progress of the Micro-Finance Programme ........ 62
Table 3.5 : Grant Assistance Extended to various Partners in SHG-Bank Linkage Programme .......................................... 63
Table 3.6 : Comparative Position of Income earned from Consultancy .................................. 68
Table 3.7 : Training of RFI Personnel .................................. 72
Table 4.1 : Growth of Short-Term Co-operative Credit Structure ................................................ 75
Table 4.2 : Growth of Long-Term Co-operative Credit Structure ................................................. 76
Table 4.3 : Working Results of Co-operative Banks ............ 76
Table 4.4 : Accumulated Losses ......................................... 76
Table 4.5 : Region-wise Working Results of SCB ................. 77
Table 4.6 : Region-wise Working Results of DCCB ............. 77
Table 4.7 : Region-wise Working Results of SCARDB ......... 78
Table 4.8 : Region-wise Working Results of PCARDB ......... 78
Table 4.9 : Composition of NPA of Co-operative Banks ...... 79
Table 4.10 : Percentage of Recovery of loans to Demand .............................................. 79
Table 4.11 : Frequency Distribution of Co-operative Banks According to Range of Loan Recovery Percentage ................................ 80
Table 4.12 : Frequency Distribution of States/UTs according to Level of Loan Recovery of SCBs and DCCBs ............................................. 80
Table 4.13 : Frequency Distribution of States/UTs according to Levels of Loan Recovery of SCARDBs and PCARDBs .............................. 81
Table 4.14 : Elected Boards under Supersession ................... 81
Table 4.15 : Indicators of Performance ................................. 86
Table 4.16 : Region-wise Working Results of RRB ................ 87
Table 4.17 : Frequency Distribution of States According to Levels of Recovery of RRB ........... 87
Table 4.18 : Status of Financial Inclusion - RRB .................... 88
Table 5.1 : Promotions effected during the year .................. 95
Table 5.2 : Total Staff Strength ............................................ 95
Table 6.1 : Sources of Funds ............................................. 101
Table 6.2 : Uses of Funds .................................................. 104
ChartsChart 2.2 : Agency-wise Share in Refinance Disbursement .................................... 26
Chart 2.3 : Region-wise Share in Refinance Disbursement .................................... 27
Chart 2.4 : Tranche-wise Allocations - RIDF I to XVII ......... 34
Chart 2.4 : Sector-wise Cumulative Share in amount Sanctioned ........................................... 36
NABARD AT A GLANCE
(` crore)
Sources of Fund 2012 2011 Net
Accretion
Capital 3,000 2,000 1,000
Reserves & Surplus 13,408 11,863 1,545
NRC(LTO) Fund 14,479 14,468 11
NRC (Stabilisation) Fund 1,579 1,577 2
Deposits 291 277 14
Bonds and Debentures 38,584 26,788 11,796
Borrowings from GoI 85 124 (-)39
Borrowings JNN
Solar Mission 33 0 33
Foreign Currency Loan 503 503 0
Certificate of Deposits 1,281 137 1,144
Commercial Paper 2,245 6,448 (-)4,203
Term Money Borrowings 182 110 72
RIDF Deposits 75,107 67,878 7,229
STCRC Fund 20,000 14,622 5,378
Other Liabilities 6,345 5,546 799
Other Funds 4,953 6,171 (-)1218
Total 1,82,075 1,58,872 23,203
Uses of Funds 2012 2011 Net
Utilisation
Cash and Bank Balances 8,313 10538 (-)2,225
Collateralised Borrowing and Lending Obligation 231 228 3
Investments in
a) GOI Securities 2,147 2,548 (-)401
b) ADFC Equity 36 19 17
c) AFC Equity 1 1 0
d) SIDBI Equity 48 48 0
e) AICI Ltd. 60 60 0
f) NCDEX Ltd. & MCX Ltd. 34 18 16
g) Nabcons 5 5 0
h) Mutual Fund/VCF 0 390 (-)390
i) Biotech Venture Fund 26 10 16
j) Treasury Bills 58 0 58
k) Commercial Paper 1,037 1,862 (-)825
l) Non Convertible Bonds 375 225 150
m) Equity Shares of Other Institution 1 1 0
n) Debentures in Nature of Advance 12,344 13,461 (-)1,117
o) Certificate of Deposits 2,038 680 1,358
Loans and Advances
a) Production & Marketing Credit 48,338 33,885 14,453
b) Conversion of Production Credit into MT Loans 129 193 (-)64
c) MT & LT Project Loans 30,762 25,432 5,327
d) Interim finance 2 0 2
e) LT Non Project Loans 140 167 (-)27
f) Other Loans 2,323 182 2,141
g) RIDF Loans 70,860 66,078 4,782
h) Co-finance 72 88 (-)16 (Net of Provision)
Fixed Assets 225 230 (-)5
Others Assets 2,470 2,520 (-)50
Total 1,82,075 1,58,872 23,203
KEY DATA REFERENCESParticulars Unit Numerical Value Amount (` crore)
2010-11 2011-12 2010-11 2011-12
Economic Indicators Overall GDP 1 % Growth 8.4 6.5 – –
Agri GDP 1+ % Growth 7.0 QE 2.8 RE – –
Share of Agri GDP in total GDP % 14.5 QE 13.9 AE – –
South-west Monsoon % deviation from normal 2 1 – –
GLC % increase 21.79 8.70 4,68,291 5,09,040 Foodgrains production million tonnes 244.80 252.60 3rd AE – –
Oilseeds production million tonnes 32.50 31.20 3rd AE – –
Sugarcane production million tonnes 342.40 345.70 3rd AE – –
Cotton production million bales++ 33.00 35.00 3rd AE – –
KCC Issued million 10.16 10.07 43,370 54,269
Development Initiatives Watersheds No. 66 41 – –
FIPF- projects No. 45 41 – – Tribal development projects No. 126 98 374 291
FTTF No. of projects 512 395 45 45
Farmers’ Club No. of clubs 21,903 2,5243 – –
NABARD-KfW Projects No. 8 8 41 136RIF- promotional programmes No. of projects 122 108 11 8
REDP No. 3,327 9,852 12 13
SCC Issued lakh 1.20 0.94 514 496
FITF & FIF No. of projects – - – –
SHG Loan Disbursed* lakh 15.86 11.96 14,453 14,548
Consultancy Assignments - Contracted No. of projects 62 88 24.13 26.87R&D Fund - Sanction No. of projects – – 1.09 17.67Business Operations Financial Support by NABARD – – – 60,483 82,339 Refinance - ST Credit
ST (SAO) - SCB No. 21 23 23,759 33,996 - RRB No. 81 80 9,799.69 13,926 Weavers’ - SCB No. 3 3 216 190 ST (OSAO) - RRB – – – 600 677 Refinance - Investment Credit 13,486 15,422 Farm Sector – – – 5,055 6,525 NFS – – – 3,446 3,574 SHG – – 2,545 3,073Co-financing projects No. 8 3 12 14 RIDF Loans - Sanction No. of projects 41,779 18,162 18,315 20,701 - Disbursement – – – 12,060 14,927 ̂Performance of RFI
ST Co-operatives SCB in profit @ No. 29 29 491 521 DCCB in profit @ No. 324 317 1,691 1,457 LT Co-operatives SCARDB in profit @ No. 10 5 401 367
PCARDB in profit @ No. 295 329 401 367 ST Co-operatives - NPA Position SCB - NPA @ % to loan O/S 8.84 9.01 4,352 5,719 DCCB - NPA @ % to loan O/S 12.96 11.61 16,396 15,247
LT Co-operatives - NPA Position SCARDB - NPA@ % to loan O/S 45.06 44.81 5,648 6,116
PCARDB - NPA @ % to loan O/S 5187 51.96 4,889 4,834
RRB RRB in profit No. 75 79 2,421 2,469
RRB - NPA Position % to loan O/S 3.75 4.14 – –
Inspection of banks@@ No. 302 319 – –
CCB@@ No. 260 240 – –
RRB@@ No. 42 48 – –Financial Performance & Management of ResourcesTotal Working Funds – – – 1,58,872 1,82,075
QE : Quick Estimate RE : Revised Estimate P : Provisional 1 : At Factor Cost at 2004-2005 prices+ : Includes agriculture, forestry and fishing ‘++ : Of 170 kgs each ‘@@ : Statutory Inspections ^ : inclusive of warehousing refinance to Banks@ : Data pertains to financial years 2009-10 & 2010-11 AE : Advanced Estimate. * : Data pertain to 2009-10 & 2010-11
PRINCIPAL OFFICERS(31 March 2012)
EXECUTIVE DIRECTORS
S. K. Mitra V. Ramakrishna Rao B. S. Shekhawat
CHIEF GENERAL MANAGERS(Rural Development Banking Service)
C.K. Gopalakrishna P. Satish K.C. Shashidhar (Kerala)
Dr. Venkatesh Tagat P. Mohanaiah (Andhra Pradesh)
M.V. Ashok (Maharashtra)
K.K. Gupta (Odisha)
Dr. Rajender Singh A. K. Mukhopadhyay(NRMC)
S. N. A. Jinnah (Karnataka)
K. Jindal (Punjab)
K. Sayeed Ali (Haryana)
H. R. Dave (Gujarat)
Niraj Kumar Gupta A. D. Ratnoo (Rajasthan)
K. S. Padmanabhan R. Amalorpavanathan (BIRD, Lucknow)
Mahinder Kumar N. Krishnan (Uttar Pradesh)
S. Akbar (Madhya Pradesh)
A. K. Srivastava K. Muralidhara Rao Dr. S. L. Kumbhare J. G. Menon V. Mohan Doss (Bihar)
M. K. Mudgal Smt.. L. Venkatesan (Tamil Nadu)
Dr. S. Saravanavel (Jharkhand)
A Lahiri K. R. Nair S. C. Rabra (Jammu & Kashmir)
Naresh Gupta (Himachal Pradesh)
S. K. Bansal (Chhattisgharh)
A. P. Sandilya D. V. Deshpande (Bihar)
S. Selvaraj (Uttarakhand)
K. Venkateswara Rao
M. I. Ganagi R. M. Kummur G. R. Chintala (New Delhi)
Subrata Gupta Jiji Mammen (Rajasthan)
S. Padmanabhan (West Bengal)
U. N. Srivastava(Legal)
Neeraj Kumar(Technical)
Dr. R. N. Kulkarni(Economic)
J. S. Pynadath(Technical)
R. K. Das (Mizoram)
M. M. Baheti (BIRD, Mangalore)
Dr. U. S. Saha (Nagaland)
Dr. S. D. Kulkarni (Goa)
R. K. Mishra (BIRD, Bolpur)
S. Athirstavel (Andaman & Nicobar Islands)
P. C. Chaudhri (Sikkim)
S. V. Nemlekar(Manipur)
N. Remesh (Tripura)
M. T. Wankhede(Meghalaya)
S. N. Chalia(Arunachal Pradesh)
Des Raj(Srinagar Cell)
CHIEF GENERAL MANAGERS(Legal/Technical Service)
OFFICERS-IN-CHARGE OF REGIONAL OFFICES/ CELL TRAINING INSTITUTIONS
i
1. Indian economy, one of the key drivers ofglobal growth, had a relatively slower GDP growth at6.5 per cent in 2011-12 which can be attributed to theslowdown in the world economy, as well as todomestic factors such as inflation, tight monetarypolicy and cutting back on the fiscal stimulus. Lowergrowth of 6.5 per cent in the economy was mainly onaccount of slippage in the manufacturing sector growth(3.9 per cent as against 7.2 per cent in 2010-11) as alsoagriculture sector (2.8 per cent against 7.0 per cent inthe preceding year). With near double-digit growth, itwas the services sector which held India’s growthperformance together.
2. Growth of consumption expenditure and grossfixed capital formation in real terms was 6.0 per centand 5.6 per cent, respectively, during 2011-12,compared to 8.1 per cent and 7.5 per cent, in 2010-11. Consumption expenditure grew, though at a lesserrate, mainly due to largely consistent privateconsumption.
3. Headline inflation, after remaining persistentlyhigh over the past two years showed signs ofmoderation towards the end of 2011-12. Financialyear 2011-12 started off with a headline inflation of9.7 per cent, which briefly touched double digits inSeptember 2011, before coming down to 6.6 per centin January 2012. The shift in the nature and causes ofinflation in India was a natural fallout of the structuralchanges that the economy had undergone. Bothdomestic and global factors determined theinflationary trend. However, the inflationary pressuresduring 2011-12 in India was due to the interplay of anumber of immediate and some underlying long-termfactors such as high price of primary articles driven byvegetables, eggs and meat brought about by changingdietary pattern, increasing global commodity prices,etc.
4. Agricultural exports increased from `1,13,117crore during 2010-11 to `1, 41,095 crore during 2011-12, registering a growth of 24.73 per cent. Increase inagricultural exports has been mainly due to higher
Highlights
exports of basmati rice, raw tobacco, meat and meat
preparations, castor oil and tea.
5. Moderate growth rate of agriculture (2.8 per
cent) was in the backdrop of several constraints which
are long term in nature. Evidence shows that besides
tackling low growth in the agriculture sector, dealing
with high and increasing volatility in the wake of
climate change, is going to be a major policy challenge.
Moreover, Indian agriculture growth has been varying
considerably at the state level, implying that uniform
prescriptions across the states may not work.
6. Small farmers, who form 83 per cent of the
numbers, now operate about 41 per cent of the total
area, indicating that the base of Indian agriculture is
getting smaller. Estimates suggest that with 51 per cent
share in the value of agriculture output, small holders
contribute significantly to food security. Therefore, the
biggest challenge today is ensuring that the small
holders do not get marginalised and excluded from the
benefits of the growth process.
7. Since a large part of agriculture depends on
rainfall, receiving 899.9 mm of rainfall which was 1.0
per cent more than the Long Period Average (LPA)
during the South-West monsoon (June-September)
2011, was a positive feature. Reservoirs also showed
normal levels of water availability.
8. Production of food grains during 2011-12 was
at an all time record level of 252.56 (3rd Advanced
Estimate) million tonnes mainly due to increase in
production of rice and wheat. This happened despite a
decline in overall area under food grains during
2011-12 (1,254.92 lakh ha.) as compared to
2010-11(1,267.65 lakh ha.). The decline was due to a
shortfall in the area under jowar in Maharashtra,
Rajasthan and Gujarat; bajra in Maharashtra, Gujarat
and Haryana; and in pulses in Maharashtra, Uttar
Pradesh, Andhra Pradesh and Rajasthan. The area
under coarse cereals and oilseeds has also come down
as compared to the previous year.
Economic Environment
ii
9. With urbanisation and economy growing in
the range of 7 to 8 per cent, there has been a shift in
the demand from cereals to non-cereal food items like
pulses, edible oils, fruits, vegetables, dairy products,
meat and fish. These accounted for 70 per cent of the
wholesale price index (WPI) basket for primary food
items. The food inflation during the year were largely
due to the constraints experienced in increasing the
supply of these commodities in the short run, as
compared to their demand.
10. On the agricultural inputs side, seed sector
exhibited an improved performance. During 2010-11,
277.3 lakh quintals of certified/ quality seeds were
distributed. Production of breeder and foundation seed
reached 1.19 and 17.53 lakh quintals, respectively
during 2010-11, registering 13.53 and 7.8 per cent
growth over the previous year.
11. During 2010-11, an irrigation potential of
566.24 thousand hectares has been created by States
from major, medium and minor irrigation projects
under the Accelerated Irrigation Benefit Programme
(AIBP).
12. Despite making efforts to develop irrigation,
ensuring adequate water availability for agriculture is
becoming an increasingly important concern. The
efficiency of surface water irrigation has been on the
decline, while groundwater, the major source of
irrigation, suffers from over-exploitation in most of the
States resulting in steep decline in the groundwater
table.
13. Nearly, 65 per cent of agriculture is rain-fed
and located in resource poor regions. These regions
are home to a majority of small and resource poor
farmers whose contribution to food and nutrition
security has been acknowledged. Therefore, there is a
need for greater understanding of rain-fed agriculture
and framework for its development.
14. Agriculture credit growth as a facilitator, has
been consistent during the past few years. As against
the target of `4,75,000 crore of credit flow to
agriculture for 2011-12, the banking system disbursed
`5,09,040 crore as on 31 March 2012, achieving
107.2 per cent of the target. Commercial banks, Co-
operative banks and Regional Rural Banks disbursed
`3,68,616 crore, `86,185 crore and `54,239 crore,
respectively, constituting 72 per cent, 17 per cent and
11 per cent of the total credit flow during 2011-12.
15. The share of Gross Capital Formation (GCF)
in agriculture & allied sector in total GCF over the
past few years has been hovering between 6 and 8 per
cent as compared to about 18 per cent observed in
early 1980s, implying that the non-agriculture sectors
have been receiving higher investment resulting in
growth disparities. This is in line with the falling share
of agriculture in the overall GDP, which is in
conformity with the development patterns observed
elsewhere. Yet keeping in view the high population
pressure on agriculture, the need for substantial
increase in investment in agriculture is being
increasingly felt. Capital formation in agriculture
(`1,42,254 crore in 2010-11) now primarily relies on
private investment. Considering that public investment
has an enabling effect on private investment, the
stagnant share of the former is a matter of concern.
16. Kisan Credit Card (KCC) scheme introduced
in 1998-99 has facilitated smooth flow of credit to
farmers. During 2011-12, 10.07 million KCCs were
issued by banks with sanctioned credit limit of `54,269
crore. Of the 113.91 million credit cards issued
cumulatively, commercial banks issued 53.06 million
cards (46.58%) followed by Co-operative Banks with
43.66 million cards (38.33%) and Regional Rural
Banks with 17.19 million cards (15.09%).
17. Minimum Support Price (MSP) for common
paddy, wheat, arhar, moong and urad increased by
8.0, 14.73, 6.67, 10.41 and 13.79 per cent,
respectively, during 2011-12 over 2010-11. There was
no change in the MSP of cotton. The procurement of
rice and wheat as on March 1, 2012 at 26.8 million
tonnes and 28.3 million tonnes, respectively,
represented a decline of (-) 21.63 per cent and
increase of 25.78 per cent as compared to the
corresponding date last year.
iii
Business Operations
19. The total financial support extended by
NABARD during 2011-12 stood at `82,339.48 crore,
registering a growth of 36.13 per cent over 2010-11.
Production Credit
20. The total production credit disbursed, as on
31 March 2012, was `48,981 crore. During 2011-12,
ST-SAO credit limits were sanctioned to 23 SCBs
aggregating `33,995.67 crore as compared to
`23,759.34 crore to 21 SCBs during 2010-11. The
credit limits included `3,171.70 crore for the Oilseeds
Production Programme (OPP), `285.57 crore for
National Pulse Development Programme (NPDP) and
`1,106.47 crore for the Development of Tribal
Population (DTP). SCBs reached a maximum
outstanding of `33,995.61 crore during 2011-12 with
100 per cent achievement level.
21. During 2011-12, ST (Weavers) credit limits
aggregating `190.01 crore were sanctioned to three
SCBs (Andhra Pradesh- `60.32 crore, Tamil Nadu-
`122 crore & Puducherry- `7.69 crore) for
production, procurement, marketing activities as
against `215.75 crore during 2010-11. So far, 4,624
Handloom Weavers’ Groups (HWG) have been
formed in various States viz. Odisha (1,366), Andhra
Pradesh (1,258), Assam (272), Bihar (82) Jharkhand
(500), Madhya Pradesh (266), Uttar Pradesh (272),
West Bengal (88) and in other States (520). Of these,
2,062 HWGs have been credit linked.
22. In order to enhance ground level credit for
crop loans by Co-operative Banks, it was decided to
provide additional refinance of 10 per cent for the
year 2011-12 only. Thus, SCBs were eligible for
refinance upto 70 per cent of their crop loan
disbursements in North-Eastern and Hilly Regions; 60
per cent in Eastern Region and 55 per cent in the rest
of the country.
23. With a view to augmenting ST-SAO Refinance
to farmers through the co-operative credit structure, a
separate direct credit window facility was launched for
well-functioning Central Co-operative Banks. In
addition, NABARD sanctioned refinance to Regional
Rural Banks and Public Sector Banks for financing
Primary Agriculture Credit Societies (PACS) against
promissory notes, subject to the Banks furnishing a
declaration in writing setting out the purposes for
which they have made loans and advances or any
such reasons as may be required by NABARD. A credit
limit of `79.47 crore was sanctioned to Public Sector
Banks for financing PACS.
24. During 2011-12, NABARD sanctioned limits of
`13,925.66 crore to 81 RRBs under ST-SAO as against
`9,799.69 crore sanctioned to 80 RRBs in 2010-11.
The limit included `1,236.29 crore for Oilseeds
Production Programme (OPP), `251.90 crore for
Development of Tribal Population (DTP) and `27.91
crore for National Pulses Development Programme
(NPDP). The maximum outstanding was `13,925.66
crore with 100 per cent achievement level under the
limit sanctioned during 2011-12. Six RRBs in the
North-Eastern Region were sanctioned credit limit of
`104.94 crore, which was fully utilised by them.
25. RRBs were also provided additional refinance
of 10 per cent for 2011-12, only to enhance crop
loans disbursed by them. Thus, RRBs were eligible for
refinance upto 55 per cent of their crop loan
disbursements in North-Eastern and Hilly Regions;
upto 35 per cent in Eastern region and 30 per cent in
the rest of the country.
18. The significance of agriculture sector in
India is not merely restricted to its contribution to
GDP. Its wide-ranging impact on reducing
poverty, tackling inflation and achieving inclusive
growth is well-recognised The structural concerns
and other issues brought out above, have a
critical bearing on the policies and performance
of NABARD.
iv
26. In the Budget speech for 2011-12, the
Finance Minister announced that a Centrally
Sponsored Plan Scheme on “Revival, Reform and
Restructuring Package for Handloom Sector” with a
total outlay of `3,884 crore, be implemented by
NABARD. The revival package includes waiver of
overdue loans, capacity building, technology
upgradation and introduction of Common Accounting
System and Management Information System. So far,
19 States have given their consent to implement the
package in their States out of which, tripartite
agreement has been signed between GoI, NABARD
and the Governments of Andhra Pradesh, Kerala,
Uttarakhand, West Bengal and Karnataka.
27. The Ministry of Textiles (MoT), GoI vide its
notification dated 9 January 2012 issued operational
guidelines for “Institutional Credit” component under
the Integrated Handloom Development Scheme
(IHDS) for the handloom sector in the country.
NABARD has been designated as the “implementing
agency” for channelising the Margin Money
(@ `4,200/- per individual weaver) & Interest
Subsidy (@ 3 per cent per annum for 3 years)
components under the Package. The first instalment
of `7.57 crore has been released by the MoT, GoI to
be passed on to the banks.
28. The continuance of the interest subvention
scheme was announced in the Union Budget
2011-12, making interest subvention available at
2 per cent per annum to public sector banks,
co-operative banks and RRBs for deploying their own
funds for crop loan upto `3 lakh per farmer, provided
the ultimate borrowers were given loans at 7 per cent
interest rate per annum. Additional subvention of
3 per cent was announced for 2012-13 to those
farmers who repaid crop loans promptly within one
year of disbursement. Interest subvention was given
to NABARD for providing concessional refinance to
SCBs and RRBs at 4.5 per cent interest rates. The
Interest subvention for 2011-12 was estimated at
`3,000 crore.
29. NABARD continued to act as the nodal
agency for GoI package for restructuring of term loans
of co-operative sugar mills. Out of `200.13 crore
received from GoI towards interest subvention,
`200.02 crore was disbursed to 76 co-operative sugar
mills in Maharashtra and Odisha. NABARD also acted
as the nodal agency for routing interest subvention to
co-operative banks and RRB under “Scheme for
extending Financial Assistance to Sugar Undertakings -
2007”. Out of `383.59 crore received from GoI during
the year 2011-12 towards interest subvention, `383.38
crore was released to 212 sugar mills operating in 11
States viz., Maharashtra, UP, AP, Tamil Nadu,
Uttarakhand, Odisha, Madhya Pradesh, Gujarat, Goa,
Punjab and Karnataka.
Investment Credit
30. During the year 2011-12, the refinance
disbursement for investment credit for farm and
non-farm sector activities was `15,421.70 crore as
against the budget of `14,995.00 crore. During
2011-12, Commercial Banks have availed of
refinance amounting to `8,433.75 crore, SCARDBs
and SCBs have availed of refinance amounting to
`2,444.93 crore and `1,192.29 crore, respectively
and RRBs have availed of refinance amounting to
`3,086.19 crore. The spatial distribution of refinance
disbursement across regions indicated that a major
share had been accounted for, by the States in the
southern region (48.20%), followed by northern
(15.7%), central (12.10%), eastern (11.60%), western
(10.80%), and north-eastern region (1.60%). During
2011-12, the major share of refinance has been
accounted for, by NFS (23.18%) followed by SHG
(19.92%), Farm Mechanisation (13.84%), Animal
Husbandry (10.18%) and Plantation & Horticulture
(10.03%).
31. With effect from 2 September 2011, refinance
to SCARDBs was extended as term loans as against
the earlier practice of contribution to floatation of
debentures. Under the new system, all SCARDBs are
eligible for refinance of 90 per cent of the eligible
bank loan disbursed.
v
Rural infrastructure Development Fund
32. The Corpus of the Fund has grown to `18,000
crore under Rural infrastructure Development Fund
(RIDF) XVII (2011-12) from an allocated amount of
`2,000 crore under RIDF I (1995-96), taking the
cumulative allocation to `1,52,500 crore (which is
inclusive of `18,500 crore under a separate window
for funding rural roads under the Bharat Nirman
Programme). The Union Budget for 2011-12, allocated
an amount of `18,000 crore under RIDF XVII during
2011-12, out of which `2,000 crore has been
exclusively dedicated towards creation of warehousing
facilities in different States on a priority basis.
33. As on 31 March 2012, 18,162 projects
involving a loan amount of `20701.12 crore were
sanctioned under RIDF XVII. Of the total number of
projects sanctioned, irrigation projects accounted for
27.50 per cent followed by rural road projects
(24.20%), social sector projects (17.90%), rural bridges
(12.90%) and agri related projects (9.70%). An
amount of `1,493.82 crore was sanctioned for
warehousing projects as at end of March 2012.
Cumulatively, 4,62,229 projects were sanctioned since
the inception of RIDF involving an amount of
`1,42,470.65 crore as on 31 March 2012. Of the
cumulative RIDF loans sanctioned as on 31 March
2012, 42 per cent went to agriculture and related
sectors, including irrigation and power; 15 per cent to
social sector projects like, health, education and rural
drinking water supply; while the share of rural roads
and bridges was 31 per cent and 12 per cent,
respectively.
34. Taking into account phasing of the projects,
under various tranches (RIDF I to XVII), State
Governments had a total pool of projects of
`1,30,009 crore as on 31 March 2012. During the
year, disbursements were made to the tune of `14,927
crore (inclusive of `759 crore sanctioned and released
as refinance under Warehousing facilities to Banks). A
state-wise analysis of ratio of disbursements to the
approved phasing of sanctions reveals that Mizoram
topped with 132 per cent, followed by Goa (106%),
Meghalaya (100%), Manipur (96%), Maharashtra and
Kerala (95%), Haryana and Uttarakhand (93%), Tamil
Nadu (92%) and Chhattisgarh (91%).
35. The cumulative deposits received under RIDF
stood at `1,11,025.94 crore as on 31 March 2012.
The total loan outstanding under RIDF as on
31 March 2012, was `70,860.31 crore.
36. Consequent upon the change in bank rate
from 6 per cent to 9.5 per cent w.e.f. 13 February
2012, the rate of interest payable to NABARD by the
State Governments has been fixed at the earlier bank
rate viz., 6 per cent plus 0.5 per cent (i.e. 6.5 per
cent) till 31 March 2012. Loan disbursements from
RIDF to the State Governments on or after April 01,
2012 has been fixed at 1.5 per cent below the
prevailing bank rate.
37. Among the new steps initiated in 2011-12 for
quick grounding of RIDF projects, the receipt of
Administrative Approvals (AA) from the State
Governments was made mandatory before submission
of projects to NABARD for sanction; 20 per cent of
RIDF was specifically allocated for social sector
projects and steps initiated for on-line/web-based
monitoring of RIDF projects.
38. NABARD set up the “Rural Infrastructure
Promotion Fund (RIPF) with a corpus of `25 crore on
1 September 2011 for augmenting the skill sets and
technical know-how of personnel engaged in the
creation of rural infrastructure. The Fund also aims at
creation of critical, low cost, last-mile rural
infrastructure that would benefit the village community
at large and form the basis for larger infrastructure
projects under RIDF. The small investments under
RIPF is expected to attract and make larger
investments feasible under RIDF. As on 31 March
2012, 8 proposals amounting to `0.56 crore have
been sanctioned under RIPF.
39. In the Union Budget 2011-12, Government of
India (GoI) had made a dedicated allocation of
`2,000 crore for financing warehousing under RIDF. As
on 31 March 2012, total sanctions under the scheme,
stood at `1,493.82 crore, to four State Governments
viz., Bihar, Karnataka, Tamil Nadu and Puducherry.
vi
40. NABARD also introduced a scheme for
providing refinance to banks, against loans extended
by them to private entities and the agencies owned/
assisted by government, for creation of warehousing
infrastructure. Refinance from NABARD was made
available at an interest of 8 per cent for a period of
07 years (including a moratorium of 02 years).
NABARD will also provide financial incentive to those
borrowers, who repay their loans, along with interest,
as per the repayment schedule prescribed by the
financing bank. An aggregate amount of `759.07
crore was sanctioned and disbursed to banks. With
this, the total sanctions against the allocation of
`2,000 crore stood at `2,252.89 crore as on 31
March 2012.
New Business Initiatives
41. As part of the new business initiatives,
NABARD has set up NABARD Infrastructure
Development Assistance (NIDA) to provide credit
support for funding of rural infrastructure
projects. Ensuring investments in agriculture in the
eastern states was another important initiative. The
focus of the new initiatives was on excluded areas and
the small operators who will have to compete in the
markets, which are quite demanding in terms of
quality and food safety. Participating in these markets
poses challenges, but they also bring more
opportunities. To take advantage of these, building up
institutions and arrangements based on principles of
aggregation are essential. These would include
co-operatives as well as producers’ organisations and
its variants. The new business initiatives need to be
viewed in the above context.
42. Financing Producers Organizations; creation of
new line of financial support for DCCBs; bringing
co-operatives on a higher technology platform of Core
Banking Solutions (CBS) to create a level playing field
to compete with the other banks for business and
growth; engaging with the Primary Agricultural
Co-operative Societies (PACS) to convert them in to
multi-service centers are all such initiatives which
eventually have huge development potential and are
inclusive in nature. The new business initiatives thus,
are in tune with organisational strategy of ‘business for
development’.
43. NABARD Infrastructure Development
Assistance (NIDA), a new line of credit support for
funding of rural infrastructure projects, funds State
owned institutions/ corporations both on-budget as
well as off-budget for creation of rural infrastructure
outside the ambit of RIDF borrowing. The
cumulative sanctions under NIDA during the year
2011-12 was `890.85 crore and disbursement of
`422.90 crore.
Development and Promotional Initiatives
Farm Sector
44. During the year, 41 watershed projects weresanctioned under the Watershed Development Fund,taking the cumulative number of such projects to 620,
covering an area of 5.29 lakh ha. in 15 States, with atotal commitment (loan and grant component) of`239.99 crore. Sixty one projects graduated to Full
Implementation Phase (FIP), taking the number ofsuch projects to 316. NABARD anchors four types ofwatershed development programmes in the country
namely, (i) Indo-German Watershed Development
Programme (IGWDP), (ii) Participatory WatershedDevelopment Programme under WatershedDevelopment Fund (WDF), (iii) Prime Minister’s
package for distressed districts in four States and(iv) Integrated Watershed Development Programme(IWDP) in Bihar, supported by the Planning
Commission.
45. Tribal Development Fund programme, in its7th year of implementation, has enhanced livelihoodopportunities of tribal communities, covering
traditional tribal livelihoods such as bee keeping,
vii
sericulture, organic wadis and mixed wadis (perennial
fruit crops + creeper vegetables + spices). During the
year, financial assistance of `290.63 crore was
sanctioned for 98 projects benefiting 72,419 tribal
families in 16 States. The cumulative sanction as on
31 March 2012 was `1,208.23 crore, covering
3,22,912 families in 415 projects across 26 States/
UTs. During the year, a new Wadi model was
introduced in Alirajpur, Madhya Pradesh that
generated income for the farmers from the first
year of implementation by combining the mandap
system of vegetable cultivation along with cultivation
of perennial fruit crops.
46. During 2011-12, 41 projects were sanctioned
under Farm Innovation and Promotion Fund (FIPF) in
14 States with financial assistance of `56.53 crore
including the project on “Augmenting Farm
Productivity in Balasore District in Odisha” with a
grant support of `48.08 crore phased over a period of
three years. The Fund also supported the pilot testing
of the unique mobile-enabled Kisan Credit Project (m-
KCC) project in Villupuram district of Tamil Nadu. The
project enabled farmers to transact on their loan
accounts with Pallavan Grama Bank using their mobile
phones and enter into mobile supported cashless
transactions with agriculture input dealers.
47. The Farmers’ Technology Transfer Fund
(FTTF), with a corpus of `100 crore, supports
adoption of appropriate technologies by farmers.
During the year, 395 proposals were sanctioned under
FTTF in 29 States with financial assistance of `20.59
crore as grant. The cumulative disbursement was
`44.59 crore.
48. With the launching of 25,243 new Farmers’
Clubs during the year, the number of clubs reached
1,01,951 as on 31 March 2012. NGOs promoted
maximum number of clubs (15,870) followed by
co-operative banks (4,359), commercial banks (2,104),
RRBs (2,103) and SAUs/KVKs/other agencies (807)
during the year 2011-12. Eastern region had the
highest share (24.99%) of clubs followed by the
Central (24.83%), Southern (18.48%,) Western
(16.52%) and Northern (12.43%) regions, while NER
accounted for 2.75 per cent. 279 Farmers’ Clubs
functioned as Business Facilitators/Business
Correspondents and 761 Farmers’ Clubs as Self Help
Promoting Institutions.
49. The Umbrella Programme on Natural
Resource Management (UPNRM), which aims to boost
rural livelihoods by supporting community-managed
sustainable natural resource management projects, has
supported 104 projects in 16 States with
disbursements to the tune of `131.89 crore.
50. A concessional refinance support scheme was
launched by NABARD during the year to facilitate
institutional credit flow for key investments in the
Eastern Region that have a direct bearing on
enhancing crop productivity. The scheme provides
refinance at a concessional rate of 7.5 per cent per
annum to seven Eastern states, viz., Assam, Bihar,
Chhattisgarh, Jharkhand, Odisha, West Bengal and
Uttar Pradesh. The key activities for concessional
refinance support under the scheme, include (a) Water
Resources Development (b) Land Development (c) Farm
Equipment and (d) Seed Production units. The total
lending target of the banks for the financial year 2011-
12 was `3,912 crore.
51. During the year, two new initiatives for
augmenting farm productivity were launched. These
include the Pilot project for Augmenting Farm
Productivity in Select Districts and the Pilot Project for
Augmenting Farm Productivity in Balasore District,
Odisha. The Pilot Project for Augmenting Farm
Productivity in Select Districts is a comprehensive
package for augmenting farm production and
productivity by addressing all interlinked components
of farming viz., agricultural inputs, technology, credit,
post-harvest management, value addition and
marketing in a holistic manner. One district each has
been selected in 11 States for implementation, viz.,
Bihar (Bhojpur), Chattisgarh (Bilaspur), Haryana
(Sirsa), Jharkhand (Deoghar), Karnataka (Belgaum),
Maharashtra (Yavatmal), Madhya Pradesh (Shahdol),
Odisha (Balasore), Rajasthan (Bikaner), Uttar Pradesh
viii
(Azamgarh) and West Bengal (Nadia). The Pilot
Project at Balasore District in Odisha has been
sanctioned with a total financial outlay of `3,211.86
crore, including a grant component of `48.08 crore to
be supported under the Farm Innovation Promotion
Fund (FIPF), for a period of three years i.e., from
2012-13 to 2014-15.
Rural Non farm Sector
52. The Rural Innovation Fund, which facilitates
innovative, risk-mitigating experiments with potential
to promote livelihood opportunities in rural Farm,
Non-Farm and micro-Finance sectors, supported 108
new innovative projects during the year. The
cumulative projects supported under the Fund are 483
in number, as on 31 March 2011 of which, 150 have
been completed and 67 are in advanced stages of
implementation.
53. With the sanctioning of 9,852 REDPs/ SDPs
with grant support of `13.09 crore during 2011-12,
NABARD has so far supported 27,711 REDPs/SDPs
with grant of `96.45 crore, covering around 6.93 lakh
unemployed rural youth. During the year, NABARD
initiated a vocational training programme for blue
collar entry level workers like masons, welders, cooks,
technicians and drivers on a pilot basis in
collaboration with the “PanIIT Alumni Reach for India”
(PARFI), an organization created by IIT alumni. It is a
loan-based approach to vocational training. 800
students have been trained through this model with a
100 per cent placement rate.
54. During the year, 94,479 Swarojgar Credit
Cards (SCC) with credit limit of `495.81 crore were
issued for facilitating hassle-free credit for investment
and working capital requirements of small/micro
entrepreneurs. The cumulative total of SCC as on 31
March 2012 was 13.06 lakh, involving a credit limit of
`5,445.32 crore.
Financial Inclusion
55. The Financial Inclusion Fund (FIF) and the
Financial Inclusion Technology Fund (FITF), dedicated
to support development, promotional and Information
and Communication Technology (ICT) interventions
leading to financial inclusion are in operation in
NABARD. As on 31 March 2012, the cumulative
sanctions under FIF and FITF were `114.62 crore and
`343.48 crore, respectively and disbursements `36.46
crore and `184.16 crore, respectively. This year, RRBs
were supported for implementation of CBS and card
based ICT solutions using the Application Service
Provider (ASP) model and for holding financial literacy
awareness camps in villages.
56. A Centre of Excellence for Rural Financial
Institutions (CERFI) was set up during the year with
the objective of embedding Aadhar numbers into the
CBS platform of RRBs, for bringing about higher
accountability and transparency in last- mile banking.
Micro Finance
57. The SHG-Bank Linkage Programme was given
a renewed thrust with the launch of SHG-2. The focus
of SHG-2 would be on voluntary savings, cash credit
as a preferred mode of lending, scope for multiple
borrowings by SHG members in keeping with repaying
capacity, avenues to meet higher credit requirements
for livelihood creation, SHG Federations as non-
financial intermediary, rating and audit of SHGs as
part of risk mitigation system and strengthening
monitoring mechanisms.
58. The GoI communicated its decision of only
sanctioning Cash Credit Limits to SHGs from 17
November 2011, so as to address the issue of delayed/
limited /non-approval of repeat loans to SHGs, to
ensure cost effectiveness to clients and to provide
greater operational flexibility to SHG clients.
59. During 2011, loans amounting to `14,547.73
crore were disbursed to 11,96,134 SHGs. As on 31
March 2011, there were more than 74.62 lakh savings-
linked Self Help Groups (SHG) and more than 47.87
lakh credit-linked SHGs covering 9.7 crore poor
households under the micro-finance programme.
ix
60. During 2011-12, `33.31 crore was released
under Micro-Finance Development and Equity Fund
(MFDEF); of which, `28.68 crore was grant support
for promotional activities and `4.63 crore for
CS/RFA to MFIs, as against `29.95 crore and `17.43
crore, respectively, in the previous year.
61. An amount of `36.68 crore was sanctioned as
grant for promotion of 1.94 lakh JLGs across the
country till 31 March 2012. During the year, banks
disbursed a loan of `946.81 crore to 1,29,646 JLGs
upto 31 March 2012 taking the cumulative loan
disbursed to `2,092.10 crore for 2,70,691 JLGs. A
unique project was sanctioned by NABARD during the
year, to the Bihar Kshetriya Gramin Bank, Munger for
promotion of two JLGs comprising sex workers, one
for taking up tailoring activity and the other for
opening a shop selling bangles.
62. During the year, 1,914 MEDPs were
conducted for 56,292 members on various location-
specific farm, non-farm and service sector activities.
Cumulatively, 6,363 MEDPs had been conducted for
1,64,948 participants.
63. During 2011-12, NABARD Financial Services
Ltd., (NABFINS), disbursed loans to the extent of
`213.58 crore to 6,915 SHGs through 67 Business
Correspondents (BCs), taking the cumulative
disbursement to `265.54 crore to 8,968 groups. Loans
other than to SHGs were disbursed to the extent of
`2.30 crore during the year, taking the cumulative of
other loans disbursed to `5.25 crore.
64. The Centre for Micro-finance Research (CMR)
brought out two issues of its half-yearly journal, “The
Micro-finance Review”and its sub-centres undertook
research on 41 prioritised themes during the year.
Grant assistance of `199.33 lakh was released by
NABARD during 2011-12 to CMR, taking the
cumulative assistance to `560.01 lakh.
65. A new scheme for Promotion of Women SHGs
in backward and Left Wing Extremism (LWE) affected
districts of India was formulated in association with the
GoI, as a viable and self-sustainable model for
promotion and financing of Women Self Help Groups
by involving an anchor NGO in each of the selected
backward districts of the country. The NGO will serve
not only as an SHPI, but also as a banking/business
facilitator. The scheme will be implemented in 109
selected backward/LWE districts of the country.
66. As stated in the Budget Speech of 2011-12, a
‘Women SHGs Development Fund” with a corpus of
`500 crore was created to empower women by
promoting their Self Help Groups. This Fund will also
support the objectives of Aajeevika i.e. the National
Rural Livelihood Mission. It will empower women
SHGs to access bank credit.
NABARD Consultancy Services
67. During the year, NABCONS contracted 88
assignments for a contract value of `26.87 crore. The
company executed 125 assignments, including 6
international visitor’s programmes. NABCONS earned
`17.30 crore as professional fees on assignments
executed, `0.43 crore as commission from mutual fund
distribution and `2.62 crore as interest on investments,
aggregating a total income of `20.35 crore.
Research and Development Activities
68. During the year, `17.67 crore was utilised
from the R&D Fund for supporting activities like
research projects/studies (`0.70 crore), seminars
(`0.85 crore), training/summer placement (`15.57
crore), NABARD Chair Professor Scheme (`0.48 crore)
and other activities (`0.07 crore). As on 31 March
2012, the cumulative disbursement stood at
`153.86 crore.
69. During 2011-12, five research projects
involving a grant assistance of `0.49 crore were
sanctioned. Further, seven projects/studies sanctioned
earlier were completed during the year.
70. During the year, grant assistance of `1.14
crore was sanctioned to various universities,
research institutes and other agencies for organising
139 seminars, conferences, symposia and workshops
covering subjects/areas related to agriculture and
rural development including Green Revolution-II,
x
Agri-Marketing, Micro Finance, Financial Inclusion,
Sustainable Livestock and Poultry Development,
Plant Biotechnology, Conservation of Animal
Genetic Resources Water Security and Climate
Change, Food Security, Organic Farming, Economic
Reforms and Agriculture, Advances in Aquaculture,
Regional Imbalance – Inclusive Growth, SHG and
Women Entrepreneurship and Coffee Research, etc.
The grant support extended to the organisers
enabled them to document the proceedings and
publish background papers, thus facilitating wider
dissemination of the recommendations/action points
and initiate suitable policy interventions by agencies
concerned.
71. NABARD’s development initiatives have been
carved out under the overarching objective of
‘sustainable inclusive growth’ of India’s development
policy. To make a perceptible difference on ground,
addressing the concerns of small operators and
excluded areas and deploying technology upon finding
space for location/product specific viable delivery
models, which can be up-scaled have been the
principles which have guided various development
initiatives.
Capacity Building of Client Institutions
Institutional Development
72. During 2010-11, SCB as a group earned
overall return of 6.9 per cent, while cost of funds
worked out to 5.01 per cent, resulting in financial
margin of 1.92 per cent (excluding miscellaneous
income of 0.49 per cent). The average transaction cost
and risk cost of SCB during the year worked out to
1.37 per cent and 0.39 per cent, respectively. SCB as
a group earned a positive net margin of 0.71 per cent
in 2010-11, compared to net margin of 1.06 per cent
in 2009-10.
73. In the case of DCCB, the overall return on
working funds was 7.62 per cent, while the cost of
funds was 5.11 per cent, yielding a financial margin of
2.51 per cent (excluding miscellaneous income of 2.30
per cent). The average transaction cost and risk cost as
percentage to working funds were 2.09 per cent and
1.37 per cent, respectively, during 2010-11. The
DCCB as a group, earned a net margin of 1.41 per
cent during 2010-11.
74. During 2011-12, financial assistance of `7.09
crore under Co-operative Development Fund (CDF)
was sanctioned and `5.34 crore disbursed (including
disbursements against sanctions of previous years). As
on 31 March 2012, cumulative sanctions and
disbursements were `105.26 crore and `92.91 crore,
respectively. The balance in the Fund as on 31 March
2012 stood at `125 crore.
75. RRBs were given a target of opening 2000
new branches by March 2012. In the current year, as
on 31 March 2012, RRBs had opened 913 new
branches, taking the cumulative number of branches
of all RRBs to 16,914 spread over 635 districts in 26
States and one UT. It is now compulsory for all new
branches to be equipped with CBS. CBS has been
fully implemented in 80 RRBs. J & K GB has
implemented CBS in 90 branches out of 184
branches. Kisan Kshetriya Gramin Bank (UP) has not
been able to make any progress on CBS
implementation in the bank, as it is linked to its
merger with Aryavrat GB.
Supervision of Banks
76. During 2011-12, statutory inspections of 319
banks (31 SCBs, 240 CCBs and 48 RRBs) and
voluntary inspections of 15 SCARDBs have been
conducted as on 31 March 2012 as scheduled. The
inspections brought out supervisory concerns relating
to these institutions, which were communicated to the
banks concerned, Registrar of Co-operative Societies
(RCS), State Governments (in respect of co-operative
banks) and Sponsor Banks (in respect of RRBs) for
corrective action.
77. Pursuant to the recommendations of the
Committee on Financial Sector Assessment (CFSA)
(Chairman: Dr. Rakesh Mohan, the then Deputy
xi
Governor of RBI), the RBI had revised the licensing
norms for co-operative banks during October 2009.
The number of licensed SCBs and CCBs stood at 24
and 222, respectively, as on 31 March 2011. During
the year, RBI issued licenses to 4 SCBs and 82
CCBs, thus increasing the number of licensed banks
to 332 (28 SCBs and 304 CCBs) as on 31 March
2012. The number of scheduled SCBs remained
unchanged at 16. The problems in attaining
licensing eligibility by co-operative banks in some
States were reviewed periodically by the
Government of India.
Organisation, Corporate Governance and Management
78. The Board of Directors met seven times
during the year, while the Executive Committee and
the Sanctioning Committee for loans under RIDF, met
once and nine times, respectively.
79. The repositioning initiative of NABARD was
undertaken with a view to analyse existing financial
products and services, types of existing development
interventions both internally and through market
survey and to design new products, services and
networks. Further, the purpose was also to evaluate
organisational structure, against repositioning of
products and services and set up appropriate structure;
system and processes re-engineering.
80. During the period ended 31 March 2012, 744
applications and 101 appeals were received and
information provided. 20 hearings on appeals made to
Central Information Commission were attended to.
Workshops were conducted on Right to Information
Act, 2005 through Video Conferencing for selected
Regional Offices at HO.
81. During the year, 103 programmes were
conducted by NBSC Lucknow covering 2,232 officers
(2,049 from NABARD and 103 officials from RFIs)
covering Programmes on Watershed Development,
TDF, Microcredit, HRMS, Financial Inclusion, Appraisal
and monitoring of Infrastructural projects etc. Further,
1,704 officers and 528 officers were trained in
in-house and on-location programmes, respectively.
During 2011-12, National Bank Training Centre
(NBTC), Lucknow and Zonal Training Centre (ZTC),
Hyderabad conducted 74 training programmes for 976
Group ‘B’ and ‘C’ staff. The College also conducted
pre-promotional training programmes for Group ‘B’
staff for promotion to higher grade in the officers
cadre. One programme each conducted by NBTC, ZTC
and HO, Mumbai covering 31 ST/SC Group B staff.
One pre-recruitment Training was conducted at IES,
Bandra covering 84 SC/ST participants.
82. During the year, 20 staff members availed of
the facility of the Incentive Scheme for staff members
to pursue professional studies. Various Courses being
pursued by employees were CFA, CS and MBA from
reputed institutions viz., C F Institute of USA and
Institute of Company Secretaries of India, Sikkim
Manipal University, etc. During the year, 177 officers
completed the e-learning programme, “Harvard
Mentor 10” in collaboration with Harvard Business
School, USA.
83. Total staff strength of the Bank as on 31
March 2012 stood at 4552 of which 836 belong to
Scheduled Castes (18.36 %) and 397 to Scheduled
Tribes (8.72%). The staff strength of ex-servicemen
and physically handicapped employees stood at 80
and 88, respectively, constituting 1.7 per cent and 1.9
per cent of the total staff strength.
84. Industrial relations in the Bank continued to
be harmonious during the year. Periodic discussions
were held between the Management and the All India
National Bank Officers’ Association and the All India
NABARD Employees’ Association. Five meetings of
the Grievances Redressal Committee and three
meetings of the Appellate Committee were held during
the year. Twenty one grievances and six appeals were
received, of which 19 grievances and 6 appeals were
processed. The Joint Consultative Committee (JCC)
comprising representatives from Bank Management
and National Bank Officers’ Association, met once
xii
during the year to discuss HR issues.
85. Bank has taken steps in implementing IT
systems as per the IT roadmap. In continuation of the
Bank’s efforts in this direction, in the financial year
2011-12, implementation of Human Resources
Management System (HRMS) and Centralised Loan
Accounting & Management System (CLMAS) was
initiated after due system studies done in previous
financial year.
86. During the year, as on 31 March 2012, the
Audit Committee of the Board (ACB) met four times,
while the Risk Management Committee of the Board
(RMCB) met thrice. The ACB reviewed the internal
inspection/audit function in the institution - the
system, its quality and effectiveness with focus on the
follow-up of major areas of concern in housekeeping.
The RMCB oversaw the functioning of Credit Risk
Management, Asset and Liability Management,
Operational Risk Management and other risks facing
the bank and guided in devising the policy and
strategy for integrated risk management for
containing various risk exposures of the Bank.
Inspection Department continued to monitor defaults
by client institutions and apprise the Top
Management of the status. During the year, ID
conducted Inspection of 9 Regional Offices and 18
Head Office Departments. The concurrent audit of
HO departments, continued to be outsourced to
external auditors, while the Concurrent Audit of all
ROs/Training Establishments were undertaken by the
Concurrent Audit Cells (CAC) set up in the respective
RO/TE. ID also inspected NABARD Subsidiaries, viz.,
Agri Business Finance Ltd, Hyderabad, Agri
Development Finance Ltd, Chennai, NABARD
Financial Services, Bangalore and NABCONS,
Mumbai. The Inspection Reports and Flash Reports
containing major areas of concern were placed before
the MC and ACB for deliberation and guidance.
Visits of Parliamentary Committees
87. During the year, nine Parliamentary
Committees on Subordinate Legislation, Government
Assurances, Agriculture and Official Language for the
Central Government have visited NABARD offices at
Chandigarh, Shimla, Jaipur, Delhi, Guwahati,
Dimapur, Imphal, Kolkata, Port Blair, Chennai, Ranchi,
Patna, Bhopal and Mumbai.
Financial Performance & Management of Resources
88. The financial resources of NABARD increased
to `1,82,075 crore, as on 31 March 2012, registering
an increase of 14.60 per cent, over the previous
financial year. During the year, total market
borrowing of NABARD stood at `43,203 crore,
constituting 23.73 per cent of the total resources of
the Bank.
89. The paid up capital, as on 31 March 2012,
stood at `3,000 crore against `2,000 crore on 31
March 2011, with the share of GoI being 99.33 per
cent and that of RBI at 0.67 per cent. As per Union
Budget 2011-12, Government of India infused `1,000
crore capital in NABARD, which was received on 31
March 2012. The amount of reserves and surplusincreased to `16,408 crore on 31 March 2012 from
`13,863 crore on 31 March 2011.
90. The total income of NABARD during the yearamounted to `10,979 crore as against `9,202 crore forthe year 2010-11. The profit before tax and profit after
tax stood at `2,252 crore and `1,635 crore, respectively,as on 31 March 2012, as compared to `1,824 crore and`1,279 crore, respectively, in the previous year. The
average cost of borrowings (interest expenditure as aper cent of average borrowings) increased from 6.64per cent per annum during 2010-11 to 6.96 per cent per
annum during 2011-12.
1
A. Economic Scenario
a. Gross Domestic Product
The Indian economy continued to be one of
the key drivers of global growth, even with its slower
Gross Domestic Product (GDP) growth at 6.5 per cent
in 2011-12, compared to a growth of 8.4 per cent
achieved in two previous years (Table 1.1). The
slowdown can be partly attributed to global factors
viz., the slowdown in the world economy, exacerbation
of the euro zone crisis, hardening of crude oil prices in
the international market, as well as to domestic
factors, such as the imperatives of dealing with
inflation by tightening monetary policy and cutting
back on the fiscal stimulus. The slowdown is mainly
on account of the sluggishness in industrial sector,
which registered a growth rate of 3.9 per cent in the
I
Rural Economic Environment
Table 1.1: Economic Indicators
Annual per cent change
Particulars 2009-10 2010-11 2011-12
Overall GDP 8.4 8.4 6.5
GDP from Agriculture &Allied Activities 1.0 7.0 (QE) 2.8(RE)
Foodgrain Production (-)7.1 6.8
Industrial Production 10.5 7.8
Inflation as measured by WPI 3.6 9.4
Domestic Savings 33.8 32.3 (as % of GDP)
Capital Formation 36.6 35.1 (as % of GDP)
Fiscal Deficit (as % of GDP) 6.5 4.8 4.6
Imports (% change) (-)5.0 28.2 29.4
Exports (% change) (-)3.5 40.5 23.5
Trade Balance (-)2.8 (-)2.7 (-) 3.6(as % of GDP*)
External Debt 18.1 17.8(as % of GDP*)
QE: Quick Estimates; RE: Revised Estimates;*: At current market pricesSource: Economic Survey 2011-12; CMIE, April 2012; CentralStatistical Organisation, GoI
financial year 2011-12 compared to 7.2 per cent in
the corresponding period of the previous year. The
growth in agriculture was 2.8 per cent, which is much
lower compared to the high level of growth achieved
during the previous year. With growth rate just short of
double digits, service sector continues to be the
mainstay of the economy holding India’s overall
growth together.
1.2 Increasing integration of Indian economy with
the world economy and greater integration of
agricultural sector with the overall economy has
thrown up opportunities as well as challenges for
agriculture, where concerns regarding food security
and the subsidy regime continue to prevail. The sharp
distinction between rural and urban is diminishing and
a kind of rural–urban continuum is emerging,
particularly with service sector occupying the lead in
rural areas. Some of this is captured in the
compositional shift in the consumption pattern in rural
areas. The crux of the matter is that, while
globalisation works through macro parameters, its
impact is felt at the micro level and channels of its
transmission need to be understood and accordingly
responded to.
1.3 Sectoral analysis of growth rates has shown
the least inter-temporal variations. With the declining
share of agriculture sector and consistent growth in
the services sector, the variations in growth rate of
GDP are lately being associated with the variations in
the industry. The contributions of agriculture,
industry and services to the GDP were 13.9, 27.0
and 59.1 per cent, respectively, during 2011-12
(Table 1.2).
1.4 An important feature of agricultural growth,
unlike the overall economic growth pattern, is its
volatility. The State of Indian Agriculture, Ministry of
Agriculture 2011-12 reveals that the coefficient of
variation (CV) of agricultural growth during 2000-01
2
to 2010-11 was 1.6 compared to 1.1 during 1992-93
to 1999-2000. This is almost six times more than the
CV observed in the overall GDP growth of the
country, indicating that high and perhaps increasing
volatility is a real concern. The volatility is likely to
increase in the years to come in the wake of climate
change, there by making it more challenging.
Moreover, the Indian agriculture growth pattern has
been highly varying across states, suggesting that
uniform prescription may not work in propping
agricultural growth as state level occurances measures
up to the overall performance.
b. Consumption, Savings and Investments
1.5 The growth in real terms of consumption
expenditure and gross fixed capital formation works
out to 6.0 per cent and 5.6 per cent respectively for
the year 2011-12. The growth in these indicators in
2010-11 was 8.1 per cent and 7.5 per cent
respectively. The rate of growth of private final
consumption expenditure in real terms has been fairly
consistent and did not decline significantly even
when the growth rate was relatively lower, partly due
to the inherent nature of private consumption that
does not fluctuate as much as other demand-side
components and partly on account of inflationary
tendencies, which tend to reduce savings (on account
of reduction in real interest rates) rather than
affecting the consumption level in the economy.
However, this consistency masks large variations
between the various commodity groups. As against
an overall growth of private final consumption
expenditure that was in the range of 7.1 to 9.2 per
cent during the period 2005-06 to 2010-11, the rates
of growth of the consumption groups food,
beverages, and tobacco and gross rent, fuel, and
power have generally been lower. On the other hand,
the growth rates of items like furniture and
furnishing, transport and communications, and
miscellaneous goods and services have generally
been higher. As a result, the composition of private
final consumption expenditure in terms of shares
underwent changes.
1.6 The Gross Domestic Savings (GDS), as a
proportion to GDP at current market prices (savings
rate) is estimated to have declined from 33.8 per cent
during 2009-10 to 32.3 per cent during 2010-11.
While the private sector savings has declined from
33.6 per cent to 30.6 per cent, public sector savings
increased from 0.2 per cent to 1.7 per cent during
2009-10 and 2010-11, respectively. This decline is
accounted for by a reduction in private savings,
primarily household savings in financial assets, and
somewhat by a reduction in corporate savings. Public
savings, on the other hand, registered an increase,
thanks to fiscal consolidation. The reduction in the
financial savings rate of households could be partly
attributable to inflationary tendencies in the economy
during the period that resulted in higher growth of
private final consumption expenditure than of
personal disposable income and partly to a reduction
in real interest rate. The Gross Capital Formation
Table 1.2: Sectoral Growth Rates of GDP(2004-05 prices)
Sector 2007-08 2008-09 2009-10 2010-11(QE) 2011-12 (RE)
Agriculture & Allied 5.8 (16.4) (-)0.1 (15.7) 1.0 (14.7) 7.0 (14.5) 2.8 (13.9)
Industry# 8.7 (28.8) 4.4 (28.1) 8.4 (28.1) 7.2 (27.8) 3.9 (27.0)
Services 10.3 (54.8) 9.4 (56.2) 10.5 (57.2) 9.3 (57.7) 9.4 (59.1)
GDP at factor cost 9.3 (100.0) 6.7 (100.0) 8.4 (100.0) 8.4 (100.0) 6.9 (100.0)
Figures in parentheses indicate percentage shares in GDP QE: Quick Estimates; RE: Revised Estimates#: Includes mining & quarrying, manufacturing, electricity, gas and water supply and constructionSource: 1. Monthly Economic Report (March 2012), Ministry of Finance, GoI; 2. Economic Survey 2011-12
3
(GCF), as a proportion to GDP, is estimated at 35.1
per cent with the contribution of public and private
sectors at 8.8 and 24.9 per cent, respectively during
2010-11. Within the private sector, the investment
rate for the corporate sector declined from 12.7 per
cent in 2009-10 to 12.1 per cent in 2010-11 while
that of the household sector increased from 12.4 per
cent to 12.8 per cent. Reduction in corporate
investment could be attributed to global factors, with
the global economy exhibiting signs of slowing down
in the second half of 2010 as well as to domestic
factors, namely increased cost of borrowing following
the upward revision of interest rates in order to
control inflation. Fixed investment as a ratio of GDP
peaked in 2007-08 and registered a decline since
then, falling from 31.6 per cent in 2009-10 to 30.4
per cent in 2010-11.
c. Inflation
1.7 Headline year-on-year wholesale price index
(WPI) inflation, after remaining persistently high over
the past two years, has started to show signs of
moderation towards the end of the year 2011-12.
Financial year 2011-12 started with a headline
inflation of 9.7 per cent, briefly touched double digits
in September 2011 before coming down to 6.6 per
cent in January 2012 (Chart 1.1).
i. Drivers of Inflation in Recent Years
1.8 The drivers and the measures to contain
inflation have been extensively analysed and
commented upon in recent times. The analysis showed
that the shift in the nature and causes of inflation in
India is a natural fallout of the structural changes that
the economy has undergone. Both domestic and
global factors determined the inflationary trend.
However, the inflationary pressure in India during the
Table 1.3: Drivers/Causes of Inflation in India
Category Products Immediate/ Medium Term Long Term/ Implicationscovered Short term Structural
Food Foodgrains, Spike in global Demand side drivers- Pricing (MSP) Nutritional security
Inflation fruits & vegetables, food prices increased wages due to Changing Productivity issues
proteins (milk, Weak monsoon MGNREGA consumption pattern Supply chain
eggs, meat, fish) Crop losses Wastages Lack of storage and Management
Supply shock other infrastructure
Core Manufacturing, coal Excess demand Capital stock deficiency Infrastructural Stabilising exchange
Inflation Production Resource constraint bottlenecks rates to smoothen
short fall volatility
Energy Petroleum products, Supply shock Global trends Growing demand Need for finding
Prices crude oil, aviation alternative sources of
fuel etc. energy
The list is illustrative.
4
commodities need to change in favour of the ones
facing the supply shock. The measures adopted to
contain inflation and food inflation are summarised in
the Box 1.1.
d. Trade
1.10 Cumulative value of exports for the period
April-March 2011-12 was `14,54,065 crore as against
`11,42,921 crore over the same period last year,
registering a growth of 27.22 per cent. Cumulative
value of imports for the period April-March, 2011-
12 was `23,42,216 crore as against `16,83,466 crore
over the same period last year, registering a growth of
39.13 per cent. Agricultural exports increased from
`1,13,117 crore during 2010-11 to `1,41,095 crore
during 2011-12, registering a growth of 24.73 per
cent. Increase in agricultural exports has been mainly
year was caused due to the interplay of a number of
immediate and some underlying long term factors
(Table 1.3).
1.9 The analysis also showed that the nature of
inflation was different from the earlier instances of
prolonged inflation, basically because of the kind of
shifts it was pointing towards. Moreover, the
persistent nature of food inflation posed challenges
for policy makers as monetary policy cannot have a
direct and immediate bearing on food prices. But in
view of the prolonged inflationary spells in recent
years, using the monetary policy weapon was thought
to be the appropriate policy response in order to
prevent and control the spillover of the supply shock
in food prices into a generalised inflationary pressure
in the economy. In order to keep inflation under
check, relative prices across categories of
Box 1.1: Measures adopted to Contain Inflation and Food Inflation
A. Fiscal and Administrative Measures
• Reduction of import duties (for rice, wheat, onion,
pulses, edible oils).
• Permitting import of certain products (viz., skimmed
milk powder and other dairy products, duty free white/
refined sugar).
• Removal of levy obligation in respect of all imported
raw sugar and white/refined sugar.
• Ban on export of edible oils and pulses (with certain
exceptions), non-basmati rice, wheat, onion (for short
period of time),milk powders, casein and casein
products.
• Permitting export of edible oils in branded consumer
packs of up to 5 kg subject to a limit of 10,000 tonnes.
• No change in tariff rate values of edible oils. Exports of
onion calibrated through the mechanism of minimum
export prices (MEP).
• Maintaining the central issue price (CIP) for rice
(a t `5.65 per kg for below poverty line (BPL) and `3
per kg for Antyodaya Anna Yopjana (AAY)) and wheat(a t `4.15 per kg for BPL and `2 per kg for AAY)since 2002.
• Suspension of futures trading in rice, urad, and tur.
• Allocation of wheat and rice under the Open MarketSale Scheme (OMSS),bulk sale, for distribution to BPLfamilies at BPL issue price and for above poverty line(APL) families.
• Extension of the Scheme for distribution of subsidisedimported edible oils through state governments/UTs
B. Monetary Measures
As part of the monetary policy review stance, the RBI hastaken suitable steps with 13 consecutive increases in policyrates and related measures to moderate demand to levelsconsistent with the capacity of the economy to maintain itsgrowth without provoking price rise. As per the most recentannouncement of the RBI on 24 January 2011, the cashreserve ratio (CRR) has been cut by 50 basis points (bps)from 6.0 per cent to 5.5 per cent and repo rate and reverserepo rate have remained unchanged at 8.5 per cent and7.5 per cent respectively.
(Source: Economic Survey 2011-12)
5
due to higher exports of basmati rice, unmanufactured
tobacco, meat and meat preparations, castor oil and
tea. The percentage share of agriculture and allied
products in the total exports was 9.9 during 2011-12
as compared to 10.0 in 2009-10. The share of food &
allied product imports in the total imports of the
country also increased from 2.19 per cent in 2010-11
to 3.1 per cent in 2011-12 (Table 1.4).
B. Agriculture & Rural Economy
a. Structural changes in agriculture
1.11 The developments in the agriculture sector,
during the year under report, can also be related to
the longer term structural changes taking place in
agriculture. The structural changes that occurred
during the two agricultural censuses (2001-02 &
2005-06) further accentuated the predominance of
“small farming” as reflected by an increase of 10
million operational holdings within just five years with
no rise in the net cropped area. In fact, going by the
trend, another 10 million operational holdings might
have been added, putting pressure on the average
area operated per farmer (holding) which was 1.23
hectares in 2005-06.
1.12 Another feature of this structural shift has
been the rise in the area operated by small farmers
(<2ha). Small farmers who form 83 per cent of the
numbers, now operate about 41 per cent of the total
area indicating that the base of Indian agriculture is
small. Available estimates suggest that small holders
contribute about 51 per cent of the value of
agriculture output and contribute significantly to food
security. Therefore, ensuring that the small holders do
not get marginalised and excluded from the benefits of
the growth process is the biggest challenge today.
Making them participate in the growth process not
merely in the production stage but in the post
production stage also will be necessary to include
them, meaningfully.
b. Making Small Farmer participate
1.13 The shift towards consumer-driven markets
which is an integral element of market liberalisation
and globalisation means that the small farmer is
increasingly being asked to compete in markets that
demand much more in terms of quality and food
safety. As small farms tend to diversify into higher-
value products, they must increasingly meet the
requirements of these demanding markets, both at
home and overseas- these changes offer new
opportunities and pose serious threats to small
farmers. In the changed policy environment there is an
urgent need to create and facilitate institutions like the
Producers Organisations and other such arrangements,
which can aid/ensure the transition of small farmers
with the working of the market.
c. Rainfall situation
1.14 The country as a whole received 899.9 mm of
rainfall, which was 1.0 per cent more than the Long
Period Average (LPA) during the South-West monsoon
(June-September) 2011 as compared to 2.0 per cent
less than the LPA in the corresponding period last
year. Central India and North-West India experienced
excess rainfall over the LPA by 10.0 per cent and 7.0
per cent respectively. The southern peninsula received
normal rainfall. North-East India received 14 per cent
Table 1.4: Trends in Exports and Imports
(`’000 crore)
Year Total Share of Total Share of foodExports agri allied Imports & allied
products (%) products(%)
2005-06 456.4 10.2 660.4 3.3
2006-07 571.8 10.3 840.5 3.5
2007-08 655.9 9.9 1012.3 3.0
2008-09 840.8 9.0 1374.4 2.1
2009-10 845.5 10.0 1363.7 3.7
2010-11 1142.6 9.9 1683.5 2.9
2011-12 1425.2 9.9 1677.4 3.1
Source: Economic Survey, Various Issues, Ministry of Commerce& Industry, GoI, CMIE, April 2012.
6
d. Crop production
1.16 For five consecutive years, from 2004-05 to
2008-09, foodgrains production recorded an increasing
trend. However, it declined to 218.11 million tonnes in
2009-10 due to severe drought conditions in various
parts of the country. Normal monsoon in the
subsequent year, 2010-11, helped the country reach a
significantly higher level of 244.78 million tonnes of
foodgrains production. As per the third Advance
Estimates, production of foodgrains during 2011-12 is
estimated at an all time record level of 252.56 million
tonnes which is a significant achievement mainly due
to increase in the production of rice and wheat.
1.17 There has been a decline in overall area under
foodgrains during 2011-12 as compared to 2010-11.
The area coverage under foodgrains during 2011-12
stood at 1,254.92 lakh ha compared to 1267.65 lakh
ha last year. The lower area under foodgrains has
been due to a shortfall in the area under jowar in
Maharashtra, Rajasthan and Gujarat; bajra in
Maharashtra, Gujarat and Haryana; and in pulses in
Maharashtra, Uttar Pradesh, Andhra Pradesh and
Rajasthan. Moreover, the area under coarse cereals
and oilseeds has also come down as compared to the
previous year. The area coverage under rice during
2011-12 was around 444.06 lakh ha which was 15.44
lakh ha more than the previous year. The area
coverage under sugarcane during the current year has
slightly improved to 50.81 lakh ha, higher by about
1.96 lakh hectares as compared to the previous year
and the area under cotton has increased significantly
to 121.78 lakh ha as compared to 112.35 lakh ha
during 2010-11. An analysis of trends in indices of
area, production, and yield of different crops during
the period from 1980-81 to 2011-12 (base triennium
ending (T.E.) 1981-82=100) indicates a mixed picture
(Table 1.6). There is a need for renewed research
efforts to boost production and productivity of food
grain crops against the backdrop of plateauing growth
less rainfall than the LPA. At disaggregated level, 24
per cent of the districts received excess rainfall, 52 per
cent normal rainfall, 23 per cent deficient rainfall, and
1 per cent received scanty rainfall. Out of the 36 sub-
divisions, 3 recorded deficient rainfall during the
South-West monsoon in 2011. Out of the 33
remaining subdivisions, 7 recorded excess rainfall and
the remaining 26 recorded normal rainfall
(Table 1.5).
1.15 The total designed storage capacity at full
reservoir level (FRL) of 81 major reservoirs in the
country monitored by the Central Water Commission
(CWC) is 151.77 billion cubic meters (BCM). At the
end of monsoon 2011, the total live storage in these
reservoirs was 131.076 BCM, which was more than
the live storage of 115.23 BCM at the end of
monsoon 2010 and 102.759 BCM, which is the
average of the last 10 years. Thus, by and large the
rainfall situation and availability of water in the major
reservoirs was normal. However, given the vagaries of
the monsoon, augmenting irrigation potential is key to
sustained growth in agriculture.
Table 1.5: Trends in Rainfall and Water Storage
Particulars South-West Monsoon*
2009 2010 2011
A. Cumulative rainfall(% variation from normal) (-)23 2 1
B. Number of Sub- Divisionswith Normal/ Excess Rainfall 13 31 33
Deficient/Scanty/No Rainfall 23 5 3
C. Reservoir status 58.6 75.4 86.4(% of FRL$@)
Normal: +/-19%; Excess: +20% or more; Deficient: -20 to-59%; Scanty: -60% or less; No Rain: -100%
* : Cumulative position between 1 June and 30 September;
$ : Full Reservoir Level in 81 major reservoirs (accounting for67% of total reservoir capacity in the country) as at theend of the season
@: As on 30 September in the case of SW Monsoon and 31December in the case of NE Monsoon
Source: Indian Meteorological Department, Economic Survey,Various Issues, CMIE April 2012
7
Table 1.6: Compound Growth Rates of Area, Production, and Yield of Principal Cropsduring 1980-1990, 1990-2000 and 2000-2012
(Base: TE 1981-82=100)
1980-81 to 1989-90 1990-91 to 1999-2000 2000-01 to 2011-12*
Area Production Yield Area Production Yield Area Production Yield
Rice 0.41 3.62 3.19 0.68 2.02 1.34 0.04 1.72 1.68
Wheat 0.46 3.57 3.10 1.72 3.57 1.83 1.22 2.37 1.14
Coarse Cereals (-)1.34 0.40 1.62 (-)2.12 (-)0.02 1.82 (-)0.75 3.01 4.39
Total Pulses (-)0.09 1.52 1.61 (-)0.60 0.59 0.93 1.70 3.47 1.91
Sugarcane 1.44 2.70 1.24 (-)0.07 2.73 1.05 1.37 1.96 0.58
Total Oilseeds 1.51 5.20 2.43 (-)0.86 1.63 1.15 2.08 4.45 3.39
Total Foodgrains (-)0.23 2.85 2.74 (-)0.07 2.02 1.52 0.43 2.32 2.91
Source : Department of Agriculture and Cooperation.*: Growth rates are based on the second advance estimates (AE) 2011-12 released on 03 February 2012; Total oilseeds include nine oilseeds, cotton seedand coconut.
rate in yield levels of rice and wheat and growing
popularity of coarse cereals and pulses as nutri-food.
Both public and private-sector investment in research
and development (R&D) in these crops needs to be
encouraged.
e. Aligning agricultural production withthe consumption basket
1.18 With the spread of urbanisation and the
economy growing in the range of 7-8 per cent, there
has been a shift in the demand from cereals to non-
cereal food like pulses, edible oils, fruits, vegetables,
dairy, meat and fish, which now account for
approximately 70 per cent of the WPI basket for
primary food items. An examination of food
consumption expenditure in the country during the
period from 1987-88 to 2009-10 clearly reveals that
there has been a shift in expenditure towards milk and
milk products, egg, fish, meat and vegetables both in
rural and urban areas; whereas, the share of
consumption of cereals in the total food basket has
gone down. The recent food inflation episodes have
been attributed to the constraints in increasing the
supply of these commodities as compared to their
demand. This has led to an increasing pressure on
their prices. As the agricultural production basket is
still not fully aligned with the emerging demand
patterns, it is raises a lot concern especially
considering its bearing on inflation.
1.19 Some of the short-term, medium-term and
long-term measures that could be undertaken to
achieve higher production and productivity in the
agriculture sector, to ensure that the higher demand
for food items is met, include measures related to
supply response, storage, and marketing (Box 1.2).
f. Inputs use in Agriculture
i. Seeds
1.20 Farmers generally need a genetically diverse
portfolio of improved crop varieties that are suited to
a range of agro-ecosystems and farming practices and
resilient to climate change. The Indian Seed
Programme involving Central/State Governments,
Indian Council of Agricultural Research, State
Agricultural Universities, Co-operatives and private
sector has been addressing the issue of low seed
replacement rate. Besides, the scheme for
‘Development and Strengthening of Infrastructure
Facilities for Production and Distribution of Quality
Seeds’ is being implemented since 2005-06 to ensure
timely availability of quality seeds at affordable prices
to farmers. During 2010-11, 277.3 lakh quintals of
8
Table 1.7: Requirement & Availability of Seeds in India
(lakh quintal)
Year Requirement Availability Surplus (+)/Deficient (-)
2007-2008 180.74 194.31 +13.57
2008-2009 207.28 250.35 +43.07
2009-2010 249.12 279.72 +30.60
2010-2011 290.76 321.36 +30.60
2011-2012 330.41 353.62 +23.21
Source: Department of Agriculture and Cooperation (DAC), SeedsDivision, GoI.
• Given the compositional shift in food basket of acommon household and its impact on consumptiondemand, improved supply response is critical forensuring price stability in food items.
• Extension programmes and guidance to farmersregarding fertilizer and insecticide usage and alternatecropping pattern based on soil analysis could beundertaken and intensified.
• As a strategy, regular imports of agriculturalcommodities in relatively smaller quantities with anupper ceiling on total quantity could be considered.The upper ceiling can be decided annually, relativelywell in advance, after assessing the likely domesticsituation in terms of production and consumptionrequirements.
• Setting up special markets for specific crops in states/regions/areas producing those crops would facilitatesupply of superior commodities to the consumers.
• Mandi governance is an area of concern. A greaternumber of traders must be allowed as agents in themandis. Anyone who gets better prices and terms
outside the Agricultural Produce Marketing Committee(APMC) or at its farm gate should be allowed to do so.For promoting inter-state trade, a commodity for whichmarket fee has been paid once must not be subjectedto subsequent market fee in other markets includingthat for transaction in other states. Only user chargeslinked to services provided may be levied forsubsequent transactions.
• Perishables could be taken out of the ambit of theAPMC Act. The recent episodes of inflation invegetables and fruits have exposed flaws in our supplychains. The government-regulated mandis sometimesprevent retailers from integrating their enterprises withthose of farmers. In view of this, perishables may haveto be exempted from this regulation.
• Considering significant investment gaps in post-harvestinfrastructure of agricultural produce, organised trade inagriculture should be encouraged and the FDI in multi-brand retail once implemented, could be effectivelyleveraged towards this end.
• Government should step up creation of modern storagefacilities for food grains.
Box 1.2: Supply-side Constraints
certified/ quality seeds were distributed. Breeder seed
production and foundation seed production reached
1.19 lakh quintals and 17.53 lakh quintals, respectively
during 2010-11, registering 13.53 and 7.8 per cent
growth over the previous year. The requirement and
availability of certified seeds during the last five years
are given in the Table 1.7. Some important measures
to strengthen the seed sector include, improving
policies and legislation for variety development and
release as well as seed supply; enactment of flexible
variety release legislation, strengthening capacity by
creating a new generation of skilled practitioners to
support enhanced breeding; working with farmers to
explore the ways in which crops and varieties
contribute to successful intensification; revitalising the
public sector and expanding its role in developing new
crop varieties; supporting the emergence of local,
private sector seed enterprises through an integrated
approach involving producer organisations; linkages to
markets and value addition, etc.
ii. Chemical fertilizers
1.21 Chemical fertilizers have played a significant
role in the development of the agricultural sector. Both
production and consumption of chemical fertilizers has
steadily increased over the years (Table 1.8). Under
Source: Economic Survey 2011-12
9
the Nutrient Based Subsidy (NBS) Policy, a fixed
subsidy is announced on per kg basis of nutrient
annually. An additional subsidy is also given for micro-
nutrients. With the objective of providing a variety of
subsidized fertilizers to farmers depending upon soil
and crop requirements, the government has included
seven new grades of complex fertilizers under the
NBS. Under this scheme, manufactures/marketers are
allowed to fix the maximum retail price (MRP).
Farmers pay only 50 per cent of the delivered cost of
P and K fertilizers, the rest is borne by the
Government of India in the form of subsidy.
iii. Irrigation
1.22 Water, a natural resource, is critical in the
context of increasing productivity and income
stabilization at the micro level and ensuring food
security at the macro level. India, currently, has an
overall irrigation potential of 140 million ha, out of
which only about 109 million ha have been created,
and around 80 million ha utilised. Gross irrigated
area as a per cent of Gross cropped area has
increased from 34 per cent in 1990-91 to 45.3 per
cent in 2008-09. However, there are wide variations
in irrigation coverage across states and across crops.
Flagging efficiency levels of public surface irrigation
schemes is causing a lot of concern and perhaps
urgent institutional reforms, better management and
maintenance only can hold the deteriorating
performance. It may involve engaging water user
associations and even by unbundling the large
surface schemes into storage (dams), transmission
(main canals) and retail distribution of water
(distribution at the farmer level). Groundwater
irrigation, which is a biggest source of irrigation
today, suffers from over-exploitation in most of the
states. Excessive dependence on groundwater for
irrigation purposes has several implications like steep
decline in the groundwater table, drying up of a huge
number of wells, low well productivity, rapid rise in
well and pumping depths, deteriorating groundwater
quality and salinity ingress in many areas. Free or low
pricing of power for irrigation has primarily
contributed to this problem. Major reforms in the
power sector, improvement in the quality of power
and availability of power are a precondition for
improving the overall groundwater situation in
the country.
1.23 The Government of India has taken up
augmentation of irrigation potential through public
funding and is assisting farmers to create potential on
their own farms. Substantial irrigation potential has
been created through major and medium irrigation
schemes. The central government initiated the
Accelerated Irrigation Benefit Programme (AIBP) from
1996-97 for extending assistance for the completion of
incomplete irrigation schemes. Under this programme,
projects approved by the Planning Commission are
eligible for assistance. Under the AIBP, `50,380.64
crore of central loan assistance (CLA)/grant has been
released up to 30 November 2011. As on 31 March
Table 1.8: Production and consumption of fertiliser
Production of Urea, DAP andComplex Fertilizers
(lakh tonnes)
Year 2009-10 2010-11 2011-12
Urea 211.12 218.80 222.88
Di-ammo-iumphosphate 42.46 35.37 39.41
Complex fertilizers 80.38 87.27 90.69
Per Hectare Consumption ofFertilizers in Nutrient Terms
(kg)
Nitrogenous (N) 150.90 155.80 165.58
Phosphatic (P) 65.06 72.74 80.50
Potassic (K) 33.13 36.32 35.14
Total (N+P+K) 249.09 264.86 281.22
Per hectare consumption 127.2 135.76 144.14
Source: Department of Fertilizers. Ministry of Chemicals & Fertilizers,Directorate of Economics and Statistics, Department of Agriculture and
Cooperation (DAC), GoI.
10
Table 1.9: Agency-wise Ground level Credit Flow
(` crore)
Agency 2007-08 2008-09 2009-10 2010-11 2011-12 @ Growth Rate (%) @
2007-11 # 2010-11 ^ 2011-12 ^
Co-op 48258 45966 63497 78007 86185 18.40 22.85 10.48
RRBs 25312 26765 35217 44293 54239 22.48 25.77 22.46
CBs 181088 228951 285800 345877 368616 20.13 21.02 6.57
Total 254658 301908 * 384514 468291 ** 509040 20.01 21.79 8.70
#: Compound Annual Growth Rate; ^: Percentage change over the previous year. * Includes `226 crore by other agencies**: includes `114 crore by other agencies @: provisionalSource: NABARD
2011, 290 projects were covered under the AIBP and
134 completed. During 2010-11, an irrigation
potential of 566.24 thousand ha is reported to have
been created by states, from major/medium/minor
irrigation projects under the AIBP. While the higher
irrigation potential would help to augment production
and productivity, assured remuneration from such
production is vital for development of agriculture.
iv Rain-fed agriculture
1.24 Sixty-five per cent of agriculture in India is
undertaken in dry land and resource poor regions,
which require perhaps a completely different
orientation and approach. This is especially critical in
the context of food security. As the emphasis has been
largely on research and solutions for irrigated
agriculture, priority needs to be given for building up
greater understanding and creating a framework for
development of rainfed agriculture and farmers
depending on such land. These regions are home to
majority of small and resource poor farmers.
v. Credit
1.25 As against the target of `4,75,000 crore credit
flow to agriculture for 2011-12, the banking system
disbursed `5,09,040 crore as on 31 March 2012,
achieving 107.2 per cent of the target. Commercial
Bank (CB), Co-operative banks and Regional Rural
Bank (RRB) disbursed `3,68,616 crore, `86,185 crore
and `54,239 crore, respectively, sharing 72 per cent,
17 per cent and 11 per cent of the total credit flow
during 2011-12 (Table 1.9).
1.26 During the period 2007-11, the GLC flow for
agriculture and allied activities registered a Compound
Annual Growth Rate (CAGR) of 20.01 per cent. The
growth rate in short term credit flow and term loans
were 24.52 per cent and 12.11 per cent, respectively
for the five-year period (2006-07 to 2010-11). Sub
sector-wise, during 2010-11; High-tech agriculture
witnessed the highest annual growth of 62.95 per cent,
followed by Farm Mechanisation (25.36%), Animal
Husbandry (24.49%) in GLC flow over 2009-10
(Table 1.10).
g. Agricultural Production
i. Foodgrains & Non-foodgrains
1.27 According to the 3rd Advance Estimates, the
country’s foodgrain production during 2011-12 was
estimated at 252.56 million tonnes as compared to
244.78 million tonnes (final estimate) during 2010-11,
registering an increase of 3.2 per cent over the
previous year. Overall, agriculture sector is expected to
achieve a modest growth of 2.4 per cent in 2012-13.
Livestock, forestry and fishing are expected to do well,
while minor crops production is estimated to rise by
4.0 per cent. However, output of major crops is
11
Table 1.10: Sub-sector-wise Ground Level Credit Flow for Agriculture & Allied Activities
(` crore)
Sl Sector/Sub-Sector 2006-07 2007-08 2008-09 2009-10 2010-11 Growth rate (%)No. 2006-11 ^ 2010-11*
I. Crop Loan 138455 181393 210461 276656 335550 24.52 21.29(ST-Production Credit)
II. Term Loans 90945 73265 91447 107858 132741 12.11 23.07(MT & LT Investment Credit)
i. Minor Irrigation 8566 2840 3180 5197 4363 (-)7.18 (-)16.05
ii. Land Development 2285 2553 2887 3669 3615 13.66 (-) 1.47
iii. Farm Mech 10113 8303 8334 10211 12800 7.02 25.36
iv. P & H 5266 5910 6045 6407 6610 5.50 3.17
v. Animal Husbandry 8045 9034 10398 10260 12773 11.09 24.49
vi. Fisheries 1424 1248 1281 1854 1931 10.57 4.15
vii. Hi-tech agriculture 21498 33325 41694 50797 82774 36.59 62.95
viii. Others$ 33748 10052 17628 19463 7875 (-)20.15 (-)59.54
Total (I + II) 229400 254658 301908 384514 468291 20.19 21.79
Source: NABARD $ : Others include storage/market yards,forestry/waste land development, RIDF, bullock and bullock cartsand bio-gas^: Compound Annual Growth Rate; *: Percentage change over the previous year.
projected to decline marginally by 0.6 percent in
2012-13, mainly because of a fall in output of non-
food crops. Production of non-food crops is projected
to fall by 1.6 per cent in 2012-13, owing to lower
output of cotton and sugarcane. During the year
2011-12, production of all the crops is estimated to be
higher, the maximum increase being for cotton at
40.04 per cent followed by oilseeds (21.58%), coarse
cereals (19.85%), pulses (18%), sugarcane (16.5%)
and wheat (4.29%) (Table 1.11).
ii. Plantation crops
1.28 Tea production in the country during 2010-11
has been estimated at 9.66 lakh tonnes as against 9.91
lakh tonnes achieved in 2009-10. Further, the export
of tea from India during 2010-11 was 1.78 lakh tonnes
as against 2.13 lakh tonnes in 2009-10. The estimated
import of tea into India during 2010-11 was valued at
`186.82 crore, which was lower by `27.62 crore
compared to the previous year.
1.29 Coffee is cultivated in an area of around 4.0
lakh ha mainly confined to Southern India. The
estimated coffee production for the year 2011-12 is
3.02 lakh tonnes, i.e., 0.97 lakh tonnes of Arabica and
2.05 lakh tonnes of Robusta.
Table 1.11: Production of Major Crops
(Million tonnes)
Year/Crops 2009-10 2010-11 2011-12E 2012-13F 2011-12(% change)
Foodgrain 218.1 244.8 252.6 251.8 3.2of which
Rice 89.1 96.0 99.8 100.4 4.0Wheat 80.8 86.9 91.1 87.3 4.8Coarse Cereals 33.5 43.7 42.0 42.3 (-)3.6Pulses 14.7 18.2 17.5 17.7 (-)3.7
Non-food crops 24.9 32.5 31.2 32.1 (-)4.3
Major oilseedsof which
Groundnuts 5.4 8.3 6.9 8.0 (-)17.1Soyabeans 10.0 12.7 13.1 12.8 2.8Rapeseed &Mustard 6.6 8.2 7.6 7.6 (-)6.6Cotton# 24.0 33.0 35.0 32.2 5.9Sugarcane 292.3 342.4 345.7 342.5 1.0Jute & Mesta* 11.8 10.6 11.6 11.7 10.2
E: 3rd Advance Estimates; F: Forecast;#: Million bales of 170 kgs each; *: Million bales of 180 kgs each;Source: CMIE, April 2012, Agricultural Statistical Division, Ministry ofAgriculture, Government of India; Economic Survey 2011-12
12
1.30 India is the fourth largest producer of natural
rubber (NR) with a share of 8.2 per cent in world
production in 2010. The production of NR in
2011-12 is projected at 9.02 lakh tonnes, an increase
of 4.6 per cent over 2010-11. India continues to be
the second largest consumer of NR with 8.8 per cent
share of world consumption in 2010. Consumption of
NR in 2011-12 is projected at 9.77 lakh tonnes, an
increase of 3.1 per cent over the previous year.
Despite not having regions geographically best suited
to growing natural rubber, India continued to record
the highest productivity in the world with an average
yield of 1,867 kg/ha. The production of Rubber
(natural & synthetic) was 9.08 lakh tonnes during
2010-11 (April-February) as against 9.38 lakh tonnes
during 2009-10. During 2010-11 (April-February), the
estimated export of natural rubber was 29,851 tonnes
against an import of 1,71,282 tonnes (Table 1.12).
iii. Horticulture Crops
1.31 Development of horticulture has been
recognised as the avenue for diversification in
agriculture, addressing nutritional security, enhance
employment opportunities and providing export
earnings. Among the various horticulture crops, fruits
and vegetables form the single largest sub-sector
constituting about 92.3 per cent of the total
horticultural production in the country. Schemes for
horticultural development include National
Horticulture Mission, National Bamboo Mission,
Schemes of the National Horticulture Board and
Integrated Development of Coconut.
1.32 The National Horticulture Mission (NHM),
under implementation in 372 districts of the country,
aims to promote holistic development of the
horticulture sector through area based and regionally
differentiated strategies. Under the scheme, a total
area of 16.57 lakh ha has been brought under
horticulture crops and an expenditure of `4,125.43
crore had been incurred upto 2009-10. Area and
production under horticulture crops increased from
20.7 million ha and 214.7 million tonnes, respectively
during 2008-09 to 20.9 million ha and 223.1 million
tonnes, respectively during 2009-10 (Table 1.13).
h. Agriculture and Allied Sector
1.33 Agriculture and allied activities contributed for
14.6 per cent of GDP in 2010-11 with Agriculture
accounting for 12.3 per cent, followed by forestry and
logging at 1.5 per cent and fishing at 0.8 per cent.
i. Livestock and Poultry
1.34 Livestock sector plays a critical role in the
welfare of India’s rural population. It contributes 9.0
per cent to GDP and employs 8.0 per cent of the
labour force. This sector is emerging as an important
growth leverage of the Indian economy. As a
component of agricultural sector, its share in GDP has
been rising gradually, while that of the crop sector has
Table 1.12: Production, Consumption and Exports of Major Plantation Crops (lakh tonnes)
Year Tea Coffee Rubber
Production Consumption Exports Production Consumption Exports Production Consumption Exports
2006-07 9.73 7.71 2.18 2.88 0.85 2.49 9.52 10.91 0.57
2007-08 9.87 7.86 1.85 2.62 0.90 2.19 9.31 11.58 0.60
2008-09 9.73 8.02 1.90 2.62 0.94 1.97 9.61 11.64 0.47
2009-10 9.91 7.70 2.13 2.90 0.94 1.95 9.38 12.43 0.25
2010-11* 9.66 NA 1.78 2.99 0.94 3.22 9.08 $ 12.78 $ 0.29
NA: Not Available *: Estimated $: April 2010-February 2011Source: Ministry of Commerce and Industry, GoI. Coffee Board, Tea Board and Rubber Board
13
Table 1.13: Area and Production of Major Horticulture Crops (Area in million ha and production in million tonnes)
Year Area Total Production Total
Fruits Vegetables Flowers Horticulture Fruits Vegetables Flower Horticulture
2005-06 5.3 7.2 0.1 18.7 55.4 110.1 0.7 181.82006-07 5.6 7.5 0.1 19.4 59.6 115.0 38.0 191.82007-08 5.8 7.8 0.2 20.2 65.6 129.3 44.5 211.22008-09 6.1 7.9 0.2 20.7 68.4 129.1 47.9 214.72009-10* 6.3 7.9 0.2 20.9 71.5 133.7 66.7 223.1
*: 3rd Advance EstimatesSource: Agricultural Statistics at a glance; various issues, NHB
been on the decline. In recent years, livestock output
has grown at a rate of about 5.0 per cent a year,
higher than the growth in agricultural sector. This
enterprise provides a flow of essential food products,
draught power, manure, employment, income, and
export earnings. Distribution of livestock wealth is
more egalitarian, compared to land. Hence, from the
equity and livelihood perspective, it is considered as
an important component of poverty alleviation
programmes.
1.35 During 2010-11, the livestock sector
contributed to 5.1 per cent of GDP and 28.0 per cent
value of output from agriculture and allied activities.
As per the 18th Livestock Census 2007, the livestock
and poultry population in the country were 529.7
million and 648.8 million, respectively. The per capita
availability of milk increased from 258 grams per day
to 263 grams per day due to increase in milk
production in the country by 3.68 per cent during
2010-11 over 2009-10. The per capita availability of
eggs has been around 51 per annum during 2010-11.
ii. Fisheries
1.36 The fisheries sector contributed 0.7 per cent of
total GDP at factor cost and 5.0 per cent of GDP at
factor cost from agriculture, forestry, and fishing in
the year 2010-11 (QE). Fish production increased
from 3.8 million tonnes in 1990-91 to 8.29 million
tonnes in 2010-11. Fishing, aquaculture, and allied
activities are reported to have provided livelihood to
over 14 million people in 2010-11, apart from being a
major foreign exchange earner.
i. Agro and Food Processing Sector
1.37 Agro and Food Processing sector is regarded
as the promising sector of the Indian economy in view
of its large potential for growth and its socio economic
impact specifically on employment and income
generation. Agro processing helps in better utilization
and value addition of agricultural produce. The Vision
Document 2015 by Ministry of Food Processing
Industries has set a challenging target of trebling the
size of processed food sector by 2015 through
appropriate enabling policies. The export of processed
foods including processed fruits and juices increased
from `3,176 crore during 2008-09 to `3,255 crore
during 2009-10.
j. Agricultural Marketing and CommodityFutures
1.38 Seventeen States/Union Territories have
amended their Agricultural Produce Marketing
Committee (APMC) Acts for agricultural market
reforms. Initiatives have been undertaken by GoI for
setting up terminal market complexes for fruits,
vegetables and other perishables in States that have
amended their APMC Acts. Agricultural Marketing
Information Network (AGMARKNET) provides internet
connectivity to agricultural markets for establishing
information network of prices and other market related
information. Agricultural commodities valued at
14
`8,614.58 crore and `306.65 crore were certified
under ‘Agmark’ for domestic trade and exports,
respectively during 2009-10 as compared to `7,865.25
crore and `241.08 crore for the same during 2008-09.
1.39 Agriculture commodity futures market includes
21 commodity exchanges in the country. The value of
total trade in commodity futures market increased from
`77,64,754 crore in 2009-10 to `119,48,942 crore in
2010-11 recording a growth of 53.86 per cent during
the period. The value of agricultural commodities as a
proportion to total trade in commodity futures market
decreased from 15.68 per cent in 2009-10 to 12.18
per cent in 2010-11.
k. Capital Formation
1.40 The share of Gross Capital Formation (GCF)
of agriculture & allied sector in total GCF has hovered
between 6 to 8 per cent; whereas, it was around 18
per cent during the early 1980s, implying that the non-
agriculture sectors are receiving higher investment as
compared to agriculture & allied sector over the plan
periods resulting in growth disparities (Chart 1.2).
Though this is in line with the overall falling share of
agriculture in the overall GDP and also conforms to
the development process observed elsewhere in the
developing world, keeping in view the high population
pressure on agriculture for their sustenance, there is a
need for substantial increase in investment in
agriculture. Capital formation in agriculture (`1,42,254
crore in 2010-11) now primarily rests on the private
investment. But considering that public investment
has an enabling effect on private investment, the
stagnant share of public investment is a concern.
1.41 The investment rate in agriculture, as reflected
in the ratio of GCF in agriculture as a percentage to
agri-GDP, however has substantially improved in the
last decade which is a positive sign. In percentage
terms in 1997-98 (beginning of ninth plan) it was 8.6
per cent which increased to 20.3 per cent in 2010-11
(Chart 1.3).
l. Composition of investment
1.42 While public investment in agriculture is
critical and has a vital, enabling impact on the
private sector investment, it forms not more than
about 20 per cent of the total investment in
agriculture. This means that it is the private sector
investment which is mainly holding the agriculture
growth together. Implications for sustaining this position
are critical, especially when we keep in mind that the
private sector response would be better to a more
reformed incentive structure.
15
m. Kisan Credit Card Scheme
1.43 Kisan Credit Card (KCC) scheme introduced
in 1998-99 has facilitated the flow of credit to farmers.
During 2011-12, 10.07 million KCC were issued by
banks with sanctioned credit limit of `54,269 crore. Of
the cumulative 113.91 million Kisan credit cards issued
as at the end December 2011, CBs issued 53.06
million cards (46.58%), followed by Co-operative
Bank, 43.66 million cards (38.33%) and by RRBs
17.19 million cards (15.09%) (Table 1.14).
n. Agricultural Debt Waiver and DebtRelief Scheme
1.44 The Scheme of Agricultural Debt Waiver and
Debt Relief (ADWDR) for farmers was announced in
the Union Budget 2008-09 to address the
indebtedness of farmers and difficulties of the farming
community, especially small and marginal farmers.
NABARD implemented the Scheme as the nodal
agency for co-operative banks and RRBs. About
192.59 lakh farmer borrowers of co-operative banks
and RRBs are estimated to have benefited under the
Scheme, of which small and marginal farmers,
constituting 83.5 per cent, were the major
beneficiaries. Out of `29,240.12 crore received under
the Agriculture Debt Waiver and Debt Relief Scheme
2008, the cumulative disbursements by NABARD was
`29,099.33 covering 1.88 crore accounts of the
farmer. The share of State Co-operative Bank (SCB),
State Co-opetative Agriculture and Rural Development
Bank (SCARDB) and RRBs stood at `18,282.30 crore,
`3,843.37 crore and `6,973.66 crore, respectively.
o. Interest Subvention Scheme
1.45 For encouraging timely and prompt repayment
of crop loans, additional subvention of 3 per cent was
Table 1.14: Agency-wise, Year-wise KisanCredit Cards Issued(As on 31 March 2012)
(million)
Year Co-operative Regional Commercial TotalBanks Rural Banks Banks
2006-07 2.29 1.41 4.81 8.51
2007-08 2.09 1.77 4.61 8.47
2008-09 1.34 1.42 5.83 8.59
2009-10 1.75 1.95 5.31 9.01
2010-11 2.81 1.77 5.58 10.16
2011-12* 2.96 1.99 5.12 10.07
Cumulative# 43.66 17.19 53.06 113.91
*: Data for commercial banks available up to 31 December 2011#: Since inception of the Scheme, i.e., August 1998
16
announed to those farmers who would repay crop loans
promptly within one year of disbursement. Aggregate
interest subvention of `1,688.62 crore and `2,097.94
crore in 2009-10 and 2010-11, respectively, was
provided by GoI. The Interest subvention for 2011-12
has been estimated at `3,000 crore.
p. Agricultural Insurance
1.46 With the aim of further improving crop
insurance schemes, the Modified National Agricultural
Insurance Scheme (MNAIS) is under implementation
on pilot basis in 50 districts in the country from rabi
2010-11 season. Some of the major improvements
made in the MNAIS are actuarial premium with
subsidy in premium at different rates, all claims liability
to be on the insurer, unit area of insurance reduced to
village panchayat level for major crops, indemnity for
prevented/sowing/planting risk and for post-harvest
losses due to cyclone, on account payment up to 25
per cent advance of likely claims as immediate relief,
more proficient basis for calculation of threshold yield,
and allowing private sector insurers with adequate
infrastructure. Only upfront premium subsidy is
shared by the central and state governments on
50:50 basis and claims are the liability of the
insurance companies. The scheme has been notified
by 17 states in a total of 50 districts for rabi 2011-12
season. During rabi 2010-11, about 3.58 lakh farmers
over an area of about 3.23 lakh ha have been
covered, insuring a sum amounting to `694.06 crore.
The claims amounting to `15.96 crore have been
provided to 46,224 farmers. 4.89 lakh farmers have
been covered over an area of 7.18 lakh ha insuring a
sum amounting to `14.70 crore.
1.47 The Weather Based Crop Insurance Scheme
(WBCIS) is also being implemented as a central-sector
scheme from kharif 2007 season. The scheme is
intended to provide insurance protection to farmers
against adverse weather incidence, such as deficit and
excess rainfall, high or low temperature, and humidity
that are deemed to adversely impact crop production.
The WBCIS is based on actuarial rates of premium but
to make the scheme attractive, premium actually
charged from farmers has been restricted to be on par
with the NAIS. From kharif 2007-08 to kharif 2010-11,
195.33 lakh farmers over an area of about 278 lakh
ha with sum insured of about `31,953 crore have
been covered under the scheme. Claims to the tune of
about `991 crore have been paid against the premium
of about `2,868 crore. Detailed fund requirements as
estimated by the implementing agency for these
schemes for the year 2012-13 are to the tune of
`2,200 crore.
q. Support Prices, Procurement andStock of Foodgrains
1.48 Though with economic liberalization and
gradual integration with the world economy, relaxation
of export controls on several agricultural products
since 1991 have helped agricultural exports, there are
still occasional interventions by the government (for
example, export bans on wheat and rice, or limits on
the stocking of grains by private trade that dissuade
the private sector players from investing in the agri-
system). However, one of the main government
interventions in the agricultural markets currently is its
policy of Minimum Support Prices (MSP) for
agricultural commodities. For procurement of
horticultural commodities which are perishable in
nature and not covered under the Price Support
Scheme, with a view to protect the growers of these
commodities from making distress sale in the event of
bumper crop during the peak harvesting periods when
the prices tend to fall below the economic cost of
production, a Market Intervention Scheme (MIS) is
implemented on the request of a State /UT
Government which is ready to bear 50 per cent loss
(25% in case of North-Eastern States), if any, incurred
on its implementation.
1.49 MSP for common paddy, wheat, arhar,
moong, urad and cotton increased by 8.0, 14.73,
6.67, 10.41 and 13.79 per cent, respectively during
17
2011-12 over the year 2010-11. There has been no
change in the MSP of cotton. The procurement of
rice and wheat as on March 1, 2012 (kharif
marketing season for rice and rabi marketing season
for wheat) at 26.8 million tonnes and 28.3 million
tonnes, respectively, represents a decline of (-) 21.63
per cent and increase of 25.78 per cent as compared
to the corresponding date last year. The stock of
foodgrains (rice and wheat) held by the Food
Corporation of India (FCI) as on 01 February, 2012
at 55.25 million tonnes was higher by 17.2 per cent
over the level of 47.17 million tonnes as on 01
February, 2012. The off-take of foodgrains (rice and
wheat) under Targeted Public Distribution System
(TPDS) and other schemes at 47.72 million tonnes
during April-January 2011-12 was 9.96 per cent
lower than that at 53.0 million tonnes during
2010-11.
r. Policy focus on post production stage -towards a broad based food grainspolicy
1.50 The agricultural growth strategy for a long
time focused mainly on production phase. In the
context of food grains policy, concern has been raised
about simultaneous occurrence of high food inflation
and large food grains stocks in our granaries. It has
been argued that, in creating a better food grains
policy, it is imperative that the entire system of food
grains production, procurement, release and
distribution is looked at.
1.51 In this endeavour, besides improving storage
facilities, there is a need to redesign the mechanics of
procurement and release of food grains to the market
to ensure that the impact on prices is substantial in the
desired direction. An improvement in marketing
conditions and encouragement to private sector
participation can be achieved by reforming the APMC
Acts. Appropriate changes in the APMC Acts can boost
private sector investment in developing regularised
markets, logistics and warehouse receipt systems,
futures markets, and in infrastructure (such as cold
storage facilities, quality certification, etc.) for imports
and exports. This is particularly relevant for the high
value segment that is currently hostage to high post-
harvest losses and weak farm-firm linkages. The
introduction of the Model Act in 2003 was directed
towards allowing private market yards, direct buying
and selling and also to promote and regulate contract
farming in high value agriculture. Although many
states have adopted the new Model Act, with
modifications, its impact on farmers in terms of better
prices for their produce and a reduction in the high
differences between farm harvest prices and consumer
prices is not yet visible.
s. Storage Infrastructure
1.52 Around 30 per cent of fruits and vegetables
grown in India (40 million tonnes) get wasted
annually due to gaps in cold chain, infrastructure,
insufficient cold storage capacity, unavailability of
cold storages in close proximity to farms, poor
transportation infrastructure etc. India wastes more
fruits and vegetables than it consumes. Operating
costs for Indian Cold Storage Units are over $60 per
cubic metre per year compared to less than $30 in
the West. Energy Expenses make up about 28 per
cent of the total expenses for Indian cold storages
compared to 10 per cent in the West (Source: “Post-
Harvest Losses due to Gaps in Cold Chain in India –
A Solution”, Maheswar.C). This brings out the need
to give focused attention to post harvest issues.
Efforts at creating storage infrastructure should also
keep in its radar that the benefits of this infrastructure
accrues to the small and marginal farmers- a few
NABARD in-house studies have pointed out that
unless facilitating arrangements like pledge financing
facilities, warehouse receipts, etc. are put in place,
the benefits of the storage infrastructure may not
accrue to small and marginal farmers.
18
t. Union Budget 2012-13 and Agriculture
1.53 Given the crucial role of agriculture in the
economy, Union Budget 2012-13 provided a boost to
agriculture by enhancing the allocations to agricultural
sector and to some key national projects for expansion
of agricultural facilities. Recognising that farmers need
timely access to affordable credit, the farm credit target
has been raised from `4,75,000 crore in 2011-12
t o `5,75,000 crore in 2012-13. Continuation of
interest subvention scheme for providing crop loans to
farmers at 7.0 per cent interest and additional
subvention of 3.0 per cent for prompt
repayment and making Kisan Credit Card a smart
card which could be used at ATMs are some of the
positive announcements.
1.54 The significance of agriculture sector in India
is not merely restricted to its contribution to GDP, but
also by way of its close link to the objective of
inclusive growth, its ability to impact poverty and its
role in addressing the macro concern of inflation. The
structural concerns and other issues brought out
above, have a critical bearing on the policies and
performance of NABARD, outlined in the later
chapters.
19
II
The business operations of NABARD comprise
(i) providing refinance support to State Co-operative
Banks (SCB), Commercial Banks (CB), Regional Rural
Banks (RRB), Scheduled Primary Urban Co-operative
Banks (PUCB) and Agriculture Development Finance
Companies (ADFC) to supplement their financial
resources for enhancing credit flow to agriculture and
rural sectors, (ii) co-financing viable projects with
commercial banks, RRBs, SCB & Non-Banking
Finance Companies (NBFC), (iii) direct lending to
Central Co-operative Bank (CCB) and Primary
Agricultural Credit Societies (PACS) by way of a short-
term multi-purpose credit product, (iv) financing for
rural infrastructure projects by way of the Rural
Infrastructure Development Fund (RIDF) and a new
line of credit called the NABARD Infrastructure
Development Assistance (NIDA), (v) refinancing banks
against loans extended by them to private entities and
agencies owned /assisted by the Government for
creation of warehousing infrastructure and
(vi) professional consultancy service in agriculture,
allied activities and rural development to Government
of India, State Governments, Banks/ Financial
Institutions, Co-operative Institutions, Corporates,
NGOs, International organisations and other clients
provided by NABCONS. This chapter presents detail
of the business operations and achievements of the
Bank during the year.
2.2 The total financial support extended by
NABARD during 2011-12 stood at `82,339.48 crore,
registering a growth of 36.13 per cent over 2010-11
(Chart 2.1).
A. Short-Term Refinance
2.3 NABARD refinances short-term loans given by
Co-operative Banks and RRBs for production,
marketing and procurement activities. Increase in
NABARD’s refinance assistance under Short-Term
Seasonal Agricultural Operations ((ST-SAO) to
Co-operative Banks and RRBs indicating credit limits
sanctioned and maximum outstanding for the last five
years can be seen from Table 2.1.
a. State Co-operative Banks
(i) Support for Seasonal Agricultural
Operations
2.4 NABARD refinances SAO activities including
preparation of land for sowing, usage of farm inputs
and labour by way of a consolidated limit to SCBs on
behalf of the DCCBs in its jurisdiction. The quantum
Table 2.1: Short term refinance (production credit)for the last five years
(` crore)
Year Credit Limits Maximumsanctioned outstanding
2007-08 18291 16352 (89.40)
2008-09 19627 17212 (87.70)
2009-10 25661 24715 (96.31)
2010-11 34375 34196 (99.48)
2011-12 49013 48981 (99.94)
Figures in the parentheses refer to percentage share
Business Operations
Production Credit
20
of refinance assistance to Co-operative Banks was
linked to their net Non Performing Assets (NPAs) and
their compliance with Sec. 11(1) of B R Act, 1949
(AACS). The region-wise refinance eligibility of SCBs
during 2011-12 is provided in Table 2.2. With GoI’s
new initiative named “Bringing Green Revolution to
Eastern India (BGREI) comprising the States in the
Eastern Region and 28 districts of Eastern Uttar
Pradesh, it was decided to extend the facility of
additional refinance of 5 per cent to SCBs in this
region during 2011-12.
2.5 In order to enhance the ground level credit for
crop loans by Co-operative Banks, it was decided to
provide additional refinance of 10 per cent to all the
regions thus providing refinance of 55 per cent and 60
per cent of the crop loan disbursements to general
areas and the Eastern region (Bihar, West Bengal,
Odisha, Jharkhand, Chhattisgarh and 28 districts of
(Eastern Uttar Pradesh) respectively, for the year
2011-12. This refinance was available to SCBs
working in other than NER & Hilly States on behalf of
DCCBs which were complying with criterion:
(i) Section 11(1) compliant (ii) Rated as A or B as per
the latest inspection report of NABARD
(iii) Continuously in profit for the last 3 years &
(iv) CD Ratio of 70 per cent and above (as on 31
March 2011). With a view to increasing the credit flow
in the NE Region, Jammu and Kashmir, Sikkim,
Andaman and Nicobar Islands, Himachal Pradesh and
Uttarakhand, the quantum of refinance provided to
SCBs was enhanced to maximum 70 per cent of their
crop loan disbursements with relaxation in eligibility
criterion. This was higher by 15 per cent from the
maximum level of 55 per cent during 2010-11.
2.6 With a view to augmenting ST-SAO Refinance
to farmers through the co-operative credit structure, it
has been decided to launch a direct separate credit
window facility for good working Central Co-operative
Banks under Section 21 (1) (i) read with Section 21
(2) and Section 33 of NABARD Act 1981. In addition,
NABARD will also sanction refinance to Regional Rural
Banks and Public Sector Banks for financing PACS
under Section 21 (1) and Section 21 (4) of NABARD
Act 1981 against promissory notes, subject to the
Banks furnishing a declaration in writing setting out
the purposes for which they have made loans and
advances and such other reasons as may be required
by NABARD. A credit limit of `79.47 crore was
sanctioned to Public Sector Banks for financing PACS
to provide crop loan to farmers under the scheme.
2.7 During 2011-12, ST-SAO credit limits were
sanctioned to 23 SCBs aggregating `33,995.67 crore
as compared to `23,759.34 crore to 21 SCBs during
2010-11. The credit limits included `3,171.70 crore for
the Oilseeds Production Programme (OPP), `285.57
crore for National Pulse Development Programme
(NPDP) and `1,106.47 crore for the Development of
Tribal Population (DTP). SCBs reached a maximum
outstanding of `33,995.67 crore during 2011-12 with
100 per cent achievement level.
2.8 While SCBs in northern region (Haryana,
Himachal Pradesh, Punjab and Rajasthan) accounted
for 32 per cent share, SCBs in southern region
(Andhra Pradesh, Karnataka, Kerala, Puducherry and
Tamil Nadu), western region (Gujarat and
Maharashtra) and central regions (Madhya Pradesh,
Uttarakhand and Uttar Pradesh) accounted for 24, 17
Table 2.2: Sanction of ST(SAO) Credit Limits to SCB forthe year 2011-12
Region/States Net NPAs Eligible quantum(%) of refinance (%)
NE/Hilly Region/ Upto 15 70A & NIslands Above 15 65
Eastern Region Upto 10 50Above 10 45
Rest of India Upto 10 45Above 10 40
NE : Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagalandand Tripura
Hilly Region : Jammu and Kashmir, Himachal Pradesh, Uttarakhand,Sikkim
Eastern Region : Bihar, West Bengal, Chhattisgarh, Jharkhand, Odisha and28 Districts of Eastern Uttar Pradesh.
21
and 16 per cent shares, respectively, of the aggregate
credit limits sanctioned. Eastern region (Bihar,
Chhattisgarh, Odisha and West Bengal) accounted for
11 per cent. The share of refinance availed of by the
co-operative banks in the NER continued to be low
despite relaxations. However, the aggregate limits
sanctioned to Assam, Meghalaya, Nagaland and
Sikkim SCBs more than doubled from `7.00 crore in
the year 2010-11 to `18.58 crore in the year 2011-12.
The limits were fully utilised.
(ii) Support for Short Term (Others)
2.9 This includes short-term refinance for
agriculture purposes, allied activities, marketing of
crops, pisciculture, working capital requirements of
industrial co-operative societies (other than weavers)/
labour contract and forest labour co-operative societies
(including collection of minor forest produce) and rural
artisans (including weaver members of PACS/LAMPS/
FSS)/ procurement and distribution of agricultural
inputs and ST- Labour Contract Co-operatives
engaged in civil work in rural areas. The SCBs with net
NPA not exceeding 10 per cent, as on 31 March 2010,
were considered eligible for refinance. Relaxations in
NPA norms extended to North Eastern regions in the
case of ST-SAO was made applicable for ST-Others
also. The assessment norms hitherto followed, for
different purposes continued. A consolidated ST
(Others) limit of `145.00 crore was sanctioned to
Haryana and Tamil Nadu SCBs and the extent of
utilisation was 85 per cent.
(iii) Support to weavers
2.10 Refinance assistance is made available to SCBs
on behalf of eligible DCCBs to meet the working capital
requirements of primary, apex and regional weavers
societies. The refinance assistance is linked to their net
NPA, with relaxations for eastern and north eastern
regions. Consolidated limits were sanctioned to SCBs
on behalf of eligible DCCBs. Relaxations in NPA norms
as extended to Eastern and NER in the case of ST-SAO
continued to be made applicable for weavers sector
also. Refinance assistance for weavers is also routed
through commercial banks to co-operative societies
for production and marketing of handloom products
made by individual weavers, handloom weaver
groups and master weavers. Scheduled Commercial
Banks having Net NPA not exceeding 3 per cent of
net loans and advances outstanding as on 31 March
2011 and in profit in 2009-10/2010-11 and without
accumulated losses, were considered eligible for
refinance. In addition, refinance is provided to RRBs
and Commercial banks to meet the working capital
requirement of Mutually Aided Co-operative Societies
(MACS) and Producer Groups. Short term credit was
also available to SCBs and scheduled commercial
banks for financing working capital requirements of
State Handloom Development Corporations for
production/procurement and marketing of handloom
products. The Interest Rate on refinance to client
institutions for the year 2011-12 for Weaver Sector
was revised from 8.5 per cent to 9.75 per cent w.e.f.
29.7.2011 and further revised to 10.0 per cent w.e.f.
14.11.2011 (for CBs w.e.f. 28.11.2011), keeping in
view the hardening of the interest rates.
2.11 During 2011-12, ST (Weavers) credit limits
aggregating `190.01 crore were sanctioned to three
SCBs (Andhra Pradesh- `60.32 crore, Tamil Nadu- `122
crore and Puducherry - `7.69 crore) for production,
procurement, marketing activities as against `215.75
crore during 2010-11. The maximum outstanding
during 2011-12 was `204.54 crore which includes
previous year outstanding as against `198.14 crore in
2010-11. Due to weakness in both credit and non-
credit co-operative credit system, many states having
major concentration of handloom activities (NE
states, Odisha, Kerala, West Bengal, UP and
Karnataka) have not been able to avail of refinance
facilities from NABARD. However, the situation is
likely to improve upon the implementation of the
‘Revival, Reform and Restructuring Package for the
handloom sector and inclusion of the support for the
‘institutional credit’ under the ‘Integrated Handloom
22
Development Scheme (IHDS)’ of the Ministry of
Textiles (MoT) of the GoI. So far, 4,624 HWGs have
been formed in various states viz., Odisha (1,366),
Andhra Pradesh (1,258), Assam (272), Bihar (82)
Jharkhand (500), Madhya Pradesh (266), Uttar
Pradesh (272), West Bengal (88), and in other states
(520). Of these, 2,062 HWGs have been credit linked.
b. Regional Rural Banks
2.12 NABARD provides Short Term refinance
support to Regional Rural Banks (RRBs) for financing
Seasonal Agricultural Operations (SAO) and Other
than SAO (OSAO) activities. The quantum of refinance
to RRB is linked to their net NPAs. The details of
region-wise refinance available to the banks are
provided in Table 2.3. Additional refinance assistance
of 5 per cent is provided to RRBs functioning in the
Eastern States and the 28 districts of Eastern Uttar
Pradesh, covered under the BGREI scheme of the
Government of India.
2.13 In order to further enhance the crop loan
disbursements by the RRBs, it was decided to provide
additional refinance of 10 per cent to all the regions
thus providing refinance of 40 per cent and 45 per
cent of the crop loan disbursements to general areas
and the eastern region of the country, respectively, for
the year 2011-12. This refinance was available to
RRBs working in other than NER & Hilly states subject
to conditions that the Net NPA would be less than 5
per cent and CD Ratio of 70 per cent and above as on
31 March 2011.
2.14 With a view to increasing the credit flow in the
NE Region, Jammu and Kashmir, Sikkim, Andaman
and Nicobar Islands, Himachal Pradesh and
Uttarakhand, the quantum of refinance provided to
RRBs was enhanced to maximum 55 per cent of their
crop loan disbursements with relaxation in eligibility
criterion. This was higher by 15 per cent from the
maximum level of 40 per cent during 2010-11.
2.15 During 2011-12, NABARD sanctioned limits of
`13,925.66 crore to 81 RRBs under ST-SAO as against
`9,799.69 crore sanctioned to 80 RRBs in 2010-11.
The limit included `1,236.29 crore for Oilseeds
Production Programme (OPP), `251.90 crore for
Development of Tribal Population (DTP) and
`27.91 crore for National Pulses Development
Programme (NPDP). Uttar Pradesh received the largest
share of credit limit sanctioned of `2,442.14 crore
under ST (SAO) for RRBs, followed by Andhra
Pradesh (`2,017 crore), Rajasthan (`1,575 crore),
Karnataka (`1,175 crore) and Kerala (`1,084.40
crore). The maximum outstanding was `13,925.66
crore with 100 per cent achievement level under the
limit sanctioned during 2011-12. Six RRBs in the
North Eastern Region were sanctioned credit limit of
`104.94 crore, which was fully utilised by them.
2.16 NABARD sanctioned consolidated limits to
RRBs for ST-OSAO to the extent of 60 per cent of
their Realistic Lending Programme (RLP) for eligible
purposes like marketing of crops, fisheries, approved
purposes like production and marketing activities of
artisans (including handloom weavers), village/cottage/
tiny sector industries, financing persons belonging to
the weaker sections engaged in trade/business/service
activities including distribution of inputs for agriculture
and allied activities. RRBs having Net NPA upto
Table 2.3: Sanction of ST(SAO) Credit Limits toRRB for the year 2011-12
Net NPAs (%) Eligible quantum ofof RRB refinance (%)
NE/Hilly Region/ Upto 10 55A & N Islands Above 10 50
Eastern Region Upto 5 35Above 5 30
Rest of India Upto 5 30Above 5 25
NE: Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,Nagaland and Tripura
Hilly Region : Jammu and Kashmir, Himachal Pradesh, Uttarakhand,Sikkim
Eastern Region: Bihar, West Bengal, Chhattisgarh, Jharkhand, Odishaand 28 Districts of Eastern Uttar Pradesh
23
5 per cent were eligible for refinance. The aggregate
limit for ST-OSAO sanctioned during 2011-12 was
`677.00 crore, against `600.00 crore in the previous
year. The maximum utilisation was `653.00 crore.
B. Other Initiatives
a. Revival, Reform and RestructuringPackage for Handloom Sector
2.17 In the Budget speech for 2011-12, the
Finance Minister announced that a Centrally
Sponsored Plan Scheme on “Revival, Reform and
Restructuring Package for Handloom Sector” with a
total outlay of `3,884 crore will be implemented by
NABARD, starting with the current financial year. This
scheme aims at revival of handloom sector by waiver
of overdue loans along with its capacity building,
technological up gradation, introduction of Common
Accounting System (CAS) and Management
Information System (MIS). The focus of the assistance
under the Package is to ease the existing chocked
credit lines to the handloom sector, with fresh flow of
credit, to be supported by 3 per cent interest
subvention and credit guarantee through Credit
Guarantee Fund Trust for Micro and Small Enterprises
(CGTMSE) floated by Small Industries Development
Bank of India (SIDBI). So far, 19 states have given
their consent to implement the Package in their states
out of which tripartite agreement has been signed
between GoI, NABARD and the Governments of
Andhra Pradesh, Kerala, Uttarakhand, West Bengal
and Karnataka so far.
b. Comprehensive Package for theHandloom Sector
2.18 The Ministry of Textiles (MoT), GoI vide its
Notification dated 9 January 2012 issued operational
guidelines for “Institutional Credit” component under
the Integrated Handloom Development Scheme
(IHDS) for the handloom sector in the country.
NABARD has been designated as the implementing
agency for channelising the Margin Money & Interest
Subsidy components under the Package. Margin
Money assistance will be provided @ `4,200/- per
individual weaver, their SHGs & JLGs so as to raise
borrowings from the Banks/Financial Institutions
including RRBs, SCBs/DCCBs. Interest Subsidy @3
per cent per annum for 3 years from the date of first
disbursal will be provided to weaver/eligible
institutions by the GoI so that they may avail credit
facility at subsidised rate. However, Interest Subsidy
will not be available from the date of the loan account
turns NPA even within the period of 3 years. The
Package will be monitored at All India and State Level
Monitoring Committees. The first instalment of `7.57
crore has been released by the MoT, GoI to be passed
on to the banks.
c. Interest Subvention to Farmers
2.19 The continuance of the interest subvention
scheme was announced in the Union Budget 2011-12.
Interest subvention was made available at 2 per cent
per annum to public sector banks, co-operative banks
and RRBs for deploying their own funds for lending
crop loan upto `3 lakh per farmer, at an interest rate
of 7 per cent p.a. or less. Additional subvention of 3
per cent was announced to those farmers who would
repay crop loans promptly within one year of
disbursement. Thus the effective interest rate paid on
crop loan by such farmers would be 4 per cent.
Interest subvention was given to NABARD by GoI for
providing concessional refinance to SCBs and RRBs at
4.5 per cent interest rate. Aggregate interest
subvention of `1,688.62 crore and `2,097.94 crore
under the interest subvention scheme 2009-10 and
2010-11, respectively, was provided by GoI to
NABARD, Co-operative Banks and RRBs. The Interest
subvention for 2011-12 has been estimated at `3,000
crore and so far an amount of `424.96 crore has been
received from GoI. The total amount disbursed by
GoI during the year under various interest subvention
schemes is `2,111.52 crore.
24
Table 2.4: Rates of Interest on Refinance
(per cent)
Sl. No. Purpose Agency Interest Rate
1 SAO i) SCB/RRB 4.5
ii) CCB & PACS through RRB / CB (PSB) 4.5
2 ST (Others – other than weavers) SCB 10.0
3 ST (Weavers – Primary and Apex/Regional Weavers Cooperative Societies.) SCB 10.0
4 ST – Weavers - Financing of Primary Scheduled Commercial Banks 10.0Weavers Cooperative Societies
5 ST-Other than SAO loans (ST- OSAO) RRB 10.0
6 ST - Working capital requirements of SHDC SCB & Scheduled Commercial Banks 10.0
7 MT (Conversion) loan SCB/RRB 7.25 (minimum)
2.22 NABARD refinances term loans given by
Commercial Banks, Regional Rural Banks and
Cooperative Banks for farm and non-farm sector
activities. These loans have a currency of 3-15 years
and include advances for farm investments, allied
activities, small and micro enterprises, agro-processing,
organic farming, non-conventional energy and rural
housing.
A. Refinance Policy and EligibilityCriteria
2.23 The refinance policy for 2011-12 laid down
the eligibility criteria for banks to avail of NABARD
refinance. The eligibility criteria for refinance for the
year 2011-12 continued to be linked to Net NPA in
case of Commercial Banks, SCBs, PUCBs and RRBs
and recovery for the SCARDBs. However, for the
current year SCBs, SCARDBs and RRBs were
classified under four categories based on their Net
NPA/ Recovery position as against five categories
during 2010-11 for the purpose of deciding their
eligibility for availing of refinance. SCBs with Net NPA
above 20 per cent or Audit Classification of C/D;
SCARDBs with recovery of less than 30 per cent or
Audit Classification of C/D; and RRBs with net NPA
above 15 per cent and those with accumulated losses
d. GoI Package for Sugar Industry
2.20 NABARD continued to act as the nodal
agency for GoI package for restructuring of term
loans of co-operative sugar mills. Out of `200.13
crore received from GoI towards interest subvention,
`200.02 crore was disbursed to 76 co-operative sugar
mills in Maharashtra and Odisha. NABARD also
acted as the nodal agency for routing the interest
subvention to co-operative banks and RRB under
“Scheme for extending Financial Assistance to Sugar
Undertakings -2007”. Out of `383.59 crore received
from GoI during the year 2011-12 towards interest
subvention, `383.38 crore was released to 212 sugar
mills operating in 11 States viz., Maharashtra, UP, AP,
Tamil Nadu, Uttarakhand, Odisha, Madhya Pradesh,
Gujarat, Goa, Punjab and Karnataka.
e. Interest Rates on RefinanceAssistance
2.21 The rates of interest on Short Term/Medium
Term (ST/MT) refinance to Co-operative Banks, RRB
and Scheduled Commercial Banks during
2011-12 are indicated in Table 2.4.
Investment Credit
25
and not complying with 42(6) (a) (1) of RBI Act,
1934, were not considered eligible for availing
refinance during the year.
2.24 Commercial Banks/ PUCBs/ NEDFi with Net
NPA exceeding 3 per cent were not eligible for
availing refinance during the year. NBFCs registered
with RBI, having AAA rating from a SEBI approved
agency and with Net NPA not exceeding 3 per cent,
were eligible for refinance. Refinance was provided to
Commercial Banks, SCBs and RRBs at 100 per cent of
the eligible bank loan for all activities under ‘thrust
areas’. With effect from 2 September 2011, refinance
to SCARDBs was extended as term loans as against
the earlier practice of contribution to floatation of
debentures. Under the new system, all SCARDBs are
eligible for refinance of 90 per cent of the eligible
bank loan disbursed.
B. Special Package for NorthEastern and Other Regions
2.25 For increasing the credit flow to the States in
the Eastern Region (West Bengal, Odisha, Bihar,
Jharkhand and Andaman & Nicobar Islands), North
Eastern Region (Assam, Arunachal Pradesh, Manipur,
Meghalaya, Mizoram, Nagaland, Tripura including
Sikkim), Hilly States (Jammu & Kashmir, Himachal
Pradesh and Uttarakhand), Lakshadweep and
Chhattisgarh, NABARD continued to (i) apply uniform
interest rate on refinance to all client institutions in the
north eastern region, (ii) extend 5 per cent relaxation
in recovery norms for SCARDBs and relaxation in Net
NPA norms by 5 and 3 per cent, respectively, for SCBs
and RRBs and (iii) provide refinance at 100 per cent
of the eligible bank loan for all client institutions
except SCARDBs for all purposes.
C. Security Norms
2.26 For release of refinance to SCARDBs and
SCBs (not scheduled and having audit classification
other than ‘A’) alternative security like pledge of
Government Securities or Fixed Deposit Receipts
issued by Scheduled banks/ good working SCB (in the
event of Government Guarantee not forthcoming),
was considered subject to fulfillment of certain terms
and conditions as prescribed by NABARD. Refinance
to all SCARDBs was against Government guarantee.
D. Interest Rates on Refinance
2.27 During the year, the rate of interest was
revised five times in the range of 8.25 to 11.25 per
cent depending upon the type of agency and quantum
of refinance. The revised interest rate on refinance to
CBs and RRBs against loans to MFIs for on-lending to
clients was 3 per cent less than that being charged by
banks subject to the minimum interest rates prevailing
for various agencies in various regions of the country.
a. Concessional rate of interest forEastern Region
2.28 For ensuring investments in agriculture for
enhancing production and productivity of crops in the
Eastern Region, comprising of the States of Assam,
Bihar, Jharkhand, Chhattisgarh, Odisha, West Bengal
and Eastern UP (covering 28 districts of UP), banks
were eligible for 100 per cent refinance at a
concessional interest rate of 7.50 per cent for specified
eligible activities during 2011-12 and 2012-13 after
achieving minimum target in key activities viz. Water
Resources Development, Land Development, Farm
Equipments, Seed Production and under group mode
to SHGs/ JLGs for Tractor financing. During the year,
an amount of `128.71 crore was disbursed under the
above scheme by various banks.
E. Refinance Support
2.29 During the year 2011-12 the refinance
disbursement was `15,421.70 crore as against the
budget of `14,995.00 crore.
26
Table 2.5: Agency wise disbursement of Refinance
(` crore)
Agency 2009-10 2010-11 2011-12
Target Disb % Share Target Disb % Share Target Disb % Share
SCARDBs 2290.00 2221.30 18.50 2160.00 2351.85 17.44 2445.00 2444.93 15.85
SCBs 1040.50 1251.95 10.43 1340.00 1356.62 10.06 1205.00 1192.29 7.73
CBs 6085.50 6057.19 50.44 7052.00 7348.49 54.49 8030.00 8433.75 54.69
RRBs 1879.00 2457.46 20.46 2288.00 2287.84 16.96 3035.00 3086.19 20.01
PUCBs - 16.14 0.13 85.00 84.87 0.63 60.00 54.08 0.35
ADFCs/NABFINS 5.00 5.05 0.04 55.00 56.20 0.42 220.00 210.46 1.37
Total 11300.00 12009.08 100.00 12980.00 13485.87 100.00 14995.00 15421.70 100.00
a. Agency-wise Disbursements ofRefinance
2.30 During 2011-12, Commercial Banks have
availed of refinance amounting to `8,433.75 crore,
SCARDBs and SCBs have availed of refinance
amounting to `2,444.93 crore and `1,192.29 crore,
respectively and RRBs have availed of refinance
amounting to `3,086.19 crore (Table 2.5 and
Chart 2.2).
b. Spatial Distribution of Refinance
2.31 The spatial distribution of refinance
disbursement across regions indicated that major share
had been accounted by the states in the southern
region (48.30%), followed by northern (15.7%),
central (12.10%), eastern (11.60 %), western
(10.80%), and north eastern region (1.50%) (Table 2.6
and Chart 2.3).
c. Sector-wise disbursements
2.32 During 2011-12, the major share of refinance
has been accounted by NFS (23.18 %) followed by
SHG (19.92 %), Farm Mechanisation (13.84 %),
Animal Husbandry (10.18%) and Plantation &
Horticulture (10.03%) (Table 2.7).
F. Co-financing
2.33 During the year, an amount of `1.91 crore
was disbursed taking the cumulative disbursement to
`155.55 crore for 35 ongoing projects under
co-financing.
27
G. Capital Investment SubsidySchemes
2.34 NABARD continued to serve as nodal agency
for implementation of various Capital Investment
Subsidy Schemes (CISS) of the GoI, for routing of
subsidy admissible under the schemes, monitoring the
progress of the scheme and coordinating with banks,
State Governments & the GoI. The schemes were as
follows:
(i) Construction of Rural Godowns
(ii) Development/ Strengthening of Agriculture
Marketing Infrastructure, Grading and
Standardisation
(iii) Establishment of Agri-Clinic and Agri-Business
Centres
(iv) Bihar Ground Water Irrigation Scheme
(v) Scheme for installation of Solar Off-Grid and
Decentralised Applications
(vi) National Project on Organic Farming
Table 2.6: Region-wise Disbursement of Refinance
(` crore)
Region 2009-10 2010-11 2011-12
Target Disb. % Share * Target Disb. % Share * Target Disb. % Share *
Northern 2790.00 2419.87 20.20 2835.00 2810.70 20.80 2928.00 2426.37 15.70North Eastern 210.00 139.85 1.20 266.00 265.82 2.00 258.00 232.86 1.50Eastern 1185.00 891.07 7.40 1392.00 1405.35 10.40 1415.00 1783.53 11.60Central 1680.00 1478.60 12.30 1718.00 1928.63 14.30 1927.00 1867.05 12.10Western 935.00 1111.79 9.30 965.00 1253.64 9.30 1598.00 1671.16 10.80Southern 4500.00 5967.89 49.70 5804.00 5821.73 43.20 6869.00 7440.73 48.30
Total 11300.00 12009.08 100.00 12980.00 13485.87 100.00 14995.00 15421.70 100.00
*: % share of the total disbursement during the yearNorthern: Haryana, Himachal Pradesh, Punjab, Rajasthan, J&K, Delhi and ChandigarhNorth Eastern: Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and SikkimEastern: Bihar, Jharkhand, Odisha, West Bengal and Andaman &Nicobar IslandsCentral: Madhya Pradesh, Chhattisgarh, Uttar Pradesh and UttarakhandWestern: Gujarat, Goa, Maharashtra, Dadra & Nagar Haveli and Daman & DiuSouthern: Andhra Pradesh, Karnataka,Kerala, Tamil Nadu, Puducherry and Lakshadweep Islands
28
(vii) Eight schemes relating to Animal Husbandry
Sector, viz:
a. Establishment/ Modernisation of Rural
Slaughter Houses
b. Integrated Development of Small Ruminants
and Rabbits
c. Establishing Poultry Estates and Mother Units
for Rural Backyard Poultry
d. Salvaging and Rearing Male buffalo calves
e. Utilisation of Fallen Animals
f. Pig Development
g. Dairy Entrepreneurship Development Scheme
h. Poultry Venture Capital Fund (Subsidy)
(i) Rural Godowns
2.35 The scheme is being implemented by the
Directorate of Marketing and Inspection (DMI),
Government of India. It aims at creation of scientific
storage facilities for rural farmers; thereby helping
them to avoid wastage, product deterioration and
distress sales. With effect from 20 October 2011, the
maximum capacity admissible for subsidy under the
scheme was revised by the MoA, GoI from 10,000 MT
to 30,000 MT. During the year subsidy of `148.68
crore was released in respect of 2,950 units
(cumulatively `798.51 crore for 22,665 units).
(ii) Agricultural Marketing Infrastructure,
Grading and Standardisation
2.36 This scheme aims at establishing and
strengthening infrastructure for marketing, grading,
standardisation and quality certification of produce in
the agriculture and allied sectors. The scheme is
reform-linked and is being implemented by the DMI,
GoI in States/UTs that have amended their Agricultural
Produce Market Committee (APMC) Act to facilitate
direct marketing, contract farming and setting up of
Table 2.7: Sector-wise Disbursement of Refinance
(`crore)
Purpose 2009-10 2010-11 2011-12
Target Disb Share % Target Disb Share % Target Disb % Share
Minor Irrigation 660.00 496.73 4.1 909.00 920.61 6.8 1071.00 660.51 4.28
Land Development 976.00 303.67 2.5 1168.00 295.69 2.1 1243.00 504.07 3.27
Farm Mechanisation 2194.00 1714.66 14.3 1817.00 1762.98 13.0 1714.00 2134.51 13.84
Plantation & Horticulture 362.00 377.40 3.1 579.00 698.39 5.2 750.00 1547.50 10.03
PF/SGP/AH-Oth 230.00 349.79 2.9 266.00 402.37 3.0 536.00 680.20 4.41
Fisheries 132.00 54.62 0.5 149.00 47.45 0.4 160.00 91.88 0.60
Dairy Development 570.00 725.35 6.0 649.00 918.11 6.8 975.00 889.88 5.77
Forestry 38.00 6.46 0.1 52.00 9.57 0.1 21.00 15.97 0.1
Storage Godown &Market Yard 143.00 187.22 1.6 172.00 170.79 1.3 429.00 157.47 1.02
SGSY 274.00 151.50 1.3 322.00 228.84 1.7 0 211.98 1.37
Non Farm Sector 2852.00 3465.99 28.9 3115.00 3446.40 25.6 4298.00 3574.21 23.18
SC/ ST-AP 91.00 2.30 0 130.00 12.63 0.1 0 4.26 0.03
SHG 803.00 3173.56 26.4 795.00 2545.36 18.9 3642.00 3072.59 19.92
Others 1975.00 999.82 8.3 2857.00 2026.68 15.0 156.00 1876.67 12.17
Total 11300.00 12009.08 100.0 12980.00 13485.87 100.0 14995.00 15421.70 100.00
*: % share of the total disbursement during the year
29
agricultural produce markets in the private and
cooperative sectors. The scheme provides for a credit-
linked, back-ended subsidy @ 25 per cent of the
approved capital cost, with a ceiling of `50 lakh, for
projects taken up by individuals, farmers, farmers’
groups, companies, cooperatives, NGOs and State
Agencies. In case of North Eastern states, hilly and
tribal areas and entrepreneurs belonging to SC and ST
categories, the rate of subsidy is 33.33 per cent subject
to an upper ceiling of `60 lakh. The Scheme became
operational with effect from 20 October 2004. During
the year, the APMC Act was amended in the states of
Mizoram and Uttarakhand. With this, 24 states and 4
Union Territories have amended their APMC Act as on
date and were eligible to receive subsidy assistance for
projects under the scheme. In 2011-12, subsidy
amounting to `166.80 crore was released in respect of
877 units (cumulatively `440.83 crore for 5,369 units).
(iii) Agri-Clinics and Agri-Business Centre
2.37 The scheme was launched in April 2002 with
the objective of supplementing public extension by
facilitating agricultural graduates to provide fee based
extension services to farmers. The TFO ceiling has
been enhanced from `10 lakh to `20 lakh for
individual projects (`25 lakh for extremely successful
projects) and from `50 lakh to `100 lakh for group
projects. During the year, an amount of `5.54 crore
was released in respect of 147 units (cumulatively
`10.92 crore for 537 units).
(iv) Bihar Ground Water Irrigation Scheme
2.38 The “Bihar Ground Water Irrigation Scheme
(BIGWIS), promoted by the Planning Commission,
was introduced in Bihar in 2009-10 to provide
irrigation to 9.28 lakh hectare of agricultural land of
the State by installing 4.64 lakh units of shallow
tubewells/ dugwells with pumpsets, over a period of
three years. The scheme envisages coverage of all the
districts in the state. It is implemented through all
Commercial Banks and Regional Rural Banks in the
state, with NABARD channelising the admissible
subsidy amounting to 45 per cent of the project cost.
The Minor Water Resources Department, Government
of Bihar serves as the nodal department for
implementation of the project. During the year, 16,589
units were sanctioned under the scheme for which a
subsidy of `35.02 crore was released to the banks by
NABARD. Cumulatively `83.32 crore has been
released as subsidy so far for 50,655 units. In order to
facilitate easy monitoring of this scheme, NABCONS,
a subsidiary of NABARD has commissioned a web-
based MIS.
(v) Scheme for installation of Solar Off-Grid
and Decentralised Applications
2.39 The subsidy cum refinance scheme under the
Jawaharlal Nehru Solar Mission (JNNSM) was
launched by the Ministry of New & Renewable Energy
(MNRE), GoI in November 2010, to encourage
replacement of non-renewable energy sources like
fossil fuels, kerosene and diesel with solar energy to
meet energy requirements. The scheme was revised as
the Capital Subsidy for Solar Lighting & Small
Capacity Photo Voltaic (PV) Systems with effect from
15 March 2012 and the earlier Capital Subsidy cum
Refinance scheme closed on 12 March 2012. The
scheme for Solar Lighting & Small Capacity PV
Systems provides for capital subsidy of 40 per cent of
the project cost.
2.40 There is no change in the Capital Subsidy
cum Refinance scheme for installation of Solar Water
Heating Systems. The entrepreneur has the option to
avail of either subsidy or bank loan at concessional
rate of interest at 5 per cent p.a for Commercial Banks
and RRBs. The scheme covers projects specifically
approved by the Project Approval Committee of the
MNRE. During the year an amount of `51.83 crore
was released including subsidy and refinance in
respect of 45,030 units (Cumulatively `55.44 crore
was released in respect of 54,017 units).
30
(vi) National Project on Organic Farming
2.41 The National project on Organic Farming is a
central Sector Scheme introduced in the 10th Five
Year Plan for promotion of organic farming in the
country. The scheme was modified in 2011-12 to
exclude vermin-hatchery. The quantum of eligible
subsidy is to the extent of 25 per cent to 33.33 per
cent of project cost subject to a ceiling of `60 lakh.
During the year, subsidy of `1.56 crore was released in
respect of 12 units. As on 31 March 2012,
cumulatively `14.01 crore was released in respect of
688 units.
(vii) Schemes under Animal Husbandry Sector
2.42 The implementation of eight schemes relating
to Animal Husbandry Sector launched by GoI during
2009-10 and 2010-11 continued in the current year
also. A State Level Sanctioning and Monitoring
Committee (SLSMC) has been constituted by the State
Animal Husbandry Department in association with
NABARD in each State for sanctioning of subsidy/
interest subsidy/ interest free loans under these
schemes and also monitoring their progress.
a. Establishment/ Modernisation ofRural Slaughter Houses
2.43 As per GoI guidelines, the scheme is to be
implemented on a pilot basis in three states, viz., Uttar
Pradesh, Andhra Pradesh and Meghalaya, for
establishing and modernising slaughter houses in rural
areas. Credit linked back end subsidy up to a
maximum of `2.00 crore has been made available for
establishment/ modernisation of rural slaughter houses,
projects for by-products utilisation, cold storage and
cold chain and certification of quality. As on 31 March
2012, cumulatively `0.10 crore was released for
establishment of one unit under the scheme.
b. Integrated Development of SmallRuminants and Rabbits
2.44 The scheme aims at encouraging commercial
rearing of sheep, goat and rabbits by farmers. Back
end subsidy to the extent of 25 per cent of the outlay
(33.33 % in NE States hilly areas and SC/ST
beneficiaries) is being provided by GoI, through
NABARD to the banks for financing rearing/breeding
of sheep and goat and rearing of rabbit under the
scheme. During the year, subsidy amounting to `7.00
crore was released for 1,066 Sheep/Goat rearing units
(cumulatively `8.59 crore for 1,370 units).
c. Establishment of Poultry Estatesand Mother Units for RuralBackyard Poultry
2.45 The Scheme aims at establishment of poultry
estates having up to 100 broiler/ layer units on the
lines of industrial estates, where common infrastructure
facilities, inputs supply and marketing arrangements
would be provided. As on 31 March 2012, two
projects have been sanctioned for establishment of
Poultry Estates in Odisha and Sikkim. The Rural
Backyard Poultry component of the scheme intends to
promote rearing of low input breeds that can survive
in rural areas and is intended for BPL beneficiaries. As
on 31 March 2012, GoI has sanctioned 899 Mother
Units in Kerala, Bihar, Madhya Pradesh, Andhra
Pradesh, West Bengal, Nagaland, Karnataka, Punjab,
Maharashtra and Uttar Pradesh under the scheme.
d. Scheme for Salvaging and RearingMale buffalo calves
2.46 The scheme was launched in 2010-11 by GoI
to assist farmers, NGOs, partnership firms and
corporate bodies for rearing male buffalo calves for
meat production and recovery of hides. Under the
scheme, 100 per cent interest subsidy on short term
loan is provided for rearing up to nine male buffalo
calves. Back ended capital subsidy at 25 per cent of
the outlay (33.33% in NE and hilly areas) is provided
for establishment of commercial and industrial units.
e. Utilisation of Fallen Animals
2.47 The scheme, launched during 2010-11, aims
at improving the quality of hides and skins from fallen
31
animals and to convert other by-products into value
added items. It also aims to reduce/ check
environmental pollution and bird-hit hazards to
aircrafts. Under the Scheme for establishment of
Carcass Utilisation Centre (CUC) and Bone crushing
unit, 90 per cent and 50 per cent of the TFO
respectively are provided as back ended capital
subsidy. The scheme will also facilitate compliance to
the Infectious & Contagious Diseases in Animal Act
2009, wherein, proper disposal of carcasses of animals
is mandatory. During the year, the State Level
Sanctioning and Monitoring Committee (SLSMC),
West Bengal has sanctioned subsidy amounting to
`2.61 crore for establishment of two CUCs.
f. Pig Development
2.48 The scheme was launched in 2010-11 for
encouraging commercial pig rearing by farmers so as
to improve the performance of native breeds through
cross-breeding. Under the scheme, 25 per cent back
ended capital subsidy is available (33.33% in NE
States, including Sikkim and hilly areas) for pig
breeding/ rearing/ fattening units. Similarly, 50 per
cent of the outlay as back ended capital subsidy is
provided for retail outlets/ facilities for live stock
markets. During the year, subsidy amounting to `6.26
crore was released for establishment of 1,634 pig
rearing units. Cumulatively subsidy amounting to
`7.75 crore has been released for 1,873 units.
g. Dairy Entrepreneurship Development
2.49 The scheme was launched in 2010-11 for
encouraging modern dairy farms to produce clean milk
and heifer rearing farms to conserve good breeding
stock. The scheme also aims at upgrading traditional
technology to handle milk on a commercial scale and
bringing about structural changes in the unorganised
dairy sector so as to facilitate initial processing of milk
at the village level itself. Under the scheme, back-
ended subsidy amounting to 25 per cent (33.33% for
SC/ST farmers) of the outlay is being provided for
establishment of small dairy units, heifer rearing units,
purchase of milking machines/ milk testers/ bulk milk
cooling units/ processing equipment, establishment of
dairy product transportation facilities, cold chain and
dairy marketing outlets/ dairy parlours. During the
year, subsidy worth `114.36 crore for 27,319 units
(cumulatively `124.05 crore for 29,297 units) was
released.
h. Poultry Venture Capital Fund (Subsidy)
2.50 The earlier Poultry Venture Capital Fund
(Interest Free Loan) Scheme was modified as Poultry
Venture Capital Fund (Subsidy) with effect from 1
April 2011 by replacing the interest free loan and
interest subsidy with capital subsidy. The modified
scheme was launched for encouraging poultry
farming activity, especially in non-traditional States,
improving production of poultry products which have
ready market all over the country, providing quality
meat to consumers in hygienic conditions and
improving hygienic sale of poultry meat and products
in urban areas through poultry dressing and
marketing outlets. Under the scheme, back-ended
capital subsidy is available at the rate of 25 per cent
(33.33% for SC/ST farmers and NE States including
Sikkim) of the outlay for establishment of Breeding
farms for low input technology birds like turkey, emu,
etc., central grower units, hybrid layer (chicken) and
broiler units, feed mixing plants, transport vehicles,
retail outlets, poultry dressing plants, cold storage for
poultry products, large processing units, Emu
processing units, feather processing units, etc.
Subsidy amounting to `4.36 crore was released for
establishment of 189 units.
H. Evaluation Studies
2.51 During the year, 6 Evaluation/Commodity
Specific/Special Studies were conducted. A study on
Coping Mechanism conducted in Bidar and Kolar
districts of Karnataka pointed out that rainfall
fluctuations resulting in drought / flood and price
instability were the two major concerns of the
agricultural households in the dryland areas. To recoup
32
the loss in income due to agricultural shocks, the
farmers kept milch animals, reared sheep and goat,
reduced family expenditure and borrowed from SHGs,
relatives, friends and moneylenders. Asset poor
households and vulnerable/older farmers were found
to cope less with risks because of lack of resources,
education and health. Since rainfall variability was
found to be one of the major problems faced by the
farmers, water availability can be improved upon by
tapping the potential irrigation facilities and
encouraging farmers towards precision farming/move
towards changing cropping pattern. Tripartite
arrangement for marketing between farmer, industry/
wholesaler and bank/cooperative society will reduce
farmers’ distress to a certain extent.
2.52 Commodity Specific Study on cumin was
conducted in Banaskanthta and Surendranagar
districts of Gujarat to analyse the supply chain
management of cumin. Cumin cultivation was
profitable with return per rupee on cultivation being
`2.08. The average productivity at 717 kg/ha. was,
much lower than the productivity of frontline
demonstration (1,250 kg/ha.) Lack of irrigation
facilities, poor seed replacement rate and non
adoption of weed, disease and pest management, etc.
were the main reasons for the same. Marketable
surplus of the commodity was 98 per cent, being a
seed spice crop. Majority of the marketable surplus
was sold in regulated markets and only 5 per cent was
sold to village traders. The producer’s share in the
consumer’s rupee was 71 per cent in regulated
markets and 68 per cent with traders. High export
potential of the crop demands international quality
standards in pre harvest (farm practices) and post
harvest stage (processing and storage) operations.
2.53 Study on ‘Financial Inclusion’ in Hayana
revealed that out of 1,838 villages (with more than
2,000 population) identified in the state, 1,670
villages (91%) were covered under banking fold
either through brick and mortar branch or through
ICT based BC model as on 31 December 2011.
Seventy one Business Correspondents (BCs)
appointed by various banks in sample district
(Panipat) had opened 21,810 No Frills accounts and
issued 12,989 smart cards. Study on ‘Financial
Inclusion’ in Una district of Himachal Pradesh
indicated that, out of 48 unbanked villages (having
population over 2000) identified in the state,
designated banks had extended banking services in
43 villages (90%) by end of January 2012. Four of
the villages were covered by opening new branches
whereas 39 were covered under BC model. A total of
13,944 No Frills Accounts were opened and pension
distributions in 11,299 accounts were done through
the BCs in the sample district (Una). The study
revealed that though the BC model has improved
access to financial services, the issues like low
business volume, credibility gap, inactive accounts,
inadequate infrastructure, lack of sound revenue
model, etc. are need to be assessed so as to make
them viable and sustainable in the long run.
2.54 A Study on ‘Agricultural Credit : An Analysis
into Trends in Disbursement and Outstanding’ for
period from 2007-08 to 2010-11 was taken up in five
districts i.e., Aurangabad (Maharashtra), Ujjain
(Madhya Pradesh), Patiala (Punjab), West Godavari
(Andhra Pradesh) and Burdwan (West Bengal). The
study looked into various aspects of agricultural credit
such as coverage of small and marginal farmers,
disbursement, outstanding, short term, long term, etc.
pertaining to 50 branches and around 4,500
borrowers. While the coverage of small and marginal
farmers appeared to be adequate, consistent with their
respective shares in the numbers and area operated,
the study confirmed certain macro concerns like credit
growth leading to more of deepening and less
widening and also low and declining share of
investment credit. The study clearly brought out that
agriculture credit variations can be captured only at
disaggregated level as it becomes increasingly difficult
33
to make generalisations as variations / area specific
issues exist at each level, may it be state, district,
branch as well as credit agency. Available technology
should make it possible to generate granular data for
capturing monthly disbursements and outstanding so
that the seasonality of agriculture (which varies and is
changing) is not lost, while monitoring agriculture
credit. The insight into various aspects of agricultural
credit can be made only when authentic granular
information about disbursement, outstanding and
repayment of credit for agriculture at branch level is
maintained as well as made available for further policy
formulation.
2.55 A Study on ‘Graduation of SHGs’ was
conducted in Karnataka and Odisha to measure the
extent of graduation of SHGs, study the process
involved and identify the factors that can promote
graduation process. The Study based on 240 sample
SHG members and 40 control households indicated
that modal value of member’s saving was `80 per
month while the range of saving was between `30 to
`200. About three-forth of SHG members were
tapping loans for productive purposes. Considerable
proportion of SHG members was dependent on non-
SHG loans for consumption needs and equally
sizeable proportion availed non-SHG loans for meeting
farming needs. About 38 per cent of the SHG
members took up additional activity, after joining
SHGs. Graduation level of an SHG or its members
was measured as a two dimensional index, individual
savings account and micro-enterprises being the two
dimensions. At disaggregated level, two-fifth the SHG
members did not graduate in terms of savings
dimension. Training emerged as an important factor
in determining the level of graduation of an SHG.
Further, building strong SHGs based on savings and
financial discipline can help more and more members
to graduate.
I. Investment Specific Studies
2.56 During 2011-12, 19 Investment Specific
Studies and 2 Special Studies covering farm and rural
non-farm sectors were conducted by the Regional
Offices. The studies were conducted with the objective
of assessing the potential of selected investments in
the district/ state, examining adherence to the techno
economic specifications, assessing the adequacy of the
loan amount provided by the banks, estimating the
benefits accruing from the investment, identifying the
constraints at the field level in the implementation of
schemes, etc. Major findings and recommendations of
the studies are being forwarded to the banks for
suitable action.
Financing Rural Infrastructure
2.57 The government has set-up Rural
Infrastructure Development Fund (RIDF) to improve
rural infrastructure through NABARD. In addition, so
as to provide more credit and grant, NABARD
created a ‘Rural Infrastructure Promotion Fund
(RIPF)’ and also designed the NABARD
Infrastructure Development Assistance (NIDA), a
new line of credit for rural infrastructure projects.
Considering the intensity of the storage problem in
rural area, the Government of India (GoI) made a
dedicated allocation of `2,000 crore for financing
warehousing under the RIDF during 2011-12. This
chapter deals sanctions/disbursements under RIDF,
RIPF and NIDA.
34
Rural infrastructure Development Fund
2.58 The RIDF was instituted in NABARD after an
announcement was made to this effect in the Union
Budget of 1995-96 with the sole objective of giving
low cost fund support to State Governments and
State-Owned Corporations for quick completion of on-
going projects in medium and minor irrigation, soil
conservation, watershed management and other forms
of rural infrastructure.
A. Allocations
2.59 The Corpus of the Fund has grown to
`18,000 crore under RIDF XVII (2011-12) from an
allocated amount of `2,000 crore under RIDF I (1995-
96), taking the cumulative allocation to `1,52,500
crore which is inclusive of `18,500 crore under a
separate window for funding rural roads under the
Bharat Nirman Programme. The Union Budget for
2011-12, allocated an amount of `18,000 crore under
RIDF XVII during 2011-12, out of which `2,000 crore
has been exclusively dedicated for creation of
warehousing facilities in different States on a priority
basis. The successive allocations to the RIDF in the
Union Budgets have been presented in Chart 2.4.
B. Sectors/Activities
2.60 In accordance with the GoI’s instructions, only
ongoing irrigation, flood protection, and watershed
management projects were financed under RIDF I,
adopting a ‘last mile approach’ to facilitate completion
of the projects delayed on account of budgetary
constraints. The financing of rural road & bridge
projects was started during RIDF II. The coverage of
RIDF was broad-based in the subsequent tranches and
at present, a wide range of 31 activities, as approved
by the GoI, is being funded under the RIDF. These 31
activities are classified broadly under three categories,
(i) Agriculture and related sectors, (ii) Social Sectors
and (iii) Rural connectivity as detailed below:
(i) Agriculture and related Sectors
2.61 These include irrigation projects, soil
conservation, flood protection, watershed, reclamation
of water logged areas animal husbandry, plantation
and horticulture, seed, agriculture and horticulture
farms, forest development, fishing harbour/jetties,
riverine fisheries; market yards, godowns, marketing
infrastructure; cold storages; grading/certifying
mechanisms; testing laboratories; hydel projects (up to
10 MW); village knowledge centres; infrastructure for
IT in rural areas; desalination plants in coastal areas;
and setting up of KVIC industrial estates/centres. The
loans are provided at 95 per cent of project cost to all
States.
(ii) Social Sectors
2.62 The Social sector include drinking water
projects; public health institutions; construction of
toilet blocks in existing schools, especially for girls and
“Pay & Use” toilets in rural areas, and construction of
anganwadi centres. The loans for the above sectors are
provided at 90 per cent of project cost for NER & Hill
States and at 85 per cent to all other States.
(iii) Rural Connectivity
2.63 Rural Connectivity projects include rural roads
& rural bridges and a loan for this sector is being
provided at 90 per cent of the project cost to NER &
Hilly States and at 80 per cent to all other States.
35
C. RIDF XVII– Terms and Conditions
2.64 Out of the allocated amount of `18,000 crore
(including `2,000 crore for warehousing) under RIDF
XVII during 2011-12, `16,000 crore was assigned to
the States on the basis of allocative norms with
weights, viz., rural population (20%), geographical
area (20%), rural infrastructure development index
(20%), availing of sanction (5%), disbursements (20%)
in the past tranches and rural Credit Deposit (CD)
ratio (15%) as prescribed by the Project Sanctioning
Committee (PSC). As all funding through RIDF is
project- specific and project-based, the projects pertaining
to eligible sectors are submitted to NABARD by the
State Governments. These are later on prioritised
based on the State Government’s priorities and placed
before the PSC for sanction.
2.65 As was the practice in the earlier tranches, the
implementation phase for projects sanctioned under
RIDF XVII is spread over 3-5 years. The maximum
phasing in the case of major and medium irrigation
projects and other stand-alone projects involving RIDF
loan of `50 crore and above is five years. The
quantum of actual drawal of funds by a State
Government, however, depends upon the pace at
which it implements the projects. NABARD provides
funds on ‘reimbursement basis’, except for the initial
20 per cent of the project cost (30% in North-East)
which is given as ‘mobilisation advance’. Each drawal
by the State Government is treated as a separate loan
and is repayable over a seven years period including
a two years moratorium. Excepting the mobilisation
advance, subsequent drawls are made on
reimbursement basis. Depending on the drawls by
State Government, NABARD places demands for
deposits on the banks based on the bank-wise
allocation made by RBI.
2.66 State Government’s borrowings under RIDF
are governed by Article 293 (3) of the Constitution
under which GoI determines its borrowing powers
from the market and financial institutions during a
year. The rate of interest payable by NABARD on
deposits from commercial banks under RIDF-XVII is
the Bank Rate (6%). Bank rate has changed from 6 to
9.50 per cent w.e.f 13 February 2012. However, RBI
has allowed the State Governments to pay at the
previous Bank Rate plus 0.5 percent, i.e. 6.5 per cent
to NABARD till 31 March 2012. Loan disbursements
from RIDF on or after April 01, 2012 will be at 1.5 per
cent below the prevailing Bank rate.
D. Review of Performance
(i) Sanctions and Disbursements
2.67 As on 31 March 2012, 18,162 projects
involving a loan amount of `20,701.12 crore were
sanctioned under RIDF XVII. Of the total number of
projects sanctioned, irrigation projects accounted for
27.50 per cent followed by rural road projects (24.20
%), social sector projects (17.90%), rural bridges
(12.90 %) and agri related projects (9.70%). An
amount of `1,493.82 crore was sanctioned for
warehousing projects as at end of March 2012
(Table 2.8).
2.68 Since the inception of RIDF in 1995-96, 17
Tranches of RIDF have so far been implemented. The
tranche XVII was being implemented during the year,
2011-12. While tranche I to X were closed earlier,
tranche XI was closed as at end-March 2012. For
projects sanctioned under RIDF XII and XIII, the
implementation period has been extended until 31
March 2013 to enable State Governments to complete
on-going projects and avail of reimbursement of
Table 2.8: Sector-wise Projects and AmountsSanctioned under RIDF XVII
(As on 31 March 2012)
Sector No. of Share in Amt Share inProjects Total No. Sanctioned Total
(%) (`̀̀̀̀ crore) Amount (%)
Irrigation 2717 14.7 5686.32 27.5Rural Bridge 860 4.7 2663.97 12.9Rural Roads 6294 34.1 5011.57 24.2Social Sector 3311 17.9 3707.11 17.9Power 5 0.0 127.15 0.6Ag. related 3857 22.5 2011.18 9.7Warehousing 1118 6.1 1493.82 7.2
Total 18162 100.0 20701.12 100.0
36
2.71 Taking into account phasing of the projects,
under various tranches (RIDF I to XVII), State
Governments had a total pool of projects of `1,30,009
crore as on 31 March 2012. A state-wise analysis of
ratio of disbursements to the approved phasing of
sanctions (Table 2.11) reveals that Mizoram topped
with 132 per cent, followed by Goa (106%),
Meghalaya (100%), Manipur (96%), Maharashtra and
Kerala (95%), Haryana and Uttarakhand (93%), Tamil
Nadu (92%) and Chhattisgarh (91%).
(ii) Deposits/Repayments
2.72 The cumulative deposits and repayments
under RIDF stood at `1,11,025.94 crore and
`35,919.23 crore respectively, as on 31 March 2012.
During the year, an amount of `15,241.32 crore was
received as deposits from commercial banks. An
amount of `8,012.24 crore was received from state
governments towards repayment of RIDF loans during
2011-12. The outstanding loans under RIDF have also
been rapidly increasing over the years indicating better
implementation of the projects and availability of more
infrastructural facilities in rural areas. The total RIDF
loan outstanding, as on 31 March 2012, was
`70,860.31 crore.
E. Monitoring of RIDF Projects
2.73 Monitoring of RIDF projects under
implementation are imperative for ensuring timely
completion and quality of assets being created.
Though the primary responsibility of monitoring of
RIDF projects vests with State Governments, NABARD
also undertakes monitoring of RIDF projects by
exception. This two-pronged monitoring approach
results in better implementation of projects, as various
constraints are identified, reviewed and sorted out at
regular intervals. The High Power Committee (HPC) at
State level has proven to be an effective mechanism
for monitoring and in ensuring speedy and timely
completion of projects. The HPC chaired by the Chief/
Finance Secretary of the State, meets quarterly to
review the pace of project implementation.
expenditure incurred there against. Cumulatively,
4,62,229 projects were sanctioned since the inception
of RIDF involving an amount of `1,42,470.65 crore as
on 31 March 2012. Of the cumulative RIDF loans
sanctioned as on 31 March 2012, 42 per cent went to
agriculture and related sectors, including irrigation and
power; 15 per cent to social sector projects like,
health, education and rural drinking water supply;
while the share of rural roads and bridges was 31 per
cent and 12 per cent, respectively (Chart 2.5).
2.69 A significant number of rural infrastructure
projects covered so far related to irrigation, rural
roads, bridges, watershed management, flood
protection, command area development, primary
schools, public health, rural drinking water, citizen
information centres, agro-forestry, etc. Cumulatively,
the number of projects and amount sanctioned,
activity-wise, is presented in Table 2.9.
2.70 As per the phasing of projects under various
tranches (RIDF I to XVII), the total amount sanctioned
was `1,30,009 crore. Against this the disbursements
aggregated `1,13,924 crore, about 88 per cent of the
amount sanctioned (Table 2.10). During the year,
disbursements were made to the tune of `14,927crore (inclusive of `759 crore sanctioned andreleased as refinance under Warehousing facilities toBanks).
37
Table. 2.9: Activity-wise Cumulative Sanctions(As on 31 March 2012)
No. Sanctions RIDF XVII Cumulative (I-XVII)No.
Amount No. Amount Ach.(%)
I Irrigation sector 2717 5686.32 237137 42586.38 29.89
1 Minor 2691 2625.73 234463 21517.80 15.10
2 Medium 15 725.93 322 5808.54 4.08
3 Major 10 2105.03 313 13227.73 9.28
4 Micro Irrigation 1 229.63 2039 2032.31 1.43
II Roads & Bridges 7154 7675.54 101932 61522.56 43.18
1 Roads 6294 5011.57 86372 44766.42 31.42
2 Bridges 860 2663.97 15560 16756.14 11.76
III Social Sector 3311 3707.11 88698 20923.25 14.69
1 Drinking Water 303 2781.15 10887 12625.19 8.86
2 Primary/Middle Schools 0 0.00 19986 1393.10 0.98
3 Public Health 126 247.70 12904 1680.01 1.18
4 S.Sch/Colleges/Ru.Service Centre 338 273.00 17474 3578.83 2.51
5 Pay & Use Toilets 20 204.00 3258 324.44 0.23
6 Anganwadi Centres 2524 201.26 24189 1321.68 0.93
IV Power Sector 5 127.15 766 2273.68 1.60
1 System Improvement 0 0.00 687 1195.44 0.84
2 Mini Hydel 5 127.15 79 1078.24 0.76
V Other Agriculture 4975 3505.00 33694 15164.80 10.66
1 Soil conservation 0 0.00 5633 1520.89 1.07
2 Flood protection 304 585.04 2382 3968.78 2.79
3 Watershed Development 31 24.89 2420 1924.91 1.35
4 Drainage 178 460.94 683 1405.59 0.99
5 Forest Development 77 58.09 2633 604.44 0.42
6 Rural Market/Yard/Godown 23 13.64 1623 720.00 0.51
7 Fishing harbour/jetties 14 68.78 165 412.25 0.29
8 Rain W.Hvstg. 105 120.86 4034 468.70 0.33
9 CADA 0 0.00 29 438.94 0.31
10 Inland Waterways 0 0.00 1 10.00 0.01
11 Food Park 0 0.00 5 41.37 0.03
12 Seed / Agri / Hoti. farms 8 4.79 1544 197.68 0.14
13 Cold Storage 0 0.00 7 17.19 0.01
14 Animal Husbandry 664 302.62 7071 1033.51 0.73
15 Rubber Plantation 1 6.94 22 27.07 0.02
16 Meat Process 0 0.00 12 49.72 0.03
17 Riverine Fisheries 0 0.00 297 73.13 0.05
18 Rural Library 0 0.00 41 2.55 0.00
19 Citizen Information Centres 70 65.43 98 126.05 0.09
20 Vill.Know.Centre/E-Vikas Kendras 2382 299.16 3621 428.04 0.30
21 Rural Industrial Estates/Centres 0 0.00 8 116.40 0.08
22 Comprehensive Infrastructure 0 0.00 249 83.77 0.06
23 Warehousing/Rural Godowns 1118 1493.82 1118 1493.82 1.05
Grand Total 18162 20701.12 462229 142470.65 100.00
38
Table 2.10: Allocations, Sanctions and Disbursements(As on 31 March 2012)
Tranche Allocation Cumulative Amount (`̀̀̀̀ in crore)
Sanctioned Phased Disbursed % Utilised
Closed Tranches (I to XI ) 50000 50233 50233 44203 88
Ongoing Tranches
XII 10000 10377 10377 8368 81
XIII 12000 12596 12594 9982 79
XIV 14000 14723 14674 10738 73
XV 14000 15638 9390 9459 101
XVI 16000 18202 11000 7747 70
XVII 1600 19207 2271 3809 168
Warehousing 02000 2253 * 970 * 1118 * 115 *
Sub-total 84000 92996 61276 51221 84
Bharat Nirman 18500 18500 18500 18500 100
G. Total 152500 161729 130009 113924 88
*inclusive of `759 crore sanctioned and released as Refinance under Warehousing Facilities to Banks
2.74 NABARD undertakes monitoring with the
objectives of (i) facilitating timely physical completion
of the projects, (ii) avoiding cost overruns, (iii)
ensuring compliance to the approved design and
quality parameters and (iv) identifying new investment
opportunities. Monitoring of RIDF projects is carried
out through desk review based on periodic returns and
field visits. With a view to ensuring smooth
implementation of projects, designated officers from
the Head Office and Regional Offices at the state level
and the DDMs at the district level undertake regular
field visits to monitor the progress of projects. During
the year, 5,499 projects were monitored through field
visits. Major observations/ issues were being taken up
with the implementing departments as also the
Finance Department of State Governments for
improving the pace and quality of the project
execution.
F. Capacity Building Support
2.75 RIDF projects involve several processes such
as project identification, area survey, project design,
preparing detailed project reports (DPRs), mid-term
appraisal both technical and economic, monitoring
and evaluation, quality testing, etc. Infrastructure
deficient States have comparatively lower off-take of
RIDF because of their weak implementing apparatus.
Training and capacity building is thus central to the
implementation of RIDF. Various constraints in
implementation of RIDF could be overcome through
training and capacity building of officials/staff involved
directly/indirectly in the implementation of RIDF. With
a view to overcoming this limitation, four Regional
Business Meets were organised by NABARD in four
major regions during 2011-12. Similarly, 48 regional
awareness workshops have been carried out by
Regional Offices for State Government officials of
Finance and other implementing Deparments, other
project implementing agencies and user groups/
agencies.
G. Economic/Social Benefits ofRIDF Projects
2.76 The rural infrastructure projects have their
own special features like (i) large capital requirement,
(ii) high sunk cost, (iii) a large proportion of the cost
to be irrevocably committed upfront before the project
becomes operative, (iv) long gestation periods,
(v) returns slow to pass on, (vi) sector is sensitive to
local social, political and cultural environment and
policy changes and (vii) the services produced/
generated non tradable. The excess services generated
39
Table 2.11: Utilisation Percentage of RIDF (I TO XVII)(As on 31 March 2012)
(` Crore)
Sl. States Sanctions Phasing Drawn UtilisationNo. (%)
1 Andhra Pradesh 14358 12424 10014 812 Karnataka 7173 5885 4980 853 Kerala 4572 2894 2751 954 Tamil Nadu 9829 7992 7353 925 Puducherry 380 180 133 74 South Zone 36312 29375 25231 86
6 Goa 449 356 376 1067 Gujarat 10902 8852 7947 908 Maharashtra 9495 6673 6336 95 West Zone 20846 15881 14659 92
9 Haryana 3528 2462 2284 9310 Himachal.Pradesh 3537 2671 2312 8711 Jammu & Kashmir 4108 3381 2982 8812 Punjab 5129 4278 3810 8913 Rajasthan 9729 7481 6227 8314 Uttar Pradesh 11999 10253 8930 8715 Uttarakhand 2929 1867 1740 93 North Zone 40958 32392 28285 87
16 Chhatisgarh 1939 1562 1418 9117 Madhya.Pradesh 10248 8284 6354 77 Central Zone 12187 9846 7771 79
18 Bihar 6011 4375 3064 7019 Jharkhand 3905 2725 2374 8720 Odisha 7059 5130 4143 8121 West Bengal 8526 6179 5247 85 East Zone 25501 18409 14828 81
22 Arunachal Pradesh 758 711 616 8723 Assam 2335 1743 1477 8524 Manipur 329 109 105 9625 Meghalaya 601 399 400 10026 Mizoram 387 196 258 13227 Nagaland 709 532 338 6428 Tripura 1070 823 471 5729 Sikkim 476 332 225 68
North-East &Sikkim 6666 4847 3890 80
RIDF Total 142471 110750 94665 85
Bharat Nirman 18500 18500 18500 100
Warehousing Ref. 759 759 759 100
Grand Total 161730 130009 113924 88
cannot be stored or exported and deficiency in service
cannot be bridged by imports barring certain
exceptions. There is a felt need for development of
rural infrastructure for increasing the productivity and
efficiency of agriculture in the form of improving the
credit absorbing capacity, enhancing the productivity
of crops and livestock, generating employment and
increasing farmers’ income, etc. This would make a
direct attack on minimising the incidence of rural
poverty.
2.77 By financing incomplete agriculture
development projects, the RIDF gives rise to significant
potential benefits such as (i) unlocking of sunk
investment already made by the State Governments,
(ii) creation of additional irrigation potential, (iii)
generation of additional employment for the rural
people, (iv) contribution to the economic wealth of the
State economy, (v) improved connectivity to villages
and marketing centres, (vi) improvements in quality of
life through facilities in education, health and drinking
water supply. Cumulative Economic and social benefits
generated as on 31 March 2012 is presented in Table
2.12 & 2.13.
Table 2.12: Cumulative Economic and social benefits(As on 31 March 2012)
SI. Particulars AdditionalNo. Benefits
1 Irrigation potential (lakh ha.) 204.07
2 Rural Roads (kms.) 354344
3 Rural Bridges (mts.) 796899
4 Rural Market Yards/Godowns (MTs) 325270
5 Gross Domestic Product (`Crore) 24580
6 Recurring Employment (No.of jobs) 8543283
Non Recurring Employment:
A. Irrigation (lakh mandays) 30097.76
B. Rural Roads and Rural Bridges(lakh mandays) 41098.51
C. Others (lakh mandays) 24228.44
7 Power Sector
A. Hydel Power Generation (MW) 212.83
B. System Improvements to minimizeT & D Losses (lakh units/ year) 22315
8 Social Sector (People /Students benefited)
A. Health Centres (lakh) 615.83
B. Primary & Secondary Schools (lakh) 100.06
C. Rural Drinking Water Supply (lakh) 1250.60
40
H. RIDF Implementation:Deficiencies
2.78 As compared with the closed tranches (I-XI),
the RIDF fund under ongoing tranches are more
judiously distributed across states, with a larger share
going to the less developed and NE States. There is
also more balanced investment across the sectors. The
State-wise targets for RIDF sanctions and
disbursements were set more rationally, in transparent
and participatory manner. However, quite a few
Table 2.13: State-wise Expected Benefits under RIDF(As on 31 March 2012)
No. State Potential Value Prodn. Recurring Non-recurring Emp.( `̀̀̀̀ crore) Employment (Lakh Mandays)
Irri (ha) Bridges (m) Roads (km) (Nos.) Irri. RR& RB Others
1 Andhra Pradesh 2383278 48321 31871 2670 1953055 5383 5545 3378
2 Arunachal Pradesh 0 2600 1010 0 0 0 233 64
3 Assam 317317 55127 836 348 102400 84 882 220
4 Bihar 617591 28227 4453 702 231766 341 1306 615
5 Chhattisgarh 352200 31603 4567 475 69622 849 496 42
6 Goa 68601 1410 258 45 5288 97 158 8
7 Gujarat 1257981 4346 20124 1210 1321098 1574 990 1091
8 Haryana 957912 2969 2512 1835 167267 735 413 196
9 Himachal Pradesh 109716 19164 8376 398 415157 660 640 321
10 Jammu & Kashmir 133787 15000 11082 190 97849 237 1359 197
11 Jharkhand 73571 68043 8334 210 90742 303 1167 544
12 Karnataka 472951 41886 36948 1121 123784 1708 2868 946
13 Kerala 244362 30659 4244 501 79863 367 779 463
14 Madhya Pradesh 1332453 43274 14905 3610 1063279 3392 1703 493
15 Maharashtra 655034 54143 24506 1435 270236 3127 2354 193
16 Manipur 19550 0 0 29 8808 20 0 147
17 Meghalaya 147782 7427 1986 15 3706 234 403 73
18 Mizoram 2990 283 693 3 1976 12 65 23
19 Nagaland 179826 10683 2153 16 4107 305 498 279
20 Odisha 838038 74009 5744 1777 441162 1897 2580 277
21 Puducherry 375349 327 275 1 1110 352 55 121
22 Punjab 511556 9593 10017 756 179092 714 965 1268
23 Rajasthan 421644 2905 51071 738 98671 1268 2760 2560
24 Sikkim 134947 5353 3798 343 609 36 312 371
25 Tamil Nadu 360034 58809 35425 319 281594 594 3930 1642
26 Tripura 88725 30331 1436 23 380 97 516 929
27 Uttar Pradesh 4939634 49458 26610 4175 730755 2564 2198 1608
28 Uttarakhand 243075 16188 9904 175 27500 305 1196 22929 West Bengal 3166925 84762 31206 1461 772409 2844 4727 5930
Total 20406829 796899 354344 24580 8543283 30098 41099 24228
deficiencies have been observed in implementation of
RIDF.
2.79 RIDF is a substantial and cost effective source
of fund for the State Governments for investment in
rural infrastructure, the demand for which always
surpasses its supply. Lakhs of projects in irrigation,
rural connectivity, and other vital sectors are being
financed from RIDF. However, there is no long-term
and assured fund flow for RIDF. The ability of the
State Governments to raise resources is restricted by
41
the borrowing limit imposed upon it under article
293(3) of Constitution. Once an RIDF project is
sanctioned, the State Governments have to match
their funds with the phasing of the project so as to
implement the project within the prescribed timeframe.
The availability of funds is largely contingent upon the
borrowing limit under article 293(3) of the
Constitution. The State Governments therefore need
to earmark adequate funds in their Budgets and their
borrowing plans for completing the RIDF projects.
2.80 The RIDF, with its diversified projects, entails
the participation of many State Govt. Departments.
For timely completion of RIDF project, the staff of
various State Government Departments need to be
adequately trained in handling techno-financial
appraisals of projects under RIDF. Further, State
Governments need to maintain a ‘shelf of projects’, in
the order of priority. Inadequate planning at the grass
root level and mid-term change of priorities has been
found to hamper the grounding of projects.
2.81 RIDF directly contributes to creation of
physical infrastructure and capital formation in rural
areas. The outstanding loans under RIDF have rapidly
increased in the past five years, indicating better
implementation of the projects. However, each drawal
from the RIDF has a shorter repayment period of 7
years, with two years moratorium. This, many State
Governments, view as an impediment in the smooth
implementation and financing of RIDF projects. The
time lags in announcement of RIDF tranche in the
Union Budget in February and allocation of the
bank-wise funds by RBI, to actual submission of RIDF
projects by State Governments and their appraisal
and sanction adds up to inordinate delay in the
process each year. The State Governments are
normally able to ground the projects only in the post-
monsoon period, thereby virtually losing the first year
of the project.
I. Looking Ahead
2.82 Despite lakhs of projects in irrigation, rural
connectivity, and other vital sectors being financed
under RIDF, it is felt that the gigantic gap in rural
infrastructure cannot be bridged by the State
Governments due to their limited resources and
organisational structure. NABARD is looking at
leveraging private resources by implementing specific
projects under the public-private participation (PPP)
model. NABARD is in the process of forming
partnerships with private entities for bringing private
sector competence and funds into the realm of rural
infrastructure through a separate window called NIDA.
2.83 During 2011-12, many new steps were
initiated for the quick grounding of RIDF projects,
based on the recommendations of the PSC. Receipt of
Administrative Approvals (AA) from State
Governments for each project has been made
mandatory before submission of projects to NABARD
for sanction. As projects in the social sector are
accorded less priority as compared to irrigation,
agriculture and rural connectivity projects, 20 per cent
of RIDF allocation has been specifically allocated for
social sector projects. Action has also been initiated for
on-line/web based monitoring of RIDF projects. The
small investments made under RIPF (Box 2.1) would
attract and make feasible larger investments under
RIDF. Consultations/discussions have been in progress
with the Centre for Development of Telematics
(C-DACs), Pune for development of on-line software
funded by RIPF.
I. Warehousing
2.84 In the Union Budget 2011-12, Government of
India (GoI) had made a dedicated allocation of
`2000 crore for financing warehousing under the RIDF.
As on 31 March 2012, total sanctions under the
scheme, stood at `1493.82 crore, to four State
Governments viz., Bihar, Karnataka, Tamil Nadu and
Puducherry.
2.85 In addition, NABARD also introduced a
scheme for providing refinance to banks, against loans
extended by them to private entities and the agencies
owned/assisted by government, for creation of
warehousing infrastructure. Refinance from NABARD
was made available at an interest of 8 per cent for a
42
NABARD set up a Fund titled the Rural Infrastructure
Promotion Fund (RIPF) in 2011 with a corpus of `25 crore
for augmenting the skill sets and technical know-how of
personnel engaged in creation of rural infrastructure. The
Fund was established to address many of the constraints
faced by the State Governments in the implementation of
RIDF projects such as inadequate planning and poor techno-
financial appraisal of projects, improper monitoring and
evaluation, inexperienced Departmental staff engaged in the
implementation of the project etc. The RIPF also aims at
creation of critical, low cost, last-mile rural infrastructure that
would benefit the village community at large and would form
the basis for larger infrastructure projects under RIDF. The
small investments made under RIPF would thus attract and
make feasible larger investments under RIDF.
The RIPF will provide grant support for conducting
knowledge sharing workshops, national/ international
exposure visits for senior level bank/State functionaries,
exchange of technical experts, conduct of evaluation and
other potential mapping studies and surveys as also
creation of experimental infrastructure projects by Gram
Panchayats (GPs), SHGs/SHG Federations, Farmers’ Clubs/
FC Federations and NGOs and villages under VDPs. The
guiding principle for the operation of RIPF will be to solely
support the programmes/ activities that are carried out for
promotion of rural infrastructure.
The Fund, effective from 01 September 2011, has received
15 proposals pertaining to exposure visits, evaluation studies
and creation of experimental projects, out of which 8
proposals amounting `0.56 crore have been sanctioned as on
31 March 2012. Two evaluation studies, i.e., one on “Flood
Protection Projects in Uttar Pradesh” to Indian Institute of
Management (IIM), Lucknow and another on “Irrigation
Projects supported under RIDF in Karnataka” to Centre for
Multi-Disciplinary Research (CMDR), Dharward have been
sanctioned. Similarly, four exposure visit projects by senior
and middle level State Government officials from Himachal
Pradesh, Odisha, Andhra Pradesh and Assam have been
sanctioned. One check dam project has also been sanctioned
as an experimental infrastructure project in Andhra Pradesh.
period of 7 years (including a moratorium of 2 years).
NABARD will also provide financial incentive to those
borrowers, who repay their loans, along with interest,
as per the repayment schedule prescribed by the
Box 2.1: Rural Infrastructure Promotion Fund (RIPF)
financing bank. An aggregate amount of `759.07 crore
was sanctioned and disbursed to banks. With this the
total sanctions against the allocation of `2,000 crore
stood at `2,252.89 crore as on 31 March 2012.
New Business Initiatives
2.86 As part of the new initiatives and expansion of
its development and promotional roles, NABARD is
supporting; i) Producers Organisation by releasing
finance to them, ii) Direct lending to CCBs for short
term multi- purpose credit and (iii) Support to PACS
for developing into multi-service centre (iv) Core
Banking Solutions for co-operative banks and (v)
Setting up of NABARD Infrastructure Development
Assistance (NIDA) to provide credit support for
funding of rural infrastructure projects.
i. Producer’s Organisation Development Fund
2.87 In order to support and finance Producers
Organisations, NABARD set up the “Producers
Organisations Development Fund” with an initial
corpus of `50 crore. During the year, 13 projects were
sanctioned to Producers Organisations and 70 projects
to PACS, respectively with an assistance of `32.29
crore and `7.75 crore, respectively. The cumulative
sanction under the fund was `40.04 crore.
ii. Direct Lending to CCBs
2.88 NABARD has been traditionally providing
refinance support to Co-operative Banks through
SCBs. The implementation of the revival package for
Co-operative Banks as per Vaidyanathan Committee
recommendations has enabled CCBs to raise financial
resources from sources other than the SCB.
43
Accordingly, NABARD has designed a Short Term
Multipurpose Credit Product for financing the CCBs
directly. The product is being offered to financially
strong i.e. ‘A’ & ‘B’ category CCBs. As on 31 March,
2012, `1,547 crore of loans was sanctioned to 26
DCCBs of which `937.74 crore was disbursed.
iii. Developing PACS into Multi-service
Centres
2.89 PACS being registered cooperative societies
have been providing credit and other services to its
members. It has been observed that PACS are
generally meeting only the credit requirements of its
members. In order to enable PACS to provide more
services to their members and generate income for
themselves, an initiative has been taken to develop
PACS as Multi service Centres. This will enable PACS
to provide ancillary services to their members and
diversify its activities. Assistance under PODF is
available to SCBs/CCBs/PACS for this purpose. 2,335
PACS have been developed as Multi-service Centres
so far through various interventions from NABARD.
iv. Core Banking Solutions for Co-operative
Banks
2.90 With changes in banking scenario and to
remain competitive in the market, it is imperative for
Co-operative banks to implement the Core Banking
Solutions (CBS). CBS is the meeting point of the
largest banking services segments, cutting edge
Information Technology and the ever advancing
Communication Technology. It provides the banking
customers with the right products at the right time
through the right channels 24 hours a day, 7 days a
week through a multi location, multi branch network.
NABARD has engaged TCS and WIPRO for
implementation of the project on ASP Model (Box
2.2). In addition, NABARD also extends project
management and advisory support to the DCCB
during roll-out of the product.
2.91 It is expected that the complete roll-out in all
the 162 banks will be over by 31 December 2012. As
on 31 March 2012, 162 DCCBs across 10 states viz,
Chhattisgarh, Gujarat, Karnataka, Madhya Pradesh &
Tamil Nadu (being implemented by TCS), Bihar,
Haryana, Maharashtra, Punjab and Uttar Pradesh
(being implemented by WIPRO) are covered under
CBS project.
v. NABARD Infrastructure DevelopmentAssistance
2.92 NIDA is a new line of credit support for
funding of rural infrastructure projects. NIDA will fund
State owned institutions/ corporations both on-budget
as well as off-budget for creation of rural infrastructure
outside the ambit of RIDF borrowing. The assistance
under NIDA is available on flexible interest terms with
longer repayment period not exceeding 15 years (2-3
years repayment holiday). At the end of March 31,
2012 the major projects sanctioned under NIDA were:
Box 2.2: Application Service Provider (ASP)
Model of CBS
In ASP model, the cooperative banks would be responsible
for setting up the infrastructure facilities within the branch,
HO and other service outlets (PCs, printers, branch servers,
UPS, LAN, switch, etc.), and its regular maintenance. The
CBS vendor will be responsible for developing and
customising the CBS and other application software, setting
up and maintaining the Data Centre/ Disaster Recovery
centres and the network connection from banks to the Data
Centre/Disaster Recovery centres including user training,
regular maintenance and support of related hardware and
software and data migration support. The final payment
structure is a monthly fee, to be paid by the bank directly to
the vendor on per month per service outlet (branch, training
establishment, administrative unit, etc) basis. In this model,
the bank doesn’t have to go in for heavy initial investment
as in the case with ownership model thus making it a more
viable option for small banks like the DCCBs. The banks are
thus using the computing facility as a service on a monthly
payment basis.
44
I. Project for construction of Warehouses of 1.06
lakh MT storage capacity to Karnataka State
Warehousing Corporation. An amount of `29 crore
has been disbursed. The project aims at improving
storage infrastructure for foodgrains.
II. Project for establishment of substation and its
associated transmission systems at Hura in Purulia Dist
in West Bengal to West Bengal State Electricity
Transmission Company involving a term loan of
`92.64 crore of which `3.56 crore was disbursed. The
project aims at supplying quality power to the
agriculture sector specially and rural areas in general.
III. Two solar power plants project with
generation capacity of 2 MW to Gujarat State
Electricity Corporation Ltd. involving term loan of
`16.97 crore. The sites identified for the projects are
unique. One of the sites is the area used for filling fly
ash from the Thermal Power Plants and the other
Canal area of Narmada Project. The Solar Panels
cover on the canal may reduce the evaporative loss of
water. This provides a potential for utilising the canal
area for setting up solar power plants.
IV. Project for establishment of five substations in
Medak, Ananthapur and Karimnagar districs of Andhra
Pradesh and augmentation/modification of other
associated transmission systems on three line, viz. the
Nizamsagar-Banswada, Manubollu-Sullurpet and
Minpur-Jogipet lines to Transmission Corporation of
Andhra Pradesh Ltd. involving a term loan of `140
crore. The project aims at supplying quality power to
the agriculture sector and rural areas.
V. Solar Power project with five MW power
generation capacity was sanctioned to Gujarat Power
Corporation Ltd. involving a term loan assistance of
`42.75 crore.
VI. Two Lift irrigation project to Krishna Bhagya
Jala Nigam Ltd, Karnataka involving a term loan of
`244.08 crore. The project is expected to irrigate
about 40,000 ha of dry land in Bagalkot district of
Karnataka.
VII. Three projects involving term loan of `354.39
crore to Tamil Nadu Generation and Distribution
Company (TANGEDCO) for rehabilitation of power
distribution network damaged by Cyclone THANE.
The cumulative sanctions under NIDA during the year
2011-12 was `890.85 crore and disbursement of
`422.90 crore.
2.93 With the base of agriculture becoming
increasingly smaller (nearly 83 % of holdings are small
who operate 41% of the area), it is inevitable that
small operators will have to compete in the markets
that demand much more in terms of quality and food
safety. Participating in these markets poses challenges,
but they also bring more opportunities. To take
advantage of these, building up institutions and
arrangements based on principles of aggregation are
essential. These would include cooperatives as well as
producers’ organisations and its variants. The new
business initiatives need to be viewed in the above
context.
2.94 Creation of new line of financial support for
DCCBs; bringing cooperatives on a higher technology
platform of CBS to create a level playing field to
compete with the other banks for business and growth;
engaging with the PACS to convert them in to multi
service centers are all such initiatives which eventually
have huge development potential and which are
inclusive in nature. The new business initiatives thus,
are in tune with organisational strategy of ‘business for
development’.
45
NABARD’s development initiatives – on-going and new;
diverse in coverage and inclusive in nature – are
presented in this chapter. Programmes of the Government
of India and the State Governments, implemented in
association with the Banks for the development of
agriculture and rural sectors are also discussed.
Development and Promotional Initiatives
Credit Planning
A. Potential Linked Credit Plans
3.2 NABARD prepares Potential Linked Credit
Plans (PLPs) for all districts in the country every year.
The PLP outline the credit potential in agriculture,
allied sectors and rural development projects in the
district. The PLPs serve as an important tool for banks
in their credit planning excercise. During the year,
PLPs were prepared for the 625 districts in India. The
sector-wise credit projections captured in the PLPs
were utilised for arriving at the credit target for
agriculture and allied sector in particular and priority
sector as a whole for the year, 2012-13.
B. State Focus Paper
3.3 State Focus Papers (SFP) were prepared by the
Regional Offices of NABARD for all the States and
Union Territories (UTs) based on the district-level PLPs.
The SFP presents a comprehensive picture of the
potential available in various sectors of the rural
economy, critical infrastructure gaps to be filled and
linkage support to be provided by various State
Government Departments. Credit Seminars were also
organised by NABARD in all States/UTs, where
discussions on bridging of infrastructural gaps for
facilitating greater flow of credit to the rural economy
were held with the officials of the State Government
departments, financial institutions and other
stakeholders.
C. District Level Offices
3.4 NABARD has 405 District Development
Manager (DDM) offices across the country which focuses
on credit planning, monitoring and developmental and
promotional activities in these districts. In addition, 98
districts are tagged to specific DDM districts.
Farm Sector
A. Watershed Development
3.5 NABARD promotes participatory watershed
development projects with the aim of enhancing the
productivity and profitability of rainfed agriculture in a
sustainable manner. It anchors four watershed
development programmes in the country covering over
1.78 million ha. These programmes are: Indo-German
Watershed Development Programme (IGWDP) in
Maharashtra, Andhra Pradesh, Gujarat and Rajasthan,
Participatory Watershed Development Programme
under Watershed Development Fund (WDF) in 15
States, Prime Minister’s package for distressed districts
in four States, and Integrated Watershed Development
Programme (IWDP) in Bihar, supported by the
Planning Commission.
3.6 The Participatory Watershed Development
programme aims at consolidating isolated, successful
watershed programmes under a national programme.
The programme is financed by the Watershed
Development Fund established in NABARD in 1999-
2000 with an initial corpus of `200 crore. The Fund
was augmented over the years by way of interest
differential earned under RIDF and interest accrued on
the unutilised portion of the Fund. As on 31 March
2012 it has a total corpus of `1,806.03 crore.
III
46
3.7 During the year, 41 watershed projects were
sanctioned, taking the cumulative number of such
projects to 620, covering an area of 5.29 lakh ha. in
15 States, with a total commitment (loan and grant
component) of `239.99 crore. Sixty one projects
graduated to Full Implementation Phase (FIP), taking
the number of such projects to 316.
3.8 The Prime Minister’s Relief package is
implemented in 31 distressed districts of Andhra
Pradesh, Karnataka, Kerala and Maharashtra for
developing 15,000 ha. of watershed annually over two
years in each of these districts. The cumulative area
under this programme is 9.44 lakh ha., with financial
commitment of `1,023 crore. As on 31 March 2012, a
cumulative amount of `429.19 crore was released.
3.9 The watershed projects are entirely grant
based in distressed districts while the assistance is
grant-cum-loan based in non-distressed districts.
During the year, grant assistance of `201.13 crore and
loans worth `5.29 crore were disbursed under these
watershed projects. The cumulative disbursements
under these components were `556.14 crore and
`41.76 crore, respectively. Under the participatory
watershed development programme for Bihar
component of Rashtriya Sam Vikas Yojana (RSVY), a
sum of `17.74 crore was disbursed during the year.
The cumulative disbursement, as on 31 March 2012,
stood at `51.83 crore. The Impact Evaluation findings
of watershed projects is given in Box 3.1.
3.10 NABARD will be routing its support for
enhancement of livelihood and agriculture productivity
under its watershed development programme through
its subsidiaries – ABFL, NABFINS and ADFT. This
arrangement is being pilot tested by way of a project
implemented in three districts of Andhra Pradesh
(Chitoor, Rangareddy and Adilabad) through ABFL.
The project sanctioned under WDF, has a financial
requirement of `6 crore, i.e., `2 crore for each district.
The project will be implemented through good working
MACS. Another Pilot Project for financing watershed
plus’ activities in three watersheds of Chitoor district
was sanctioned to ABFL with a loan component of
`99 lakh which will be utilised for on-lending to
Rahstriya Seva Samiti (RASS) for implementation of
watershed plus activities.
(A) Kannamangala Watershed, Chickballapur District
in Karnataka
• Between 2002 and 2009, cropped area (Rabi) increased
from 157 ha. to 443 ha (182 % increase), orchards
from 88 ha. to 149 ha., wastelands reduced from 85 ha.
to 35 ha. and fallow land reduced by 485 ha. There
was no decline in the water table.
(B) Mid Course Impact Evaluation Study of Four
IGWDP watersheds in Andhra Pradesh
• There was employment generation of 73,217 person days.
• Water storage capacity stood at 35,114 CuM.
• Crops which registered higher productivity levels were
Cotton (32%) and vegetables (29%) in Lakshmipur
watershed; cotton (38%), maize (38%) and red gram
(35%) in Shivarvenkatpur; cotton+redgram (153%),
maize (11%) and kharif paddy (31%) in Kakatiya
watershed and cotton (34%), wheat (34%) and kharif
paddy (32%) in Shettihadapnur.
• Among the watersheds, the real income change was
highest (48%) in Shettihadapnur watershed followed by
Kakatiya (40%), Lakshmipur (15%) and
Shivarvenkatpur (13%).
• The extent of migration has reduced in all the four
watersheds. The level of reduction was the highest in
Kakatiya (52%) followed by Shettihadapnur (35%),
Lakshmipur (35%) and Shivarvenkatpur (22%).
Box 3.1: Impact Evaluation Findings of Watershed Projects
47
B. Village Development Programme
3.11 The Village Development Programme (VDP)
envisages identification of development needs in
consultation with the village community and delivering
an integrated package of promotional and
developmental initiatives for holistic development of
the village. Under Phase-I of the Programme, 877
villages spread across 25 States were identified
through 493 Project Implementing Agencies (PIA)
including Non Governmental Organisations (NGO),
Farmers’ Club and Krishi Vigyan Kendras (KVK). The
programme was completed in 631 villages and is
under different stages of implementation in 178
villages. Implementation of 68 VDPs were
discontinued/ withdrawn due to withdrawal by PIAs,
non involvement of village community, etc. The
programme has been upscaled with the launch of
Phase II from April 2010 which envisages coverage of
1,540 villages. Under this phase, the programme is
being implemented through 457 PIAs in 1,026 villages
spread across 26 States.
3.12 Outcome of the Village Development
Programme (VDP) – Phase I : VDP interventions in
several villages have visibly impacted the lives and
living standards of the village community across the
country. Success stories include, Kapurtunga Village in
Raigarh district, Chhattisgarh; Irlapadu Village in
Nellore district, Andhra Pradesh and Kalliganur Village
in Gadag district, Karnataka. The salient interventions
and their impact in the villages are as follows :
• Comprehensive soil testing and crop-specific
package of practices, covering 100 to 150 farm
fields in each village led to judicious and need-
based use of fertilizers, crop diversification,
changes in cropping pattern, improved seed
replacement, use of low cost compost/ vermi-
compost. This in turn resulted in reduction in cost
of cultivation, varying from 10 per cent to
20 per cent. Productivity in majority of the villages
for lead crops improved between 20 per cent to 40
per cent and income enhancement ranged from 30
per cent to 50 per cent.
• Conduct of awareness and skill development
programmes on crop specific package of practices,
Integrated Nutrient Management (INM)/Integrated
Pest Management (IPM), organic farming, use of
certified seeds, nursery development, promotion of
SRI, etc., led to considerable knowledge-building
in the village community.
• Promotion of allied sector livelihood activities
such as Dairy, Poultry, Fisheries and Non-Farm
sector activities such as cloth painting, embroidery,
carpentry, petty business, Kirana shops was
achieved by conducting workshops, MEDPs and
promoting and nurturing activity-based JLGs,
SHGs, Farmers’ Clubs and VDCs. These
interventions led to generation of part-time
livelihood activities in the agriculture and allied
sectors, formation/revival of Dairy Co-operatives
and Milk Collection Centres, Setting up
establishment of rural marketing outlets and
establishment of market linkages in most villages.
• Hundred per cent financial inclusion was brought
about by the opening of No-Frills accounts, issuing
to all farmers, purveying of investment credit and
issuing of GCC. In all VDP villages, crop loans,
investment credit for allied and non-farm sector
activities and attendant financial services improved
considerably.
• Training Programmes and workshops held under
VDP led to greater convergence of Agriculture
Line Departments, subject matter specialists,
scientists of KVKs and Community-based
organisations such as NGOs, SHGs, FCs, JLGs as
also RFAs.
• 80 to 90 per cent of women folk of the villages
were empowered through various programmes.
Migration of villagers became almost non-existent
from the pre-development stage of 20 to 30 per
cent.
48
• Convergence of Gram Panchayats with district
administration under VDP led to infrastructure
development by way of development of internal
roads, solar lighting, drainage channels,
maintenance of farm ponds, rain water harvesting
structures, construction of drinking water tanks,
village school, community buildings and sanitation
units.
• Health camps, literacy campaigns and educational
activities, sanitation and drinking water led to
improvement in living standards and awareness
levels of the village community.
• VDP also led to integration of various NABARD
programmes, like WDF, TDF, NFS- SDPs, MCID-
SHGs, JLGs, MEDPs, FIPF, FTTF and FCP in the
villages which ensured optimum utilisation of
resources, making NABARD a household name in
these villages.
C. Tribal Development Fund
3.13 The integrated tribal development project
implemented by NABARD through the Tribal
Development Fund (TDF) has “wadi” (a small
orchard) as the core component. The TDF programme,
in its 7th year of implementation, has enhanced
livelihood opportunities for tribal communities, covering
traditional tribal livelihoods (such as bee keeping,
sericulture), organic wadis and mixed wadis (perennial
fruit crops + creeper vegetables + spices) (Box: 3.2).
During the year, financial assistance of `290.63 crore
(`274.11 crore as grant and `16.52 crore as loan) was
sanctioned for 98 projects benefiting 72,419 tribal
families in 16 states. The cumulative sanction as on 31
March 2012 was `1,208.23 crore, covering 3,22,912
families in 415 projects across 26 States/UTs. During
the year, the Fund disbursement was `162.02 crore
(`156.98 crore as grant and `5.04 crore as loan). The
cumulative disbursement under the fund as on 31
• A new Wadi model was introduced by NABARD in
Alirajpur district of Madhya Pradesh to enable farmers to
earn from the very first year of project implementation.
The conventional wadi model, based on cultivation of
perennial fruit crops start generating income for the
farmers from the fourth year onwards.
• The new Wadi model combines the ‘mandap’ system of
vegetable cultivation along with cultivation of perennial
fruit crops. The mandap system supports two types of
vegetables-creeper vegetables grown along the bamboo
supports and GI canopy of the mandap and crops such as
turmeric and ginger that are grown in the shade of the
mandap. The mandap occupies 0.25 acre in a one acre
plot, while 0.75 acre is used for the wadi plantation. The
mandaps are erected by March and creeper vegetables
grown in summer. The creeper vegetables generate an
income of `10,000-15,000 in the summer months. The
Box 3.2: New model in wadi
shade-crops such as turmeric grown under the manadap,
generate an income of `25,000-30,000 in October-
November. Thus, an income of `35,000-45,000 is
obtained from 0.25 acre of land within a few months of
the commencement of the wadi project.
• The wadi (perennial fruit crop) planting commences in
June-August period. The wadi families also benefit from
vegetable/ pulses inter-cropping, from which they are able
to realise an income of `25,000- 30,000. Therefore, in the
new wadi model, farmers generate an income of `50,000 –
60,000 in the very first year of project implementation.
• Some farmers have even realised an income of `1.5 lakhs
in the first and second years by adopting innovative
approaches and improved varieties. The new wadi
approach has helped farmers to achieve financial stability
in a short period and has successfully checked migration
to a great extent.
49
March 2012 was `368.85 crore (`360.07 and grant
and `8.78 crore as loan).
D. Farm Innovation and PromotionFund
3.14 The Farm Innovation and Promotion Fund
(FIPF) provides resource support to innovative
ventures in the Farm Sector. The Fund, created from
the operating profits of NABARD in 2004-05, with an
initial corpus of `5 crore, has grown to `50.00 crore as
on 31 March 2012. During 2011-12, 41 projects were
sanctioned under FIPF in 14 States with financial
assistance of `56.53 crore as grant. Major projects
sanctioned during the year cover various activities
including the following:
• Pilot project for mobile enabled Pallavan m-Kisan
Credit Card, Villupuram district, Tamil Nadu by
Pallavan Grama Bank (Box 3.3)
• Pilot project for promotion of seed business
ventures by Small farmers through seed village
plus approach in Assam, Bihar, Chhattisgarh,
The mobile enabled Kisan Credit Card (m-KCC), was
launched as a pilot project in Villupuram district in Tamil
Nadu on 2nd October 2011. It covers farmers having KCC
accounts with the Pallavan Grama Bank (PGB), a RRB
sponsored by the Indian Bank. The project enables farmers
to transact on their loan accounts with PGB by using their
mobile phones as an interface. To make this possible, the
mobile phones of farmers and vendors/ BCs are registered
with the PGB and with Paymate, the technical service
provider. The transactions are performed through a
combination of secured SIM card and ‘PIN’, using an
Interactive Voice Recording (IVR)/ SMS system. Thus, the
farmers can avoid visiting the branch to transact on their loan
accounts.
The farmers are also given the benefit of using the mobile
interface for entering into cash-less transactions with
agriculture input dealers. For this purpose, the agriculture
input dealers have to open an account with the bank and
have their mobiles registered with Paymate. The farmer can
place orders over their mobiles with the input dealers and
have their loan accounts debited for the amount.
The project will cover 5,000 KCC account holders in 3 years.A total of 5,946 farmers have been registered with m-KCC.
A quick study of the m-KCC project undertaken by the
Indian Institute of Banking & Finance (IIBF), Mumbai reveals
that :
1. The number of transactions ranged between 2-5 under
mobile enabled KCC vis-a-vis single withdrawal under
KCC. The share of benefit accrued due to reduction in
transaction cost indicated that 69 per cent benefit accrued
to the farmer followed by bank at 25 per cent and input
dealer at 6 per cent. Reduction in transaction cost to the
system as a whole, in percentage terms, was maximum for
farmers (1.44 %), followed by Banks (0.41%) and input
dealer (0.10%).
2. Technology enabled card would ensure greater
penetration of KCC and better financial inclusion.
3. Returns per m-KCC (`679) are more than the costs per
m-KCC (`157) indicating viability and sustainability of the
project.
The Study reported the following benefits to stakeholders:
Farmer:
• Savings due to reduced number of trips to the bank
• Reduced interest burden as the farmer was drawing funds
as and when required, instead of withdrawing the entire
loan in a lump sum during his visit to the bank
• Reduction in price or cash discount on input purchase
Bank :
• Better end use of the kind component of credit
• Savings due to fewer transactions in cash
• New merchant business
Input dealers :
• Instant payment
• Increase in business
• Less credit risk
Box 3.3: Pilot Project on Mobile Kisan Credit Card
50
Odisha, Jharkhand, Madhya Pradesh and
Rajasthan.
• Lac Rearing on Palash Trees in Korba district,
Chhattisgarh.
• Project on Permaculture, Karur district, Tamil
Nadu.
• Introduction of Adoptable, Low cost innovative
technology for betelvine plantations, Theni
district, Tamil Nadu.
• Participatory Research and implementation of
technology on protected cultivation of Capsicum
and Paprika, Thiruvarur district, Tamil Nadu.
• Standardisation of Fisheries based Integrated
Farming Technology in Pittoragarh and
Champawat, Uttarakhand.
• Pilot project for Augmenting Farm Productivity in
Balasore district in Odisha.
• Innovations in Summer Groundnut production,
Kannauj district, Uttar Pradesh.
• Farmers’ Training/Awareness Programmes on
Commodity Exchange at Gramin Suvidha Kendra
in Maharashtra, Madhya Pradesh, Gujarat,
Karnataka, Rajasthan and Uttar Pradesh.
3.15 Cumulatively, 164 projects have been
sanctioned as on 31 March 2012, with financial
support of `68.45 crore. Of this, 72 projects with
financial assistance of `3.69 crore have been
completed. Some of the major completed projects are:
• Sustainable upscaling of weather based crop
insurance in Ahmedabad, Anand and Patan
districts, Gujarat.
• Seed purification, multiplication and area
expansion of Navara rice in Palakkad district of
Kerala.
• Sustainable Water Management through
integrated performance management of pumping
systems in Pune district of Maharashtra.
• Augmenting sea weed production in Chilka, Puri
district, Odisha.
• Bio-efficacy studies on Nemato Gro in
Tiruchirapalli district, Tamil Nadu.
• Dissemination of Veterinary herbal healing
techniques for livestock in Sivaganga district of
Tamil Nadu.
• Production, procurement, distribution and
processing of organic milk in Solan district of
Himachal Pradesh.
• Popularising T & D Cross Breed of Pigs in
Ramgarh district of Jharkhand.
• Development of Lac Production System using
High Density Ber Plantations in Ranchi district of
Jharkhand.
E. Farmers’ Technology Transfer Fund
3.16 The ‘Farmers’ Technology Transfer Fund’
(FTTF) was set up in 2008 with a corpus of `25 crore
sourced from the operating profits of NABARD for
facilitating farmers for adoption of appropriate
technologies. The Fund has been augmented to `100
crore from 1 April 2010. During the year, 395
proposals were sanctioned under FTTF in 29 States
with financial assistance of `20.59 crore as grant. The
disbursement during the year was `44.59 crore. Some
of the major proposals sanctioned are as follows:
• Special Relief package for arecanut/ vanilla
farmers in Uttara Kannada district of Karnataka.
• Sustainable Sugarcane Initiative (SSI) in 10
districts of Tamil Nadu.
51
• Development of institutions for promoting
producer companies of farmer produces in
Andhra Pradesh.
• Agriculture Knowledge Management System in
Goalpara district of Assam.
• Seed village programme in various States.
• Support to Farmers’ Club for online marketing of
their produce in Goa.
• IKSL-NABARD Mobile Phone Centric Initiative for
Empowerment of Farmers in 9 districts of Gujarat.
• Integrated Fish Farming in Ranchi district, Zero
tillage in Wheat cultivation in Godda district of
Jharkhand.
• Zero Budget Natural Farming in Alappuzha district
of Kerala.
• Commercial Floriculture in Champawat district of
Uttarakhand.
• Developing Agricultural Entrepreneurs in
Vegetable Seed production in New Delhi.
F. Farmers’ Club Programme
3.17 Farmers’ Clubs are grassroots level informal
forums of farmers. These Clubs facilitate farmers in
accessing credit, extension services, technology and
markets. NABARD sees Farmers’ Clubs as change
agents at the grassroots level. The target of forming
one lakh Farmers Club (FC) by the end of XI plan
period was achived with the formation of 25,243 new
Farmers’ Clubs, taking the total number of clubs to
1,01,951 as on 31 March 2012. Agency-wise, NGOs
promoted maximum number of clubs (15,870),
followed by co-operative banks (4,359), CBs (2,104),
RRBs (2,103) and SAUs/KVKs/other agencies (807)
during the year 2011-12. The region-wise distribution
of clubs indicated that the Eastern region had the
highest share (24.99%), followed by the Central
(24.83%), Southern (18.48%,) Western (16.52%) and
Northern (12.43%) regions, while NER accounted for
(2.75%). As FCs coordinate with banks for ensuring
credit flow and forging better bank-borrower
relationship, the RBI has permitted banks to engage
FCs as Business Facilitators (BF). As on date, 279 FCs
are functioning as Business Facilitators/Business
Correspondents. Farmers Clubs have also been acting
as Self Help Promoting Institutions (SHPI) and 761
FCs have promoted 17,321 Self Help Group (SHG) of
which 9,642 SHGs have been credit linked. FCs have
also promoted and credit linked 268 Joint Liability
Group (JLG). Farmers’ Clubs are provided with
information on weather, market prices, crop advisory
services through SMS on mobile phones and 36,654
connections have been provided to farmers / Farmers’
Clubs as on 31 March 2012, as part of an ICT
initiative. Five Farmers’ Training and Rural
Development Centre (FTRDC) have been provided
grant assistance aggregating to `57.97 lakh under
FTTF as on 31 March 2012.
3.18 A NABARD initiated pilot project for
development of specialised cadres of farmers from
amongst the members of Farmers’ Clubs, in the areas
of Technology Transfer, Credit Counselling and
Market Advocacy is underway. As on 31 March 2012,
31 projects have been sanctioned with a grant
assistance of `62.65 lakh in 15 States viz., Arunachal
Pradesh, Bihar, Haryana, Jharkhand, Karnataka,
Kerala, Maharashtra, Meghalaya, Odisha, Punjab,
Sikkim, Tamil Nadu, Uttar Pradesh, Uttarakhand and
West Bengal. So far 443 farmers have been trained as
Master Farmers. They have imparted training to 5,109
farmers through 593 training programmes. As on
date, 50 Federations of Farmers Clubs are operating in
14 States while 8,232 FCs in 3 States were registered
as legal entities. NABARD has entered into an MoU
with the Mahatma Phule Krishi Vidyapeeth, (MPKV),
Rahuri in Maharashtra, for preparation of CDs/VCDs/
Brochures/Pamphlets on agriculture and allied activities
for use by farmers, formation of Farmers Scientists
Forum arranging training and exposure visits for
52
adoption of technology, implementing the Seed Village
concept together with the State Department of
Agriculture for self-sufficiency in seeds, thereby
ensuring quality of seeds and effecting cost saving of
seeds, promoting NABARD’s Farmers’ Clubs through
KVKs and other activities leading to agriculture and
rural development.
G. Capacity Building for Adoption ofTechnology
3.19 The ‘Scheme for Capacity Building for
Adoption of Technology’ (CAT) uses training and
exposure visits as a means of sensitising farmers on
adoption of new/ innovative methods of farming.
During the year, 339 exposure visits of 9,197 farmers
were arranged in collaboration with select research
institutes, KVKs and SAUs. The areas covered were
precision farming, hi-tech agriculture, tissue culture
banana, fodder development, organic farming, drum
seeding, sustainable agriculture practices, cattle
management, pisciculture, vegetable seed
multiplication, etc.
H. Government Projects
3.20 NABARD continued to implement/coordinate
the following area specific projects of the Government
of India (GoI).
i. Cattle Development Projects (CDP)
3.22 NABARD is the co-coordinating agency and
facilitator for channelising and utilisation of funds
under CDP, project supervision and monitoring.
Against a total financial outlay of `27.22 crore, GoI
released `25.39 crore; with utilisation at `25.37 crore.
While 100 Cattle Development Centres have been
established in each State, 16 District Dairy Farmers’
Associations have been formed in Uttar Pradesh and
13 in Bihar.
ii. Special Project on Livelihood BasedDevelopment
3.22 The Special Project on Livelihood Based
Development was sanctioned under Swarnajayanti
Gram Swarozgar Yojana (SGSY) by GoI in 2006-07
for implementation in Sultanpur and Raebareli districts
of Uttar Pradesh. The project aims at covering 8,000
Below Poverty Line (BPL) families under Multi-activity
Approach for Poverty Alleviation (MAAPA) and 15,000
financially very needy youth under Demand Driven
Skill Development (DDSD) through Livelihood
Advancement Business School (LABS) in the two
districts. The cost of the project is `14.97 crore for
Sultanpur and `14.90 crore for Raebareli. NABARD is
the project holder while BAIF and Dr. Reddy
Foundation are the implementing agencies for the two
components. The project period of both the projects
is over. However, in order to take the activities already
initiated to a logical conclusion, the agency’s request
for extension of the project implementation period
upto March 2013 has been recommended to the
Government. During 2011-12, `0.51 crore and `1.72
crore were released to Sultanpur and Raebareli
districts, respectively, taking the cumulative
disbursement to `9.49 crore and `9.44 crore.
I. Externally Aided Projects
3.23 NABARD received `96.93 crore and disbursed
an amount of `130.82 crore as grant/loan assistance
during the year under the KfW supported externally
aided projects. Further, an amount of `3.59 crore was
disbursed as grant assistance as against `1.77 crore
received from GIZ under UPNRM and RFI Programme
(Table 3.1).
a. Adivasi Development Programme inGujarat and Maharashtra
3.24 The KfW-NABARD-V-Adivasi Development
Programme in Gujarat is implemented in Valsad and
Dangs districts through BAIF since 1994-95, with an
outlay of `67.25 crore. The focus of the programme is
“wadi”, (a small orchard of mango and cashew nut),
with components of soil conservation, water resources
development, women/landless family development and
health. The programme has covered 13,663 families
from 162 villages, as against a target of 10,000
families. A total area of 12,732.5 acre was brought
53
Table 3.1: Externally Aided on-going Projects(As on 31 March 2012)
(` Lakh)
Sl. Name of the Project Effective Closing External Disbursements Amount receivedNo. from date assistance made by NABARD by NABARD
(million) During Cumm. During Cumm.2011-12 Upto 2011-12 upto
31.03.12 31.03.12
1. KfW-NABARDi. V-Adivasi Development 23 Dec 1994 31 Dec 2011 13.29 Grant) 584.92 8980.15 523.63 8994.57
Programme in Gujarat* (+ 1.5 Suppl.
ii. IX-Adivasi DevelopmentProgramme in Maharashtra 2 June 2000 31 Dec 2011 14.32 352.00 7928.87 441.18 8037.03
iii. Indo-German WatershedDevelopment Programme inAndhra Pradesh 15 July 2002 31 Dec 2013 8.69 1373.25 3964.27 929.48 3363.77
iv. Indo-German WatershedDevelopment Programme inMaharashtra (Phase III) 27 Aug 2005 31 Dec 2012 19.94 2611.64 11295.50 2024.05 10519.61
v. Indo-German WatershedDevelopment Programme inGujarat 17 Feb 2006 31 Dec 2015 9.20 645.00 1461.87 573.79 1363.70
vi. Indo-German WatershedDevelopment Programme inRajasthan 7 Dec 2006 31 Dec 2016 11.00 620.53 1493.23 546.84 1188.96
vii. Adivasi DevelopmentProgramme in Gujarat(Phase II)* 28 March 2006 31 Dec 2014 7.00 combined figures given at item (i) above
viii. KfW-Sewa Bank Project 28 June 2002 31 Dec 2013 4.09 291.88 1243.01 294.83 1255.57
2. KfW-Umbrella Programme for Natural Resources Management (UPNRM)
i. FC Loan 16 Sept 2009 30 Dec 2014 FC Loan : 6275.51 12473.45 4099.26 9510.50 15.00
ii. FC Grant 16 Sept 2009 30 Dec 2014 FC Grant : 16.09 32.21 (-)64.01 33.11 1.4 @@ @
iii. Grant for Accompanying 16 Sept 2009 31 Dec 2014 FC Grant 311.57 669.42 323.90 697.31Measures for Accompanying
Measures : 3.00
3. Technical Component (TC)xx.Assistance from GIZ
i GIZ – UPNRM – TC 26 Jul 2010 31 Dec 2014 8.5 62.51 116.57 51.40 143.93
ii GIZ-RFIP 1 Jan 2009 31 Dec 2013 12.5 296.89 463.34 125.20 303.78 (of which 0.1 isFC component)
FC - Financial Cooperation SEWA - Self Employed Women’s Association@: An amount of `66.91 lakh was received from KfW during 2011-12, an amount of `130.92 lakh pertaining to service charge of FC
loan claimed inadvertently from KfW during 2009-10, 2010-11 and 2011-12 and booked under FC grant, was adjusted toAccompanying Measures (as advised by KfW). Hence the balance is shown as negative. The cumulative receipt of FC grant alsoreflects this transaction.
@@: Includes only the disbursement made under FC grant and the service charges thereon. The service charges for FC loans includedduring the previous years have been removed from the cumulative FC disbursement figures.
54
under wadi, against the target of 10,000 acre. Phase I
of the programme stands closed on 31 March 2011.
Phase II (2006-2014) is under implementation, for
which, KfW has sanctioned a grant assistance of
7 million (approx. `38.15 crore), covering 4,700
families in these districts. Under this Phase, as on 31
March 2012, 5,922 families have been identified,
5789.5 acre of wadi established and 253 wadi tukadis
(group of 8-10 wadi holders) formed. The Adivasi
Development Programme in Maharashtra was
implemented in Nashik and Thane Districts since
2000 with KfW assistance of 14.32 million (`82.22
crore). 13,848 families have been covered by the
project as against a target of 13,000 families and
wadi area coverage reached 12,293.5 acres as against
a target of 10,000 acres. The programme was closed
on 31st December, 2011.
b. IGWDP-Maharashtra, AndhraPradesh, Gujarat and Rajasthan
3.25 The Indo-German Watershed Development
Programme (IGWDP), introduced in Maharashtra
under the bi-lateral aid agreement between the Indian
and German Governments, is an integrated
programme implemented by Village Watershed
Committee (VWC) in association with NGOs for
regeneration of natural resources and Phase I (1990-
2000) and Phase II (2001-2007) of the programme
were successfully completed, covering 95 watersheds
on 1.02 lakh ha. At present, the Phase III (2005-
2012) of the programme is under implementation,
which was started in January 2005. Under Phase III
(2005-12), 114 watershed projects have been
sanctioned since 2005, covering an area of 11,07,916
ha. in 18 districts of Maharashtra. Of these, 10
projects have been completed, 4 terminated and 100
projects are in Full Implementation Phase (FIP) stage.
During the year, grant assistance of `26.12 crore was
disbursed, taking the cumulative disbursement to
`112.96 crore.
3.26 In addition to Maharashtra, the IGWDP has
been extended to three States; viz., Andhra Pradesh,
Gujarat and Rajasthan. KfW, Germany has committed
a grant assistance of euro 8.69 million (about `48.66
crore) under IGWDP in Andhra Pradesh for
rehabilitation of watersheds in four districts (Adilabad,
Karimnagar, Medak and Warangal). Thirty eight
projects covering an area of 4,16,436 ha. are being
implemented under this programme. Of these, 36
projects have been completed and two were
terminated. KfW has approved an additional amount
of euro 2 million (about `11 crore) towards
Complementary Measures Programme for capacity
building of stakeholders. RODECO, an international
consulting agency, was associated with the programme
till December 2011 to support the capacity building
issues of projects of IGWDP-AP. During the year,
grant assistance of `13.73 crore was disbursed taking
the cumulative release to `39.64 crore.
3.27 The IGWDP in Gujarat envisages
rehabilitation of watersheds in four districts (Dahod,
Panchmahal, Sabarkantha and Vadodara) with a
commitment of Euro 9.2 million (approx. `51.52
crore). Thirty three projects covering an area of
37,884 ha. are being implemented under this
programme. Of these, 26 projects are in FIP, one
project in Feasibilty Study Report (FSR) stage and 6
projects are in Capacity Building Phase (CBP) stage. A
Programme Management Unit (PMU) has been set up
at Dahod to oversee the implementation from close
quarters with the help of three consultants. SHG
federations have been constituted in two watersheds
and provided support for on-lending to women SHGs
formed in the project villages. During the year, grant
assistance of `6.21 crore was disbursed taking the
cumulative release to `14.93 crore.
3.28 KfW, Germany had committed grant assistance
of euro 11 million (about `61.60 crore) under the
IGWDP for watershed development in five districts of
Rajasthan (Banswara, Chittorgarh, Dungarpur,
Pratapgarh and Udaipur). Thirty Five projects covering
an area of 35,745 ha. are being implemented under
this programme, of which 20 projects are in FIP,
55
9 projects in FSR stage, 3 projects in CBP stage and 3
projects were terminated. A Programme Management
Unit (PMU) has been set up at Udaipur to oversee the
implementation from close quarters with the help of
four consultants. During the year, grant assistance of
`6.20 crore was disbursed taking the cumulative
release to `14.93 crore.
c. “KfW-NABARD - SEWA Bank -Capitalization of Rural FinancialIntermediaries”
3.29 The objective of “KfW-NABARD-SEWA Bank -
Capitalization of Rural Financial Intermediaries” is to
improve the access of the rural and urban poor
women to micro credit in Ahmedabad and
Gandhinagar Districts of Gujarat State by establishing
a rural department in SEWA Bank, opening Extension
Counters (ECs) and enabling outreach of credit to
rural and urban clientele. While SEWA Bank is the
Project Executing Agency, NABARD serves as the
Financial Channelising Agency. The Board of
Management of the project consist of representative of
NABARD-Head Office, implementing RO of NABARD
and Managing Director-SEWA Bank. The project
intends to transfer the lending operations of Rural
District Associations (RDA), which presently function
like federated entities in two districts. The project
commenced its operations in July 2007. The full
implementation phase of the project began in
December 2009 and is expected to be completed by
December 2013. The cumulative amount disbursed
under this project to SEWA Bank upto 31 March 2012
stood at `1,255.57 lakh.
d. Umbrella Programme on NaturalResource Management
3.30 The Umbrella Programme on Natural
Resource Management (UPNRM) is a loan-cum-grant
based Indo-German programme being implemented
since 2007-08 by NABARD in collaboration with KfW
and GIZ. It aims to boost rural livelihoods by
supporting community-managed sustainable natural
resource management projects. It is a shift from
(i) project- based to programme-based funding and
(ii) grant-based to loan-based funding. The total fund
envisaged under the programme is 30.90 million
( 19.40 million from KfW, 8.50 million from GIZ
and 3.00 million from NABARD). The progress
under UPNRM is given in the Table 3.2.
3.31 An amount of 6.181 million as Financial
Co-operation (FC) loan, 0.101 million as FC grant
and 0.496 million as Accompanying Measures (AM)
were received from KfW and `0.514 crore from GIZ
under Technical Component (TC) during the year. The
cumulative FC Loan, FC grant and AM received from
KfW were 15.00 million, 0.258 million and
1.103 million, respectively. A success story of
UPNRM proposal is detailed in the Box 3.4.
Table 3.2: Progress under UPNRM(As on 31 March 2012)
` crore
No. of Projects Amount Sanctioned Amount Disbursed
During the year Cumulative During the year Cumulative
During the year 40 Loan 53.88 Loan 199.92 Loan 62.86 Loan 124.83
Cumulative 104 Grant 3.32 Grant 13.03 Grant 3.17 Grant 7.06
Total 57.28 Total 212.95 Total 66.03 Total 131.89
Implementing agency: NGO, MFI, Producers’ Companies, Private Limited Companies and Co-operatives16 States covered under UPNRM (Andhra Pradesh,Bihar, Gujarat, Karnataka, Maharashtra, Odisha, Tamil Nadu, Kerala, West Bengal, Himachal Pradesh, Madhya Pradesh, Uttarakhand, Jharkhand, Uttar Pradesh,Arunachal Pradesh and Rajasthan) and one UT (A & N Islands)
56
J. Policy and PromotionalInterventions-FinancingAgricultural Investments in theEastern Region – ConcessionalRefinance Support
3.32 With a view to facilitating institutional credit
flow for key investments that have a direct bearing on
enhancing crop productivity in the Eastern Region,
NABARD introduced a concessional refinance support
scheme for this region. The scheme envisages
extending refinance support at a concessional rate of
7.5 per cent per annum (p.a) and covers seven states
in the Eastern Region, viz., Assam, Bihar,
Chhattisgarh, Jharkhand, Odisha, West Bengal & Uttar
Pradesh (28 districts). The key activities qualifying for
concessional refinance support under the scheme,
include (a) Water Resources Development (b) Land
Development (c) Farm Equipment and (d) Seed
Production units.
3.33 The total lending target of the banks for the
financial year 2011-12 was `3,912 crore. With a view
to ensuring adequate credit flow for the selected
activities, the minimum lending level against the
targets was prescribed for banks to become eligible for
the concessional refinance. Minimum level for the
year 2011-12, was fixed at 50 per cent of the target
allocated for Commercial Banks and 25 per cent for
RRBs and Co-operative Banks. Under this scheme,
NABARD also extended support to the banks for
related interventions like forming and linking JLGs,
organising sensitisation meets for the branch officials
of implementing banks, training and capacity building
needs of entrepreneurs identified under the scheme.
To give a fillip to the milk procurement and marketing
activities at Chittoor, the District Rural Development Agency
(DRDA) in association with two private dairies established
Bulk Milk Chilling Units (BMCUs) in 82 places. Four of the
BMCUs were manned by two Mandal Mahila Samakhya
(MMS), Mandal level SHG Federations (2 each) that collected
milk from women dairy farmers at the grass roots level. The
Dairies paid the MMS chilling charges of `0.65 per litre of
milk. On account of low milk availability from the members
of MMS, only around 1/3rd of the installed capacity of the
BMCUs were utilised. DDM, NABARD in consultation with
the DRDA (Chittoor) prepared UPNRM projects for these two
MMS in the district. The interventions covered in the UPNRM
project included purchase of quality animals by the women
members along with requisite investments for raising green
fodder; grant support to the MMS for providing veterinary
services, azolla cultivation, motorised chaff cutters in villages,
capacity building for farmers and organising animal health
camps in their area of operation. The financial assistance
sanctioned was `104.14 lakh (`92.46 lakh as loan and
`11.68 lakh as AM) to both the projects.
Box 3.4: UPNRM Projects – A success story of Kamadhenu project in Chittoor district
The impact was substantial and milk procurement increased
from 233 to 500 per cent in the 4 BMCUs. Three of the 4
BMCUs which were to be closed or merged had completely
turned around and are presently running in profits.
In September 2011, coinciding with the centenary celebrations
of the district, the Hon’ble Chief Minister of Andhra Pradesh
directed the District administration to increase milk
procurement by the MMS to around 5 lakh litres per day from
the existing 2.2 lakh litres. Accordingly, the DRDA (Chittoor) in
consultation with NABARD, prepared a detailed project report
(based on the successful UPNRM project model) covering 65
BMCUs and presented the same to the bankers forum. The
bankers welcomed these proposals and process is on in 111
branches of 11 banks in the district. The project was officially
launched on 21 September 2011. As on 31 March 2012,
around 13,500 SB accounts were opened, loan documentation
completed for more than 12,800 cases and loan sanctioned for
11,723 units with credit flow estimated at `73.8 crore. Thus, a
small initiative under UPNRM was accepted by the banking
community as a profitable portfolio, and mainstreamed,
benefitting a larger rural population.
57
K. New Initiatives
a. Pilot Project for Augmenting FarmProductivity in Select Districts
3.34 This project has been designed by NABARD,
at the behest of the Ministry of Finance, as a
comprehensive package for augmenting farm
production and productivity by addressing all
interlinked components of farming as an economic
activity, viz., agricultural inputs, technology, credit,
post-harvest management, value addition and
marketing in a holistic manner. The project
components comprise interventions in agriculture
extension, crop management, marketing of produce,
livelihood development including interventions in
animal husbandry and financial inclusion. The project
aims at strengthening the support systems available to
farmers in respect of major crops and activities in the
identified districts by involving public and private
sector organisations on a Public Private Participation
(PPP) mode and dovetailing resources of various
Government agencies. Accordingly, one district has
been selected in each of the identified 11 states for the
implementation of the captioned project, viz., Bihar
(Bhojpur), Chhattisgarh (Bilaspur), Haryana (Sirsa),
Jharkhand (Deoghar), Karnataka (Belgaum),
Maharashtra (Yavatmal), Madhya Pradesh (Shahdol),
Odisha (Balasore), Rajasthan (Bikaner), Uttar Pradesh
(Azamgarh) and West Bengal (Nadia). NABARD has
prepared project reports keeping in view the following
important factors:
• Lead crops covering 80 per cent or more cropped
area and one or two major allied activities
• The existing backward and forward linkages
• Problem constraints in increasing the production
and productivity
• Availability of partners and their roles
• Models of extension that would work for the
district
• ICT medium, post production facilities including
marketing linkages & storage
• Areas of convergence along with the financial
implications for a period of three years.
3.35 The Pilot Project at Balasore District in Odisha
has been sanctioned with a total financial outlay of
`3,211.86 crore, including a grant component of
`48.08 crore to be supported under the FIPF, for a
period of three years i.e., from 2012-13 to 2014-15.
The project was formally launched on 24 April 2012.
b. Pilot Project on AugmentingProductivity of Lead Crops
3.36 This was launched by NABARD in 2009-10
with the objective of increasing the yield of lead crops
by adopting sustainable agricultural practices, effecting
reduction in cost of production and facilitating value
addition, so as to improve the standard of living of
the rural farming community. The project is being
implemented using the cluster approach. Each cluster
comprises five villages and 4-6 such clusters per state
have been selected for implementation of the project.
As on 31 March 2012, 50 projects covering 250
villages were launched with a financial commitment of
`21.58 crore and disbursement of `6.09 crore has
been achieved.
c. System of Rice Intensification
3.37 System of Rice Intensification (SRI) is a
combination of simple agronomic and management
practices that improves productivity. A project of 150
Model Units covering 28,800 ha. and 84,000 farmers,
was launched in June 2010 in 13 identified States for
implementation over a period of three years, with total
financial outlay of `25.68 crore. Cumulatively, 175
units have been sanctioned with a Total Financial
Outlay of `25.19 crore and an amount of `15.60 crore
have been disbursed. The project is implemented in
an area of 22,503 ha. covering 97,000 farmer in 2,380
villages across 12 States.
58
A. NABARD-SDC Rural InnovationFund
3.38 NABARD constituted the Rural Innovation
Fund (RIF) with a corpus of `140 crore in
collaboration with the Swiss Agency for Development
and Cooperation (SDC) in 2005-06. The Fund
supports innovative, risk mitigating experiments in
Farm, Non-Farm and micro-Finance sectors with
potential to promote livelihood opportunities in rural
areas. During the year, 108 new innovative projects
were sanctioned support of `7.94 crore, taking the
cumulative number to 483. With these projects, the
cumulative commitment made until 31 March 2012
has reached `57.22 crore (up from `49.28 crore as on
31.3.2011). An amount of `10.24 crore has been
disbursed during the year for 483 projects taking the
cumulative disbursements to `43.23 crore. Of this 150
projects have been completed and 67 projects are in
the advance stages of implementation.
B. Strengthening of Rural Haats
3.39 As rural ‘haats’ (local markets) play an
important role in rural economy, NABARD launched
the ‘Scheme for Strengthening of Rural Haats’ in
1999. Under the scheme, grant support of `3.71 crore
was sanctioned to 76 rural haats during 2011-12.
Cumulative grant assistance of `16.90 crore has been
sanctioned for 383 rural haats across 23 States till
now.
C. Rural EntrepreneurshipDevelopment Programmes andSkill Development Programmes
3.40 For generating self-employment and wage
employment opportunities in rural areas, NABARD has
been supporting Rural Entrepreneurship Development
Programmes (REDP) and Skill Development
Programmes (SDP) since the early 1990s. As on 31
March 2012, 9,852 REDPs/ SDPs with an amount of
`13.09 crore were sanctioned. Cumulatively, 27,711
REDPs/SDPs with grant support of `96.45 crore have
been supported which are estimated to have covered
around 6.93 lakh unemployed rural youth. This
includes support extended to RUDSETI (Rural
Development & Self Employment Training Institute)/
RUDSETI type institutions/R-SETIs (Rural Self
Employment Training Institutes) for incurring capital
and/or recurring expenditure. During the year,
NABARD had started a vocational training on a pilot
basis with collaboration of “PanIIT Alumni Reach for
India” (PARFI), an organisation created by IIT alumni
(Box 3.5).
Rural Non-Farm Sector
• In a first-of-its-kind-intervention, NABARD and “PanIIT
Alumni Reach For India (PARFI)”, an organisation created
by IIT alumni, have come together to pilot a loan-based
approach to vocational training of blue-collar entry level
workers like masons, welders, cooks, technicians and
drivers. NABARD provides Revolving fund-assistance to
PARFI, which, further on-lends to NGO’s who select poor
rural youth and finance them with a vocational education
loan at 8.5 per cent p.a. The loan for the training is
guaranteed by the mother of the trainee. The mother
needs to be a member of SHG/JLG so that social and
peer pressure would ensure timely repayment of loan.
• NABARD has sanctioned `4.76 crore towards training of
8,000 youth over 3 years. As of January 2012, over 800
students have been trained through this model with a 100
per cent placement rate.
• The initial experience shows that this model can be upscaled.
Box 3.5: Vocational training through micro-loan: PanIIT-NABARD model
59
D. Cluster Development
3.41 NABARD has been implementing the Cluster
Development Programme under the National
Programme on Rural Industrialisation (NPRI) from
1999-2000. As on 31 March 2012, 120 clusters across
110 districts in 22 States have been approved. These
include 57 handloom clusters, 43 handicraft clusters, 7
Rural Tourism, 7 food processing clusters, 2 each of
Leather, Blacksmiths and 2 NPRI clusters, and one
each of Bee Keeping. All the clusters are in different
stages of implementation. During 2011-12, 07
participatory clusters were approved. As many as 23
clusters are being supported in the North Eastern
region alone and large numbers of clusters are being
developed in backward States like Chhattisgarh,
Jharkhand, Odisha and Madhya Pradesh. For smooth
implementation and monitoring of the initiative, 5
capacity building programmes/ workshops were
organised for the participants from banks, government
departments, NGOs, etc., during 2011-12.
3.42 As a part of the programme, grant-cum-loan
including venture like assistance was sanctioned during
the year amounting to `120.35 lakh. A sum of
`331.95 lakh was disbursed during the year towards
implementation of the Cluster Development
programme.
E. Marketing/Other initiatives
3.43 NABARD recognises the importance of
developing marketing opportunities for the highly
unorganised rural producers, especially artisans. In
order to directly linking rural producers with markets,
NABARD supports their participation in Melas/
Exhibitions. During 2011-12, 537 marketing events/
exhibitions/melas across the country were supported
with grant assistance of `2.84 crore. NABARD
continued to co-sponsor the Saras Mahalaxmi Fair at
Mumbai, wherein 130 artisans and 61 agencies from
28 States participated in a 15-day long exhibition.
This year, for the first time, payment through credit
card was permitted to enhance the quantum of sales.
F. Swarojgar Credit Card Scheme
3.44 Swarojgar Credit Card (SCC) Scheme was
introduced in September 2003 for providing adequate
and timely credit to small artisans, handloom weavers,
other micro-entrepreneurs, SHGs, etc., from the
banking system in a flexible, hassle free and cost
effective manner. During the year, 94,479 SCCs
having credit limit of `495.81 crore were issued for
facilitating hassle-free credit for investment and
working capital requirements of small/ micro
entrepreneurs. The cumulative number of SCCs
issued was 13.06 lakh involving credit limit of
`5,445.32 crore.
Financial Inclusion
3.45 Two dedicated funds, the Financial Inclusion
Fund (FIF) and the Financial Inclusion Technology
Fund (FITF) were set up in NABARD during 2007-08,
in keeping with the recommendations of the
Rangarajan Committee on Financial Inclusion for
providing timely and adequate credit to vulnerable
groups at an affordable cost. The ‘Financial Inclusion
Fund’ (FIF) supports developmental and promotional
interventions leading to financial inclusion and
‘Financial Inclusion Technology Fund’ (FITF) supports
investments in meeting the cost of technology
adoption aimed at promoting financial inclusion. The
corpus of each fund is `500 crore, to be contributed
by the GoI, RBI and NABARD in the ratio of 40:40:20
in a phased manner over five years. As on 31 March
2012, the contribution to these Funds stood at `79.32
crore (FIF) and `130.49 crore (FITF). The Funds are
managed by NABARD as per the directions given by
the Advisory Board for FIF and FITF. The Advisory
Board met thrice during the year.
60
A. Policy initiatives
3.46 The following policy initiatives were taken
during the year:
I. Financial Inclusion by RRBs through BC
model using card based ICT Solution – ASP
Model for Financial Inclusion (ICT) -
Support from FITF - It has been decided to
support the RRBs implementing ICT through
Application Service Provider (ASP) Model.
II. Support for CBS to weak RRBs from FITF -
It has been decided to support the identified weak
RRBs for CBS implementation through ASP
Model
III. Holding of Financial Literacy Awareness
Camps by RRBs - NABARD will reimburse
expenditure incurred by RRBs for holding
financial literacy awareness camps in each of the
2000+ villages allotted to them from the Financial
Inclusion Fund (FIF) at the applicable rate (100%
or 80% of actual cost depending upon the State)
subject to a maximum of `10,000 per programme.
B. Major Projects
i. Support for CBS for weak RRBs
3.47 Under the scheme of support to 28 identified
weak RRBs for CBS installation, proposals were
received from 27 RRBs as on 31 March 2012, against
which assistance was sanctioned to 26 RRBs for
`216.52 crore with disbursements amounting to
`139.54 crore.
ii. Application of ICT Solution in BC/BFmodels by RRBs
3.48 The projects involve application of ICT based
solutions by RRBs in their BC model so as to enable
them to cover all the villages in their jurisdiction. As
on 31 March 2012, grant assistance of `107.07 crore
has been sanctioned to 53 RRBs under FITF as against
which disbursements were of the order of
`40.52 crore.
iii. Establishment of Financial Literacyand Credit Counseling Centre (FLCC)
by Lead Banks
3.49 Under the scheme, support is being provided
from FIF for establishment of FLCCs by Lead Banks in
256 excluded districts and 10 disturbed districts. As on
31 March 2012, `10.71 crore has been sanctioned to
Lead Banks in 128 districts of 12 States viz., Assam,
Bihar, Manipur, Meghalaya, Rajasthan, West Bengal,
Uttar Pradesh, Jharkhand, Madhya Pradesh,
Maharashtra, Odisha and Gujarat for setting up
FLCCs.
iv. Financial Literacy through Audio Visualmedium – Doordarshan
3.50 Grant assistance of `3.28 crore was provided
from FIF to Doordarshan for producing and directing
a half an hour financial literacy programme in Hindi,
to be telecast in six centres (DD Kendras of Lucknow,
Bhopal, Patna, Jaipur, Raipur and Ranchi). The
programme has already been telecasted by the
Bhopal, Ranchi, Jaipur and Patna Kendras, whereas
the work is under progress in Lucknow and Raipur
Kendras.
v. Micro Pension Model – Support to InvestIndia Micro Pension Services
3.51 NABARD extended support to the extent of
`2.25 crore from the FIF to Invest India Micro
Pension Services to pilot test a micro pension model
among SHG members in 8 districts of 4 States, viz.,
Odisha, Uttar Pradesh, Bihar and Tamil Nadu. The
project aims at covering 40,000 rural poor under the
old-age pension scheme. So far, `1.74 crore have
been released covering 16,395 persons.
vi. Engaging Farmers’ Club as BF by RRBs
3.52 Financial support is being extended by
NABARD for Farmers’ Clubs acting as Business
Facilitators of RRBs in villages having 2000+
population in their command areas. As on 31 March
61
2012, `2.08 crore sanctioned to 22 RRBs in 12 States
from FIF.
vii. Engaging SHGs as BC/BF by RRBs
3.53 Support is available from the FIF to RRBs for
engaging “Authorised functionaries of well run SHGs
linked to Banks to act as BC / BF”, with the purpose
of extending financial services in semi-urban and rural
areas in their command area. As on 31 March 2012,
8 RRBs were sanctioned `43.81 lakh for training of
authorised functionaries of well-run SHGs in 6 States.
viii.Geographical Information System forfinancial Inclusion
3.54 NABARD has sanctioned and released `21.71
lakh to National Informatics Centre for development of
web-based GIS Application for assessing the reach and
extent of banking in India and also development of a
web- based MIS for capturing the banking facility.
C. Fund Utilisation
3.55 As on 31 March 2012, the cumulative
sanctions under FIF and FITF were `114.62 crore and
`343.48 crore respectively and disbursements `36.46
crore and `184.16 crore, respectively. The year-wise
achievements are given in Table 3.3.
D. NABARD-UNDP Collaboration forFinancial Inclusion
3.56 UNDP-NABARD Financial Inclusion Fund was
established in NABARD to provide better access to
financial products and services for reducing risks and
enhancing livelihood opportunities for the poor,
especially SC and ST, minorities and the displaced.
`46.97 lakh had been utilised during 2011-12 for
activities conducted by NABARD in the seven States
of Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh,
Odisha, Rajasthan and Uttar Pradesh.
E. GIZ-NABARD Rural FinancialInstitutions Programme (RFIP) –Component IV
3.57 NABARD and Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) together
conducted a study on Remittance Needs and
Opportunities in India. The study address the issues of
improving financial services for domestic migrants by
improving delivery channels, especially through
Business Correspondents upgrading payment systems
for small value money transfer and strengthening
financial institutions for providing adequate remittance
facilities as well as other financial services through
enhanced financial education. The study covered four
specific remittance corridors: Gujarat-Southern
Rajasthan, Eastern UP-Mumbai, Odisha-Hyderabad/AP
and intra-state migration and remittance in
Maharashtra. The study concluded that sending
remittances could be faster, easier and more secure,
when the significant problems of sending money
through the formal banking system over long
distances - which migrants and the recipients in India
are currently facing is removed. The component IV of
the RFIP aims at involving more number of service
providers for remittances. The identification of area/
institution for launching the pilot project is in progress.
Table 3.3: The progress under FIF & FTTF(As on 31 March 2012)
(` in crore)
Name of the Fund 2008-09 2009-10 2010-11 2011-12 Cumulative up toMarch 2012
S D S D S D S D S D
FIF 1.30 0.36 18.36 7.99 19.00 9.21 75.96 18.90 114.62 36.46
FITF 4.22 0.09 17.08 1.67 101.11 54.01 221.07 128.39 343.48 184.16
Total 5.52 0.45 35.44 9.66 120.11 63.22 297.03 147.29 458.10 220.62
S : Sanctions, D: Disbursements
62
Table 3.4: Progress of the Micro-Finance Programme(As on 31 March 2011)
(` crore)
Sl. Particulars Self Help Groups Micro Finance Institutions (MFI)*No.
2010 2011 2010 2,011 #
Number Amt Number Amt Number Amt Number Amt
1 Loans disbursed 1586822 14453.30 1196134 14547.73 779 10728.49 469 8448.96during the year (267403) (2198.00) (240888) (2480.37) (88) (2665.75) (2) (843.77)
2 Loans 4851356 28038.28 4786763 31221.16 1659 13955.74 2315 13730.62Outstanding (1245394) (6251.08) (1285714) (7829.38) (146) (3808.20) (139) (3041.76)
3 Savings Accounts 6953250 6198.71 7461946 7016.30 – – – –with Banks (1693910) (1292.62) (2022649) (1817.12)
Figures in parentheses indicate the share of SHG covered under SGSY*: Actual Number of MFI provided with bank loans would be lower, as several MFIavailed loans from more than one bank#: Figures in parentheses indicate the assistance of SIDBI to MFI
F. Centre of Excellence for RuralFinancial Institutions
3.58 A meeting was held on 16th February, 2012 in
Head Office between Shri Nandan Nilenkani,
Chairman, UIDAI (Unique Identification Authority of
India) and Dr. Prakash Bakshi, Chairman, NABARD to
discuss the ways in which these institutions can
collaborate to increase the outreach of financial
inclusion. It was desired therein that NABARD, as a
key player in the field of financial inclusion, earmark a
core team of its officers for furthering the outreach and
acceptance of Aadhar Payments Bridge (APB) and
AEPS (Aadhaar Enabled Payments System) which
promise to bring the much required transparency,
speed and ease of operations into last mile banking.
Accordingly, NABARD, has set up CERFI (Centre of
Excellence for Rural Financial Institutions) with its
basic responsibilities being propagation of APB and
AEPS among rural financial institutions for all kinds of
cashless transactions and new KCC operations. It will
also document and disseminate the benefits,
procedure, financial implications and time frame for
adoption of AEPS by rural financial institutions. RRBs
will be targeted in the first phase while CCBs with
CBS platform will be covered in the second. An MOU
is being signed among NABARD, UIDAI and NPCI to
provide a formal outline to this collaborative effort.
Micro Finance3.59 The NABARD SHG-Bank linkage programme,
has proved to be a decentralised cost-effective and
the fastest growing microfinance initiative in the world.
As on 31 March 2011, there were more than 74.62
lakh savings-linked Self Help Groups (SHG) and more
than 47.87 lakh credit-linked SHGs covering 9.7 crore
poor households under the micro-finance programme.
The progress of the micro-finance programme is given
in Table 3.4.
A. Micro-Finance Development andEquity Fund
3.60 The Micro-finance Development and Equity
Fund (MFDEF) is being utilised for promotion of
various micro-finance activities such as formation and
linkage of SHGs through SHPIs, training and capacity
building of stake holders, capital and soft loan
assistance to MFIs, livelihood propagation, studies,
documentation, etc. During 2011-12, `33.31 crore was
released of which `28.68 crore was grant support for
promotional activities and `4.63 crore for CS/RFA to
MFIs, as against `29.95 crore and `17.43 crore,
respectively, in the previous year.
B. Support to Partner Agencies
3.61 NABARD continued to extend grant support
to NGOs, RRBs, DCCBs and Individual Rural
63
Volunteers (IRV) for promoting and nurturing quality
SHG. New SHPI were identified even while continuing
support to the existing ones. During the year, grant
assistance of `37.94 crore was sanctioned to various
agencies for promoting and credit linking 94,482
groups, taking the cumulative assistance sanctioned to
`184.17 crore to 6.76 lakh groups (Table 3.5). As on
31 March 2012, an amount of `55.28 crore was
released resulting in formation of 4.17 lakh SHGs. The
number of SHGs credit linked till March 2012 was
2.66 lakh.
C. Training and Capacity Building ofStakeholders
3.62 NABARD is continuously imparting training to
various partners and stakeholders of SHG-Bank
Linkage Programme such as bankers, NGOs,
government officials, SHG members and trainers.
During 2011-12, NABARD has trained 1.77 lakh
officials of various agencies and cumulatively 28.38
lakh officials have been trained. NABARD in
association with GIZ has initiated the process of
revising the content, coverage of training modules.
Training needs of all the stakeholders are being
assessed for the purpose.
D. Special Initiatives in BackwardRegion
(i) Rajiv Gandhi Mahila Vikas Pariyojana
3.63 NABARD continued to support the Rajiv
Gandhi Mahila Vikas Pariyojana (RGMVP), a special
initiative of the Rajiv Gandhi Charitable Trust (RGCT),
for promoting, credit linking and federating of SHG in
select districts of UP, in association with participating
banks and implementing NGO. As on 31 March 2012,
36,128 SHG were promoted, of which 22,614 were
credit linked. In addition, 1,238 Cluster Level
Federations and 45 Block Level Federations were
formed.
(ii) Priyadarshini Project
3.64 The “Women Empowerment and Livelihood
Programme in Mid Gangetic Plains” also called
Priyadarshini Programme envisages holistic
empowerment of 1,08,000 poor women and
adolescent girls through formation of 7,200 SHGs. The
programme originally being implemented in six
districts including four districts in UP (Bahraich,
Raebareili, Shravasti and Sultanpur) and two districts
in Bihar (Madhubani and Sitamarhi), now covers
seven districts consequent to the bifurcation of
Sultanpur district (UP) into Sultanpur and CSM Nagar.
The eight year long Programme assisted by
International Fund for Agriculture Development (IFAD)
and GoI to the extent of US $ 30 million and US $
2.73 million, respectively, has a total outlay of US $
32.73 million. NABARD is the Lead Programme
Agency for implementing the programme.
3.65 NABARD has engaged the Resource NGO for
the purpose of capacity building of the Programme
Staff and Field NGOs for the implementation of the
programme at the grass root level. During the year, the
Field NGOs have set up 39 Community Service
Centres (12 in Bihar and 27 in Uttar Pradesh for the
Table 3.5: Grant Assistance Extended to various Partners in SHG-Bank Linkage Programme(As on 31 March 2012)
(` lakh)
Agency Sanctions during 2011-12 Cumulative Sanctions Cumulative Progress
No. Amt. No.of No. Amt. No.of Amt. SHG s SHG sSHGs SHGs released formed linked
DCCB 7 118.50 4740 115 857.81 71695 289.19 47515 31744RRB 3 96.75 3810 123 542.19 53145 197.10 56070 36852NGO 166 3573.75 85571 3013 16200.59 499909 4882.31 283007 181196FC 4 0.73 61 811 83.16 7689 73.81 17356 9694IRV 1 5.20 300 72 733.58 43223 86.03 13105 6860
Total 181 3794.93 94482 4134 18417.33 675661 5528.44 417053 266346
64
purpose of social mobilisation and formation of
SHGs). The Field NGOs have formed total 3,410
SHGs during 2011-12, including 1,659 SHGs in Uttar
Pradesh and 1,751 SHGs in Bihar. For the purpose of
capacity building of Programme Staff, the Resource
NGO, SERP has conducted six Orientation Training
Programmes.
E. Scaling -up of Micro-FinanceProgramme: Special Initiatives
(i) Financing of Joint Liability Groups
3.66 An amount of `36.68 crore was sanctioned as
grant for promotion of 1.94 lakh JLGs across the
country till 31 March 2012. During the year, banks
disbursed a loan of `946.81 crore to 1,29,646 JLGs
upto 31 March 2012 taking the cumulative loan
disbursed to `2,092.10 crore for 2,70,691 JLGs. The
success story of JLGs formed by sex worker in
Munger district of Bihar with support from NABARD is
given in Box 3.6.
(ii) Micro-Enterprise Development Programme
3.67 NABARD had launched the Micro-Enterprise
Development Programme (MEDP) during 2005-06 for
skill upgradation and development of sustainable
livelihoods/venturing into micro-enterprises by
members of matured SHG. During the year, 1,914
MEDPs were conducted for 56,292 members on
various location-specific farm, non-farm and service
sector activities. Cumulatively, 6,363 MEDPs had been
conducted for 1,64,948 participants.
F. Pilot Projects SHG - Post OfficeLinkage Programme
3.68 The project was launched in 2006 in five
districts of Tamil Nadu (i) to examine the feasibility of
utilising vast network of Post offices in rural areas in
The dark realities of flesh trade and the unfortunate lives of
the sex workers who live an economically and socially
excluded and deprived life was no different in case of
Munger district of Bihar. Due to lack of awareness on
alternative options and resources available, most of these
sex workers find it difficult to come out of this profession.
But there was a ray of hope for some of them in Munger
district of Bihar when NABARD sanctioned a project to
Bihar Kshetriya Gramin Bank (BKGB), Munger for
promotion of JLG in eight districts including Munger.
Consequently, an NGO “Panaah Ashram”, which was
working in the field of education for the children of sex
workers of Munger, got in touch with Munger branch of
BKGB and two JLGs were formed among the sex workers.
These groups were sanctioned `80,000/- each for
undertaking livelihood activities. Now, one group named as
“Ekta JLG 1” is engaged in tailoring activity and the other,
named, “Ekta JLG 2” has opened a shop for selling
bangles. Now each member of the JLG is earning on an
average of `2,500 – `3,500 per month and also their
incomes increase substantially during marriage and festive
seasons.
Gulabi, one of the JLG members, says that she did not
believe earlier that any formal institution from the
Government sector would ever come to their world and
help them. But she was amazed when bank offered them
loans for economic activities. Julee – another JLG member-
says that earlier they had to borrow from money lenders in
case of emergencies but the rate of interest was very high -
from 76 per cent to 120 per cent per annum. Now with
the bank loan available to them @11 per cent p.a. they do
not have to go to such money lenders who happened to
exploit them otherwise too. Geeta – another member of
JLG, who also teaches in the school being run for the
children of “Red Light” area, says that the social and
psychological emancipation is even greater than the
economic benefits of the alternate professions.
These JLG members have now started living a life of dignity
and self respect. Moreover, it augurs well for their next
generation too who are happily taking their baby steps
towards the mainstreamed developmental process. Efforts
are being made to cover more such women under the JLG
in the district.
Box 3.6: From “Red Light to a “Ray of light” through JLG in Munger, Bihar
65
disbursement of credit to rural poor and (ii) to test the
efficacy of Department of Posts (DoP) in providing
micro finance services to the rural clients. NABARD
sanctioned RFA to the tune of `300.00 lakh for on-
lending to SHGs on an interest sharing basis. As
against the RFA released, `37.12 lakh was outstanding
at DoP level as on 31 March 2012. A total of 2,189
SHGs have opened saving accounts, of which 1,259
SHGs have been credit linked by various Post Offices,
with cumulative loan disbursed amounting to `3.65
crore as on 31 March 2012. The project was closed on
31 March 2012. The project is also being implemented
in Meghalaya with `5.00 lakh sanctioned to Indian
Post for on-lending to SHGs in East Khasi Hills district.
G. Other Developments
(i) NABARD Financial Services Ltd.
3.69 The Karnataka Agriculture Development
Finance Company Ltd. (KADFC) was restructured into
an MFI, viz., NABARD Financial Services Ltd.,
(NABFINS), during 2007, to promote the micro-
finance Sector. NABARD is the major stakeholder,
other share holders being, Government of Karnataka,
Canara Bank, Union Bank of India, Federal Bank and
Dhanalakshmi Bank. The paid up Share Capital as on
31 March 2012 was `42.08 crore. During 2011-12,
NABFINS disbursed loans to the extent of `213.58
crore to 6,915 SHGs through 67 Business
Correspondents (BC) taking the cumulative
disbursement to `265.54 crore, to 8,968 groups.
Loans to agencies other than SHGs to the extent of
`2.30 crore were disbursed during the year taking the
cumulative other loans disbursed to `5.25 crore.
During the year, rate of interest on loans to SHGs was
revised upwards from 12.0 per cent to 13.5 per cent
per annum on reducing balance. NABFINS follows a
client friendly model, with credit disbursements made
and repayment collected at the door step of the
clients. During the year, it opened 17 district offices
and appointed 36 BCs taking the number of total
offices to 31 and BCs to 67, respectively. NABFINS
availed refinance of `200 crore from NABARD during
the year.
(ii) Centre for Micro-finance Research
3.70 The Centre for Micro-finance Research (CMR)
established by NABARD in BIRD in 2008 and four
sub-centres in Guwahati, Patna, Chennai & Jaipur
continued to conduct research on various themes of
micro-finance across the country, for bringing out
policy initiatives that would improve the design and
delivery of various micro-finance products. The CMR
brought out two issues of its half-yearly journal “The
Micro-finance Review” during the year. Grant
assistance of `199.33 lakh was released by NABARD
during the year to CMR, taking the cumulative
assistance to `560.01 lakh. The sub-centres of CMR
in Guwahati, Patna, Chennai and Jaipur undertook
research on 41 prioritised themes, of which 20
research studies were completed and 14 reports
published/uploaded on BIRD’s website for the benefit
of all stakeholders.
H. New Developments / Initiatives
a. Re-launching SHG Bank LinkageProgramme: SHG-2 Background
3.71 Over the years, the SHG-Bank Linkage
Programme (BLP) has emerged as a viable model for
financial inclusion of hitherto unreached poor
households particularly in rural areas. The Programme
has brought in a lot of encouraging and positive
features like increase in loan volume to SHGs, definite
shift in the loan utilisation pattern of SHG members,
gradual increase in income level of SHG members,
sound recovery performance of SHG loans, significant
reduction in the transaction costs for the banks and
the borrowers, etc. However, skewed growth of SHGs
in certain regions of the country had narrowed the
growth process of the programme. In this background,
it was decided to revisit the SHG-BLP for identifying
the shortcomings and incorporate suitable changes to
give the programme a renewed thrust and direction.
The purpose and intent of re-launching the
programme named, SHG-2, was to focus on a few
issues like creating space for voluntary savings,
positioning cash credit as preferred mode of lending,
66
scope for providing multiple borrowings by SHG
members matching with their repaying capacity,
creating avenues to meet higher credit requirements
for livelihood creation, supporting SHG Federations as
non-financial intermediaries, rating and introducing
audit of SHGs as part of risk mitigation system,
strengthening monitoring mechanisms, etc. A National
Colloquium of bankers, senior Government officials,
NGOs and thought leaders of micro finance was held
at Mumbai on 21 February 2012 to discuss the scope
and content of SHG-2. The guidelines of SHG-2 have
since been issued by NABARD to the concerned
stakeholders.
b. Scheme for Promotion of WomenSHGs in backward districts of IndiaAnd Left Wing Extremism (LWE)Affected districts of India
3.72 A scheme in association with GoI has been
formulated to bring out a viable and self sustainable
model for promotion and financing of Women Self
Help Groups by involving an anchor NGO in each of
the selected backward districts of the country. This
project is an attempt at having NGO-SHPI to work not
merely as an SHPI for promoting and enabling credit
linkage of these groups with banks, but also serving as
a banking / business facilitator, tracking, monitoring
these groups and also being responsible for loan
repayments. To begin with, the scheme is being
implemented in 109 selected backward/LWE districts
of the country. Some of the salient features of the
scheme are given in Box 3.7.
c. Cash credit limit to SHGs
3.73 The GoI communicated its decision of only
sanctioning Cash Credit Limits to SHGs from 17
November 2011 so as to address the issue of delayed /
limited or non-approval of repeat loans to SHG, to
ensure cost effectiveness to clients and provide greater
operational flexibility to SHG clients. The groups in
turn, are to extend loans to their members as per the
extant guidelines of RBI and NABARD. The SHGs are
to ensure payments of interest on monthly basis on
the cash credit availed by them. Earlier, the SHGs
were being sanctioned term loans by banks depending
on the quantum of savings made by the group. The
tenure of such loans was upto a period of three years.
However, often, the groups tended to prepay such
loans leading to a situation where the groups were not
sanctioned fresh loans/repeat loans. Therefore, even
for their emergent needs these SHGs were depending
i. The LDM in consultation with the DDM, NABARD and
due approval of DLCC in each of the district can identify
more than one NGO/support agency, with clear
geographical demarcation of areas for implementation of
the scheme.
ii. The scheme would be implemented primarily through two
nodal bank branches, having CBS facility, in each block
of the identified districts.
iii. The concerned bank branch will enter into a MoU with
the identified NGO.
iv. The identified NGOs will be eligible for grant assistance of
`10,000 per SHG from WSHG Fund.
v. All loans to new SHGs promoted will preferably be under
the cash credit mode.
vi. DDM, NABARD will arrange need based awareness and
capacity development programmes for key stakeholders
under the project.
vii. A Service Charge of 5% per annum on monthly average
loan outstanding shall be paid by the bank to the
respective NGOs to meet the administrative, transaction
and risk cost of the NGOs.
Box 3.7: Salient features of Scheme for Promotion of Women SHGs in backward districts of India and
Left Wing Extremism Affected districts of India
67
on various alternate options like MFIs, etc. The
introduction of cash credit is thus aimed at
smoothening the consumption & working capital needs
of the SHGs during the initial years as well as to a
certain extent, in subsequent years. This will offer the
following benefits :
• The system will provide considerable flexibility to
the SHGs for meeting their emergency needs
• The SHGs will be able to reduce their cost of
borrowing.
• The banker will be freed from frequent
documentation and dealing with high number of
transactions as the loan limit will be sanctioned
over a period of three to five years based on the
projected savings of the group.
• The SHGs will be encouraged to save regularly as
their drawable limit will be enhanced every year
based on their actual saving.
• The cash credit system will lead to frequent
circulation of loan amount among the members
thereby satiating their frequent credit needs.
d. Women Self Help Group (WSHG)Fund
3.74 The Union Finance Minister announced in his
Budget Speech 2011-12, a “Women SHGs
Development Fund” with a corpus of `500 crore has
been created to empower women by promoting their
Self Help Groups. This Fund will also support the
objectives of Aajeevika i.e. the National Rural
Livelihood Mission. It will empower women SHGs to
access bank credit.
3.75 NABARD Consultancy Services (NABCONS)
is a wholly owned company promoted by NABARD.
NABCONS operates from its offices located in all
Regional Offices of NABARD towards a vision of being
a trusted business advisor in the field of agriculture
and rural development. NABCONS provides
professional consultancy services in agriculture, allied
sectors and rural development to Government of
India, State Governments, Banks/ Financial
Institutions, Co-operative Institutions, Corporates,
NGOs, International organisations and other clients.
A. Financial Achievements
3.76 During the year, NABCONS contracted 88
assignments for a contract value of `26.87 crore. The
company executed 125 assignments including 6
international visitor’s programmes. NABCONS earned
`17.30 crore as professional fees on assignments
executed, `0.43 crore as commission from mutual fund
distribution and `2.62 crore as interest on investments
aggregating a total income of `20.35 crore. Further,
NABCONS is also in advanced stages of submitting
bids for several prestigious assignments.
B. Business Process Re-engineering
3.77 NABCONS has set for itself an ambitious
business target of contracting assignments of `100
crore during the financial year 2012-13. With a view
to achieve this target, NABCONS has embarked upon
an exercise of re-engineering its business processes by
establishing verticals for its key business activities such
as Infrastructure and Engineering, Food and Agro-
processing, Monitoring & Evaluation, Agriculture and
Rural Development, International Business and
Administration, etc. The re-engineering process
coupled with engagement of specialists is expected to
diversify the business portfolio. NABCONS has also
made a beginning in IT related assignments with the
prestigious Bihar Ground Water Irrigation Scheme
(BIGWIS) assignment for Government of Bihar.
C. India Africa Institute of Agricultureand Rural Development
3.78 The Ministry of External Affairs, Government
of India has selected NABCONS for establishing the
India Africa Institute of Agriculture and Rural
NABARD Consultancy Services
68
Development in a country to be selected in
consultation with the African Union. This initiative is a
follow up of the announcement made by the Hon’ble
Prime Minister during the Africa India Forum Summit
held in Addis Ababa in May 2011. The Institute will
cater to the training needs of Bankers, Government
Officials, Rural Financial Institutions, MFIs, NGOs and
other stakeholders in agriculture and rural
development. NABCONS is expected to establish the
Institute and manage it for 3 years before handing it
over to the host country.
D. North East Region, Jammu &Kashmir
3.79 NABCONS is engaged in third party
monitoring of infrastructure development under
Special Programme Assistance (SPA) in the states of
Arunachal Pradesh, Nagaland, Sikkim and Jammu and
Kashmir. During the year 2011-12, NABCONS earned
an income of `464.61 lakh in NER and `118.81 lakh
in J & K from such assignments by ensuring effective
utilisation of investment worth `23,230 lakh in NER
and `5,940 lakh in J & K.
Research and Development Activities
3.82 The Research and Development (R&D) Fund
was set up in NABARD in 1982-83 as mandated by
NABARD Act 1981. The Fund provides financial
support to select agencies for promoting applied
research projects/studies, training and upgrading skills
of personnel of client institutions and disseminating
research findings. The corpus of the Fund has been
pegged at `50 crore since 2004-05, with the
expenditure incurred being replenished through
appropriation of profits during the year.
A. Utilisation of the Fund
3.83 During the year, `17.67 crore was utilised
from the fund for supporting activities like research
projects/studies (`0.70 crore), seminars (`0.85 crore),
training/summer placement (`15.57 crore), NABARD
Chair Professor Scheme (`0.48 crore) and other
activities (`0.07 crore). Cumulative disbursement stood
at `153.86 crore as on 31 March 2012.
B. Sanctions under the Fund
i. Research Projects/Studies
3.84 During 2011-12, five research projects
involving a grant assistance of `0.49 crore were
sanctioned. Further, seven projects/studies sanctioned
earlier were completed during the year. A brief
summary of findings of these completed studies is
given below.
3.85 An Economic Analysis of Yield Gaps in
Principal Crops in Various Regions of India conducted
E. Business Highlights
3.80 During the year, NABCONS established
business relationship with several new clients such as
Small Farmers Agri-Business Consortium (SFAC) in
diverse areas. A major private sector bank has
approached NABCONS to equip them for enhancing
credit flow to agriculture. Under the Border Area
Development Programme (BADP), new States such as
Sikkim, Uttar Pradesh and Rajasthan have been added
for monitoring of various infrastructure projects.
F. Comparative Position of Incomeearned from Consultancy
3.81 A comparison of income earned from
consultancy by Institutions such as IIMs, AFC is given
in table 3.6.
Table 3.6: Comparative Position of Income earnedfrom Consultancy
(` lakh)
Sr. No. Institute 2009-10 2010-11
1 IIM Indore 278.85 679.842 IIM Ahmedabad 2024.92 NA3 AFC 3042.84 4977.954 NABCONS 997.35 1481.03
69
by Centre for Development Research, New Delhi
reported that among Cereals, the yield gaps were
highest for Jowar (212.04%) and lowest for Wheat
(28.22%). Amongst Pulses, it was highest for Green
Gram (225.41%) and lowest for Bengal Gram
(115.39%). For Sugarcane, the yield gap was 31.66%.
Amongst Fibre crops, it was very high for Cotton
(495.46%) and very low for Jute (20.88%). Amongst
Oilseeds, it was highest for Sunflower (180.84%) and
lowest for Rapeseed & Mustard (24.41%). Amongst
Vegetables the yield gap was highest for Onion
(172.92%) and lowest for Potato (57.56%).
Underdeveloped blocks showed higher yield gaps for
all crops compared to developed blocks and, the crop
yield gaps of marginal and small farmers were found
to be higher than medium and large farmers. Credit
had a positive and significant relationship, via fertiliser
route, with yield of most crops. Paddy and Wheat
responded well to credit. Positive correlation between
credit taken and crop productivity was observed at
farm level in all four states surveyed. Farmers
reported non-availability of institutional credit as a
major constraint to crop yield improvement on their
farms. Several constraints for bridging the yield gaps
such as water shortage, shortage of skilled labour, lack
of power supply, etc., were identified by the study.
3.86 Study on Impact Assessment of Micro-credit in
Alleviating the Poverty of Rural Poor in Keonjhar
District of Odisha, studied 236 credit linked SHGs and
their members numbering 2,753. The motivating
factor of people in forming into SHGs is possibility of
additional employment and income. Most of the SHG
members, averaging to 12 per group, belonged to
lower socio-economic groups. Dependency on
moneylenders declined considerably after the spread
of SHGs in the district. The rate of savings per month
per member was `60 per month, collected in 4
instalments. Loan to savings ratio was 4.41:1
Majority of the SHGs were charging `24 to `36 per
annum as interest for a loan of `100 while the
transaction cost worked out to 10 to 15 per cent.
Uniform interest rate is charged on bank loans as well
as internal funds. Performance of SHGs receiving
repeat doses of credit were better as compared to
others. Around 56 percent of SHG members had taken
up micro entrepreneurial activity, in farm and non-
farm sectors, as a result of their association with
SHGs. Hence, the household income as well as
expenditure of the members increased significantly.
The study recommended extended promotional
support for refresher training, exposure visits,
experience sharing meetings for SHGs; standardisation
of dispensing credit with promotional activities by
different agencies; formation of District Level
Monitoring Committee on SHGs to monitor, supervise
and provide guidance to the self help movement in
the district; training with modules suiting local
conditions; and, greater role for SHPIs.
3.87 An inquiry into the Nature and Extent,
Problems and Prospects of Floriculture – An integrated
Study of Flower Production in the State of West
Bengal by Kolkata Girl’s College revealed that the cost
structure not only varied across flowers but also varied
across districts for the same flowers. Labour cost is a
major item in general, though for gladiolus, it is land
preparation. Packaging methods are very primitive and
sample producers are neither trained nor have the
resources to undertake smart formal packaging. The
study did not find any definite pattern in prices over
time though they reflected the importance of relative
elasticities of demand and supply. Farmers have
diverted land from paddy to flowers due to higher
returns. Major constraints to flower production in the
state have been institutional factors, natural factors
and infrastructure related factors. The study stresses
the need to train farmers, provide finance, develop
and modernise the marketing channels.
3.88 An action research for organising small
producers into community owned, paced association
taken up in Rayagada, a tribal Odisha district, funded
by NABARD brought out a manual that can guide
replication of such experiments elsewhere. The action
research brought out clearly that sustainability of the
community wrests on: (a) the sustainability of the
70
weakest in the system, (b) developing the trust and co-
operation among the members within the community,
(c) developing competence of local facilitators to
systematically and responsibly operate the community
enterprise system (CES) known as Nava Jyothi CES.
The core design variables, thus, include size, scope,
technology, ownership, and management. These
variables needs to be simultaneously optimised based
on the community context such as social, cultural,
geography, micro-climatic conditions, basic
infrastructure, etc., of the community. Hence,
sustainability of the producer-family is the prime
concern and not the enterprise per se. Sustaining and
improving the quality of life of family of the small and
marginal farmer/producer is the main purpose of the
proposed system. The key functions of the CES
included (a) marketing of surplus produce for better
net price realisation for the producers/farmers, (b)
provide emergency and production credit to the
producer/farmer members and subsequently facilitate
consumption demand by partially supporting the retail
outlets in the villages of the Nava Jyothi CES, (c)
encourage adoption of integrated natural farming
methods with minimum external inputs and with better
management of land, water and other natural
resources, (d) plan, budget, schedule and strategize the
activites of the producers/farmers at the village level to
be able to enhance the net income over 365 days of
the year, and (e) continuously engage with the
producer/farmers to build the faith and trust of the
people to cooperate with each other in the
community. Based on the experience with Nava Jyoti
CES developed under the project, the manual
delineates 15 steps starting from identification of the
community to withdrawal of the institutional
champions / external agencies. The project concludes
that development of local human competences is a
critical step towards catalysing and sustaining
cooperative actions in the community enterprise
system.
3.89 A study on Impact of Economic Reforms on
Tribal Poverty, conducted by Indian Statistical Institute
(ISI), Kolkata focused on Adivasis, who live
precariously far below the poverty line and seldom get
academic attention. The study conducted in 2009
covered five districts from three eastern States of
Odisha, Jharkhand and West Bengal covering 1000
tribal households across 100 villages. The study
revealed that the tribal per capita income increased
three times over last 20 years against 6 fold increase
in the country as a whole. The growth got neutralised
by doubling of the Consumer Price Index (CPI) during
the same period. On an average, three fifth of the
sample households are living below poverty level in
the region. Degree of poverty is not uniform among
the tribes. Eleven tribal communities have been found
to have more than 80 per cent BPL households in
each. Forty to fifty per cent households have been
found in Jalpaiguri and Purulia to be the victims of
starvation some time during the year. Tribes like
Birhor, Oraon, Paharia, Mal and Sutar are the worst
victims of starvation. Firewood is the only source of
fuel in more than 90 per cent households of the entire
region often requiring family members, mostly women,
to travel more than 10 kms to collect it. MGNREGA
programme could hardly make any dent in the area.
PDS at subsidized prices has better record for the poor
in general than the tribal poor in particular. Hence,
Successful functioning of PDS holds the key in
improving the plight of the tribal poverty. The study
harps on the need for massive reforestation
programmes, control of over hacking and graszing and
provision of cheap fuel through alternatives such as
solar power or biogas.
3.90 A study titled, ‘A Commons Story In The Rain
Shadow Of Green Revolution’ done by Foundation for
Ecological Security (FES), Anand, Gujarat, probed into
whether commons survive under the changing
production environment and also whether livestock
and agricultural production systems would remain
viable if support provided by them to commons would
cease. The study argues that the subsidy derived from
the Commons forms a critical contribution to both
livestock and agricultural production systems. In an
71
essentially unpredictable environment, the Commons-
livestock agricultural complex provides stability and
control to households over their lives as 20-40% of
household incomes are derived from the Commons.
Community institutions help the poor in ensuring their
rights on commons. Commons as well as the
institutional mechanisms that enable them to function
sustainably declined due to encroachments as a result
of usurpation by the elite, state policy and
privatisation by local landlords, real estate developers
and mining interests. The study stresses on need to
strengthen symbiotic relationships between Commons,
livestock and agriculture in the rainfed areas of India
and delineated essential steps to revive Commons,
viz.,: 1. Formulating policy on Commons and securing
rights of communities on Commons, 2. Increasing
public investments for revitalising common land and
water resources, 3. Strengthening institutional
arrangements for better governance of natural
resources, and, 4. Influencing the ‘common’ mindset
on the Commons:
ii. Seminars, Conferences and Workshops
3.91 During the year, grant assistance of `1.14
crore was sanctioned to various universities, research
institutes and other agencies for organising 139
seminars, conferences, symposia and workshops
covering subjects/areas related to agriculture and rural
development including Green Revolution-II, Agri-
Marketing, Micro Finance, Financial Inclusion,
Sustainable Livestock and Poultry Development, Plant
Bio Technology, Conservation of Animal Genetic
Resources Water Security and Climate Change, Food
Security, Organic Farming, Economic Reforms and
Agriculture, Advances in Aqua Culture, Regional
Imbalance – Inclusive Growth, SHG and Women
Entrepreneurship and Coffee Research, etc. The grant
support extended to the organisers enabled them to
document the proceedings and publish background
papers, thus facilitating wider dissemination of the
recommendations/action points and initiate suitable
policy interventions by agencies concerned.
iii. NABARD Chair Professor Scheme
3.92 Following the approval from the Board of
Directors, NABARD revived its Chair Unit Scheme
during the year 2010-11 and three professors
commenced their tenure of three years with effect from
01 January 2011. During the current year, one more
professor, Dr.Anil Sharma, was inducted with affiliation
to NCAER, New Delhi, for a period of three years with
effect from 1 Aug 2011.
iv. Training Activities
3.93 Apart from extending grant assistance for
various R&D activities, an amount of `0.02 crore was
utilised from the Fund during the year for capacity
building of the staff of RFIs.
v. Summer Placement Scheme
3.94 The Summer Placement Scheme is being
implemented since 2005-06 to enable students
selected from reputed agriculture and management
institutes, to be associated with various projects/studies
taken up by NABARD in agriculture and rural sectors.
The students are assigned tasks/projects of relevance
to NABARD for generating new ideas, products and
services. During 2011-12, 94 students were assigned
such projects by 19 ROs, TEs and HOs and all the 94
students have submitted project reports. An
expenditure of `0.25 crore was incurred under this
Scheme, during the year.
C. Training of Personnel of RFI
3.95 RTC, Mangalore and RTC, Bolpur were
renamed as BIRD, Mangalore and BIRD, Bolpur
respectively. BIRD - Lucknow , BIRD - Mangalore and
BIRD- Bolpur conducted 574 training programmes
and trained 13, 581 participants (Table 3.7).
D. Other Developments
a. BIRD, Lucknow:
3.96 An innovative programme for “Developing a
cadre of professionals to work in rural areas” was
72
designed by BIRD, Lucknow during the year to
develop capacity of rural youth to implement various
development projects of NABARD, Government and
other agencies in rural areas. With a view to sensitize
the senior bankers and government officials about the
developmental initiatives of NABARD and the need for
further interventions for enhancing credit support in
the project areas, two exposure visits to NABARD
assisted watershed and tribal development (wadi)
projects and a producer company were organised. A
programme was organised by BIRD in collaboration
with HASAL Institute of Micro finance Studies
Academy Limited, Nigeria for 15 Micro finance
practitioners, consisting of CEOs and Heads of
Departments, officials from Central Bank of Nigeria,
Group Heads etc. of different micro finance banks of
Nigeria. Ten participants from the Bank of Bhutan Ltd.
attended a training programme on ‘Appraisal of
Agriculture Projects’. Trainers Training Programme on
‘Promotion and Financing of SHGs & JLGs’ was
conducted for participants from 4 countries, in
collaboration with Centre for International
Cooperation and Training in Agriculture Banking
(CICTAB) Pune. Eleven studies were conducted during
the year which included, inter-alia, ‘Case study on
Nalgonda DCCB and Thrissur DCCB’, ‘Agriculture
Growth – story of Gujarat and Chhatisgarh’, NIDA,
Producer’s Groups, Direct Lending to RFIs, NRLM,
Back Ended Subsidy System – Advantages and
Disadvantages – Alternate Model etc..A National
Seminar on “Micro finance in India- Issues and
Challenges” was organised by BIRD, Lucknow.
Shri Y C Nanda, Ex- Chairman, NABARD inaugurated
the seminar and delivered the key note address and
158 delegates who included delegates from wide
spectrum of policy makers, academicians and experts
from MFI sector participated in the seminar. In order
to build a competent cadre of professionals in the field
of rural banking, BIRD started a Post Graduate
Diploma in Rural Banking (PGDRB). The second
batch of the Course has commenced in July 2011,
with the programme being affiliated to IGNOU.
b. BIRD, Mangalore
3.97 The institute conducted 113 programmes
covering 2842 participants with 10434 trainee days
during the year 2011-12. Of these 36 Orientation
Programmes covering 844 participants were conducted
under Vaidyanathan Committee Package for senior
officers and branch managers of SCBs and DCCBs in
select five states. Two exposure visits of one week
each on micro finance sector to SANASA
Development Bank, Sri Lanka were conducted. The
Institute conducted an Exposure Visit on ‘Agro-
processing and dairy farming for 11 Officers of
SANASA Development Bank (SDB) and Sanasa
Insurance Ltd. Colombo, Sri Lanka. Programmes on
different topics, viz., KYC, AML, RTI Act’, micro
Finance, ‘Business Development & Profit Planning’,
‘Credit Appraisal of Farm & Non-Farm Sector’,
‘Financing MSMEs’, ‘REDP and Skill Development’,
‘Negotiation Skills for NPA Management’ ‘Investment
Portfolio Management for CCBs, ‘ALM and Investment
Management’, ‘Government Sponsored Programmes’,
‘Management Development Programme’, ‘Legal
Aspects of Banking’ and ‘Health Management’ were
conducted as per the needs and requirements of the
client institutions.
c. BIRD, Bolpur
3.98 The Institute conducted 117 programmes
covering 2,599 participants during the year 2011-12.
Of these, 26 Orientation Training Programmes (OTPs)
for Branch Managers and senior officers of SCBs/
DCCBs were conducted. As a part of collaborative
Table 3.7: Training of RFI Personnel
Institute Programmes PersonnelConducted Trained (Nos.)
2009-10 2010-11 2011-12 2009-10 2010-11 2011-12
BIRD,Lucknow 261 377 344 6139 9645 8140
BIRD,Mangalore 93 106 113 2474 2649 2842
BIRD,Bolpur 113 93 117 2894 2373 2599
Total 467 576 574 11507 14667 13581
73
effort, training programmes were conducted jointly
with BIRD, Lucknow and ACMART, Kolkata. Further,
training infrastructure of Agriculture Cooperative Staff
Training Institute (ACSTI) of Odisha State Cooperative
Bank and Kalna Chamber of Commerce, Kalna (West
Bengal) were utilised for conducting training
programmes. In a collaborative arrangement with
Agriculture Institute of Viswa Bharati University,
Santiniketan, Agriculture Scientists/Professors from the
University regularly interacted with participants/
trainees of different training programmes on topics
relating to agriculture/allied activities of different
training programmes and latest technology adopted in
these sectors. BIRD, Bolpur also collaborated with
Women’s Study Centre of Visva Bharati University,
Santiniketan . Training Programmes for Federations of
FCs/SHGs for promotion of JLGs/TFGs and Producers’
Organisation, sponsored by West Bengal RO were
conducted. The Institute also conducted
Organisational Development Initiatives in Assam
Cooperative Apex Bank Ltd. and Langpi Dehangi
Rural Bank, Assam.
3.99 The Centre for Micro finance Research (CMR)
set up in BIRD in 2008 has been continuing its
research activities on various themes relating to the
micro finance sector to facilitate policy initiatives and
improve the design and delivery of various micro
finance products. The Centre has completed 20 studies
which are available on BIRD’s website
www.birdindia.org.in. The Centre has brought out two
issues of its half yearly journal ‘The Micro finance
Review’ during the year and has conducted a seminar
on ‘Micro-finance – Issues and Challenges’. The
cumulative grant assistance to the Centre by NABARD
aggregated `560.95 lakh as on the end of 2011-12.
APRACA Centre of Excellence (ACE) set up in CMR
conducted an exposure visit for a team from
Cambodia on ‘SHG – Bank Linkage Programme
(SBLP)’. Mr Won-Sik Noh, Secretary General,
APRACA visited BIRD and held discussions with the
Director and Joint Director on various issues of mutual
interest. Director BIRD participated in APRACA Fin-
power programme held in Bangkok and presented a
paper on ‘Rural Innovations’.
3.100 NABARD in collaboration with GIZ (earlier
GTZ) established the Centre for Professional
Excellence in Cooperatives (C-PEC) at BIRD, Lucknow
in 2008. During the year, C-PEC revised the
accreditation parameters for cooperative banks and
enrolled 57 co-operatives, institutions and 151 PACS
as members and accredited 35 Cooperative Training
Institutions. Further, Course designs, content and
syllabus for following four distance learning flagship
courses each of six month duration were finalised:
CTFC - “Certified Trainer for Financial Cooperatives”
CPS - “Certified PACS Secretary”
CPCB - “Certified Professional in Cooperative
Banking” (Level – I)
CPCB - “Certified Professional in Cooperative
Banking” (Level – II)
3.101 During the year, NABARD sanctioned grant
assistance of `7.92 lakh to the National Institute of
Rural Banking (NIRB), Bangalore for conducting 21
programmes. An amount of `4.76 lakh has been
released to NIRB, Bangalore for conducting 11 training
programmes under which 169 participants were
covered. Further, IIBM, Guwahati was granted
assistance of `9.63 lakh towards15 per cent share of
revenue expenditure for the year 2011-12 and `15.90
lakh contributed towards Infrastructure Development
Fund of IIBM, Guwahati.
3.102 NABARD has been extending funding support
under SOFTCOB to Junior Level Training Centres
(JLTCs) of SCARDBs, Agricultural Co-operative Staff
Training Institutes (ACSTIs) of SCBs and Integrated
Training Institutes (ITIs) out of the Co-operative
Development Fund (CDF). The scheme has been
revised and extended for a period of three years from
74
1 April 2010 to 31 March 2013. The ACSTIs, JLTCs
and ITIs will be eligible for additional assistance under
the revised scheme as support from NABARD for
linking their activities with C-PEC. During the year, the
bank provided technical and financial support to seven
JLTCs, twelve ACSTIs and three ITIs set up by
SCARDBs and SCBs, respectively, to enable them to
improve their training system. A total amount of
`564.13 lakh was disbursed to the JLTCs, ACSTIs and
ITIs out of the CDF for conducting 941 programmes
covering 21,468 participants during 2011-12 as
against `490.58 lakh disbursed for conducting 855
programmes covering 18,306 participants during
2010-11.
3.103 NABARD’s development initiatives have been
carved out under the overarching objective of
‘sustainable inclusive growth’ of India’s development
policy. To make a perceptible difference on ground,
addressing the concerns of the small operators and
excluded areas, deploying technology, finding space
for location/product specific viable delivery models
which can be upscaled, have been the principles
which have guided the development initiatives.
75
Capacity Building of Client Institutions
The Co-operative Banks and Regional Rural Banks
play a very crucial role in financial intermediation in
agriculture and rural development. NABARD
endeavours to strengthen the capacity of these
institutions through various developmental and
supervisory initiatives so as to enable them to
compete effectively with other financial institutions
and to purvey ground level credit flow efficiently.
Institutional Development
A. Rural Co-operative CreditInstitutions:
a. Performance
4.2 An analysis of the financial position of SCBs
(Table 4.1) indicated that their deposits as on
31 March 2011 decreased by 4.53 per cent; however
in the case of DCCBs, deposits by 8.4 per cent; the
borrowings of SCBs increased by 37.07 per cent and
that of DCCBs increased by 50.31 per cent. Loans
issued by SCBs increased by 32.07 per cent and that
of DCCBs by 35.02 per cent during the year 2010-11.
Loans outstanding of SCBs increased by 30.41 per cent
and that of DCCBs have marginally increased by 3.89
per cent during 2010-11 as compared to previous year.
4.3 In the case of Long Term co-operative credit
structure, during 2010-11, borrowings by State
Co-operative Agriculture and Rural Development
Banks (SCARDBs) marginally increased by 1.04 per
cent and that of Primary Co-operative Agriculture and
Rural Development Banks (PCARDBs) marginally
decreased by 1.13 per cent over the previous year.
The loans issued by SCARDBs and PCARDBs have
marginally decreased by 0.65 and 1.22 per cent
respectively. Loans outstanding of SCARDBs marginally
increased by 0.82 per cent and PCARDBS decreased
by 2.60 per cent over the previous year (Table 4.2).
b. Working Results
i. Profitability
4.4 During 2010-11, 29 out of 31 SCBs earned
profit aggregating `521 crore while the remaining 2
SCBs were in the loss (`317 crore), resulting in
aggregate profit of `204 crore. While 317 out of 370
DCCBs earned profit of `1457 crore, 53 DCCBs
IV
Table 4.1: Growth of Short-Term Co-operative Credit Structure(As on 31 March)
(` crore)
Particulars SCB DCCB
2010 2011* % Growth 2010 2011* % Growth over2010
Number 31 31 0 370 370 0
Share Capital 1636 2024 23.72 7235 7950 9.88
Reserves 10555 12048 14.14 22807 25040 9.79
Deposits 82937 79179 -4.53 153585 166489 8.40
Borrowings 23530 32252 37.07 28188 42370 50.31
Loans Issued 53621 70818 32.07 118393 159859 35.02
Loans Outstanding 49239 64213 30.41 126356 131280 3.89
* Data Provisional - The data for the year 2010-11 in respect of Assam and Bihar states is repeated from the previous year.
76
incurred loss to the extent of `443 crore resulting in
overall profit of `1,014 crore.
4.5 Five SCARDBs earned an aggregate profit of
`76 crore, while 14 SCARDBs incurred an aggregate
loss of `237 crore in 2010-11. Out of 696 PCARDBs,
329 earned an aggregate profit of `146 crore, while
367 incurred an aggregate loss of `358 crore during
the year, resulting in a loss of `212 crore. (Table 4.3)
4.6 The amount of accumulated losses of SCBs
and DCCBs have decreased and that of SCARDBs
and PCARDBs have shown increasing trend during
the year 2010-11 over the previous year (Table 4.4).
Table 4.2: Growth of Long-Term Co-operative Credit Structure(As on 31 March)
(` crore)
Particulars SCARDBs PCARDBs
2010 2011* %Growth over 2010 2010 2011* %Growth over 2010
Number 20 20 0 697 697 0Share Capital 821 833 1.46 1528 1520 0.52Reserves 3321 3578 7.74 3304 3312 0.24Deposits 759 822 8.30 449 431 (-)4.00Borrowings 15646 15809 1.04 12698 12555 (-)1.13Loans Issued 3210 3189 (-)0.65 2465 2434 (-)1.22Loans Outstanding 17002 17141 0.82 11666 11363 (-)2.60
* Data Provisional - The data for the year 2010-11 in respect of Assam, Bihar, Gujarat, Haryana, Kerala, Odisha, Puducherry, Punjab, Tamil Nadu,Tripura and West Bengal is repeated from the previous year. Manipur SCARDB is defunct.
Table 4.4: Accumulated Losses(As on 31 March)
(` crore)
Year SCBs DCCBs SCARDBs * PCARDBs*
2009 404 5204 1054 3631
2010 574 5302 1188 4087
2011 480 4188 1401 4299
* Data Provisional The STCCS data for the year 2010-11 in respect of Uttarakhand, Bihar and West Bengal states is repeated.* The LTCCS data for the year 2010-11 in respect of Haryana, Kerala, Odisha, Punjab, Tamil Nadu, Assam, Bihar, Puducherry and Tripura is repeated
from the previous year.
Table 4.3: Working Results of Co-operative Banks
(` crore)
Agency SCB DCCB SCARDB PCARDB
Year 2009-10 2010-11 * 2009-10 2010-11 * 2009-10 $ 2010-11 $* 2009-10 2010-11 *
Total (No.) 31 31 370 370 20 20 696 696In Profit (No.) 29 29 324 317 10 5 295 329Profit Amount 491 521 1691 1457 136 76 131 146In Loss (No.) 2 2 46 53 9 14 401 367Loss Amount 208 317 495 443 332 237 344 358
*: Data Provisional The STCCS data for the year 2010-11 in respect of Uttarakhand, Bihar, West Bengal, Arunachal Pradesh, Assam, Manipur, Mizoram,Tripura and Delhi is repeated.
*: The LTCCS data for the year 2010-11 in respect of Haryana, Kerala, Odisha, Punjab, Tamil Nadu, Assam, Bihar, Puducherry and Tripura is repeatedfrom the previous year. $: Manipur SCARDB is defunct.
77
Table 4.5: Region-wise Working Results of SCB(As on 31 March)
(` crore)
Region Profit/Loss Total NPAs NPA as % to loans Recovery (%)(+)/ (-) outstanding (As on 30 June)
2009-10 2010-11* 2009-10 2010-11* 2009-10 2010-11* 2009-10 2010-11*
Central 45.56 70.26 469.30 507.07 7.29 6.13 92.42 94.46
Northern 71.30 124.79 364.20 434.59 3.15 3.01 97.99 97.41
Eastern 71.94 72.66 387.20 418.08 7.11 6.83 91.64 92.39
Western 64.06 14.72 1928.82 2828.76 18.42 20.57 81.59 96.24
Southern (-)28.99 110.30 749.43 965.76 5.33 4.94 93.91 74.31
North-Eastern 59.48 62.31 453.29 565.03 36.05 41.10 45.47 44.23
All-India 283.35 203.13 4352.24 5719.29 8.84 9.01 91.83 91.75
* Data Provisional- The data for the year 2010-11 in respect of Uttarakhand, Bihar, West Bengal, Arunachal Pradesh, Assam, Manipur, Mizoram, Tripura andDelhi is repeated.
4.7 At the aggregate level, the non performing
assets (NPA) in absolute terms as well as the
percentage of NPAs to loans outstanding in respect of
SCBs have increased marginally due to a marginal fall
in the recovery performance (Table 4.5).
4.8 At the aggregate level, the percentage of gross
NPA to loan outstanding in respect of DCCBs
decreased from 12.96 on 31 March 2010 to 11.61
per cent as on 31 March 2011 (Table 4.6).
4.9 During 2010-11, profits of SCARDBs
increased in Northern region and that of SCARDBs in
Eastern region, remained unchanged while SCARDBs’
loss in NE region, Southern and Western region
remained unchanged (Table 4.7).
4.10 During 2010-11, information was available
from 696 PCARDBs and number of profit making
PCARDBs in all regions increased to 329 as on
31 March 2011 from 295 in the previous year. Their
total profits increased from `130.87 lakh in 2009-10 to
`159.92 lakh in 2010-11 (Table 4.8).
ii. Costs and Margins
4.11 During 2010-11, SCBs as a group earned
overall return of 6.9 per cent, while cost of funds
Table 4.6: Region-wise Working Results of DCCB(As on 31 March)
(` crore)
Region 2009-10 2010-11* NPA % to Recovery %DCCB Profit Loss DCCB Profit Loss Loans (As on 30
No. No. Amt. No. Amt. No. No. Amt. No. Amt. Total NPAs Outstanding June)
2010 2011 2010 2011 2010 2011
Central 104 95 314.28 9 37.65 104 89 310.17 15 166.02 3134.98 2891.56 24.72 19.7 67.98 70.06
Northern 73 65 113.01 8 35.81 73 55 125.28 18 25.48 1812.21 1448.63 3.85 6.19 79.57 83.26
Eastern 64 48 55.96 16 86.83 64 47 49.27 17 204.78 1278.87 1438.00 5.69 18.75 68.41 69.27
Western 49 42 593.38 7 321.87 49 48 547.01 1 13.66 5597.24 4868.21 17.68 13.20 71.80 73.31
Southern 80 74 614.59 6 12.65 80 78 425.05 2 32.65 4553.10 4600.54 11.63 9.46 82.43 86.54
All-India 370 324 1691.22 46 494.81 370 317 1456.78 53 442.59 16396.40 15246.94 12.96 11.61 75.74 78.80
* Data Provisional- The data for the year 2010-11 in respect of Uttarakhand, Bihar, West Bengal, Arunachal Pradesh, Assam, Manipur, Mizoram, Tripura andDelhi is repeated.
78
worked out to 5.01 per cent, resulting in financial
margin of 1.92 per cent (excluding miscellaneous
income of 0.49 per cent). The average transaction cost
and risk cost of SCBs during the year worked out to
1.37 per cent and 0.39 per cent respectively. SCB as a
group earned a positive net margin 0.71 per cent in
2010-11 compared to net margin of 1.06 per cent in
2009-10.
4.12 In the case of DCCB, the overall return on
working funds was 7.62 per cent, while the cost of
funds was 5.11 per cent, yielding a financial margin of
2.51 per cent (excluding miscellaneous income of 2.30
per cent). The average transaction cost and risk cost as
a percentage of working funds were 2.09 per cent and
1.37 per cent respectively, during 2010-11. The
DCCBs as a group, earned net margin of 1.41 per
cent during 2010-11.
iii. Non-Performing Assets and RecoveryPerformance
4.13 At the aggregate level, the percentage of gross
NPA to total loans and advances outstanding in
respect of SCBs slightly increased from 8.84 per cent
to 9.01 percent as on 31 March 2011, while that of
DCCBs improved from 12.96 per cent to 11.61
Table 4.7: Region-wise Working Results of SCARDB(As on 31 March)
(` crore)
Regions No. of Profit/Loss(-) Total NPAs NPA % Recovery %
Branches to demand
2010 2010 2011* 2010 2011* 2010 2011* 2010 2011*
Central 349 (-)52.91 (-)48.15 2265.76 2340.42 47.47 50.60 37.48 37.48
Eastern 138 7.07 7.07 368.93 313.99 69.77 67.64 36.47 36.47
North-Eastern 33 (-)3.94 (-)3.94 17.31 17.31 39.77 39.77 54.45 54.45
Northern 85 49.00 50.00 831.29 1306.71 18.42 17.16 58.00 58
Southern 56 (-)63.15 (-)63.15 722.95 725.79 20.23 20.39 57.94 56.85
Western 181 (-)132.08 (-)130.49 1441.66 1411.48 74.70 73.75 11.85 19.54
All-India 842 (-)196.01 (-)188.46 5647.90 6115.70 45.06 44.88 40.54 40.03
* Data Provisional - The data for the year 2010-11 in respect of Haryana, Kerala, Odisha, Punjab, Tamil Nadu, Assam, Bihar, Puducherry and Tripura is
repeated from the previous year.
Table 4.8: Region-wise Working Results of PCARDB
(As on 31 March)
(`̀̀̀̀ crore)
2009-10 2010-11 Total NPAs NPA % to Recovery % Loans As on
Region No. Profit Loss No. Profit Loss Outstanding 30 June
No. Amt. No. Amt. No. Amt. No. Amt. 2010 2011 2010 2011 2010 2011
Central 50 16 2.21 34 35.74 50 10 15.00 40 80.47 623.47 638.76 52.30 57.89 44.06 37.55
Eastern 66 38 33.61 28 16.37 66 38 33.61 28 16.37 249.33 174.29 63.90 58.75 46.70 46.70
Northern 145 104 50.52 41 205.03 145 105 52.15 40 205.15 2,260.42 2256.91 30.85 30.89 46.40 47.36
Southern 406 137 44.53 269 86.68 406 176 59.16 230 55.83 1,273.80 1283.80 37.30 37.29 40.96 44.47
Western 29 0 0 29 0 29 0 0 29 0 480.60 480.60 75.00 75.00 7.97 20.83
All-India 696 295 130.87 401 343.82 696 329 159.92 367 357.82 4887.62 4834.36 51.87 51.96 37.22 39.38
79
per cent (table 4.5 and 4.6). In absolute terms, gross
NPA was estimated at `5,719.29 crore for SCB and
`15,246.94 crore for DCCB as on 31 March 2011,
registering an increase of 31.41 per cent for SCB and
decline of 7.0 per cent for DCCB over the previous
year. The percentage of gross NPA to total loans and
advances outstanding in the SCARDBs as on 31
March 2011 decreased to 44.88 per cent from 45.06
per cent in the previous year. Similarly, gross NPA for
PCARDBs marginally increased to 51.96 per cent as
on 31 March 2011 from 51.87 per cent in the previous
year. The gross NPA of SCARDBs and PCARDBs were
estimated at `6115.70 crore and `4834.36 crore as on
31 March 2011 showing an increase of 8.28 per cent
and a decline of 1.09 per cent respectively. The asset
classification of NPA of SCBs, DCCBs, SCARDBs and
PCARDBs are given in Table 4.9.
4.14 The NPA of SCBs was lowest in Northern
region (3.01%) followed by Southern region (4.94%),
Central region (6.13%), Eastern region (6.83%) and
these regions had a lower percentage of NPA as
compared to the all-India average of 9.01 per cent
during 2010-11. In the Western (20.57%) and North-
Eastern (41.10%) regions, the gross NPA was higher
than the all-India average. SCBs in Chandigarh,
Jammu & Kashmir, Bihar, Maharashtra, Kerala,
Puducherry, Arunachal Pradesh, Assam, Manipur,
Meghalaya, Mizoram, Nagaland, and Tripura continued
to have high level of NPA. In the case of DCCBs, as
compared to the all India average of 11.61 per cent,
NPA in Northern region (6.19%) and southern
(9.46%) regions were lower during 2010-11.
4.15 The average loan recovery of SCBs showed
no change and remained at 92 per cent as on 30 June
2011, while that of DCCBs increased from 76 per cent
as on 30 June 2010 to 79 per cent as on 30 June
2011 (Table 4.10). The loan recovery of Andaman &
Nicobar SCB increased considerably to 92.11 per cent
as on 30 June 2011 from 59.18 per cent as on
30 June 2010. SCBs in Chhattisgarh, Chandigarh,
Goa, Kerala and Meghalaya had improved their loan
recovery performance. However, SCB in Jammu &
Kashmir, Maharashtra, showed decline in recovery of
loans during 2010-11.
4.16 The average loan recovery of SCARDBs
marginally declined to 40 per cent as on 30 June
2011 from 41 per cent as on 30 June 2010. While, in
the case of PCARDB, recovery of loans improved to
39 per cent as on 30 June 2011 compared to 37 per
cent during the previous year. The loan recovery of
SCARDBs in Jammu & Kashmir, Rajasthan, Gujarat
and Uttar Pradesh increased fairly. However, declining
trend in recovery performance was recorded by
SCARDBs in Chhattisgarh, Madhya Pradesh, Himachal
Pradesh, Karnataka and Maharashtra. The loanTable 4.9: Composition of NPA of Co-operative Banks(As on 31 March 2011)
(` crore)
Asset SCB* DCCBs* SCARDBs PCARDB#Classification
Sub-Standard 1714.82 6031.73 2832.64 2521.17
Doubtful 2505.19 6496.99 1771.70 1802.65
Loss Assets 1499.27 2718.22 127.27 53.58
Total NPAs 5719.28 15246.94 4731.61 4377.40
Provisions required 3523.99 10983.67 1188.28 1040.60
Provisions made 3997.93 12392.75 1445.56 1113.13
* Data Provisional -The STCCS data for the year 2010-11 in respectof Uttarakhand, Bihar and West Bengal states repeated.
# The LTCCS data for the year 2010-11 in respect of Haryana,Kerala, Odisha, Punjab, Tamil Nadu, Assam, Bihar, Puducherryand Tripura is repeated from previous year.
Table 4.10: Percentage of Recovery of loans to Demand(As on 30 June)
Agency 2009 2010 2011*
SCBs 92 92 92
DCCBs 72 76 79
SCARDBs 41 41 40
PCARDBs 39 37 39
* Data Provisional - The STCCS data for the year 2010-11 inrespect of Uttarakhand, Bihar, West Bengal, Assam,Manipur, Mizoram and Tripura states repeated.
* The LTCCS data for the year 2010-11 in respect ofHaryana, Kerala,Odisha, Punjab, Tamil Nadu, Assam, Bihar,Puducherry and Tripura is repeated.
80
Jammu & Kashmir (1), Bihar (5), Jharkhand (7) West Bengal (3),Madhya Pradesh (9), Uttar Pradesh (15), Uttarakhand (2), Maharashtra (3)
Haryana (3), Rajasthan (4), Bihar (10), Jharkhand (1), Odisha (3),West Bengal (5), Madhya Pradesh (7), Uttar Pradesh (15), Gujarat (1),Maharashtra (9), Karnataka (1), Kerala (1), Tamil Nadu (3)
Haryana (15), Himachal Pradesh (1), Jammu & Kashmir (2) Punjab (1),Rajasthan (15), Bihar (6), Odisha (11), West Bengal (7), Madhya Pradesh (14),Chhattisgarh (6), Uttar Pradesh (12), Uttarakhand (2), Gujarat (7),Maharashtra (9), Andhra Pradesh (6), Karnataka (3), Kerala (2), Tamil Nadu (5)
Haryana (1), Himachal Pradesh (1), Punjab (19), Rajasthan (10),Bihar (1), Odisha (3), West Bengal (2), Madhya Pradesh (8), Uttar Pradesh (8),Uttarakhand (6), Gujarat (10), Maharashtra (10), Andhra Pradesh (16),
Karnataka (17), Kerala (11), Tamil Nadu (15)
Arunachal Pradesh, Manipurand Meghalaya (3)
J & K (1)
Chandigarh, HimachalPradesh, Bihar, Maharashtra,Assam, Nagaland, Sikkim,Mizoram and Tripura (9)
Chhattisgarh, MP, UP,Uttarakhand, Delhi, Haryana,Punjab, Rajasthan, Andaman& Nicobar, Odisha, WestBengal, Goa, Gujarat, AndhraPradesh, Karnataka, Kerala,Puducherry andTamil Nadu (18)
Total 31 370
* Data Provisional - The data for the year 2010-11 is repeated from previous year in respect of SCBs & DCCBs in Uttarakhand, Bihar, Assam,Manipur, Mizoram and Tripura.
<40
>40 and <60%
>60 and <80%
>80%
Table 4.12: Frequency Distribution of States/UTs according to Level of Loan Recovery of SCBs and DCCBs
(As on 30 June 2011)
Recovery (%) SCBs* DCCBs*
Table 4.11: Frequency Distribution of Co-operative Banks According to Range of Loan Recovery Percentage(As on 30 June)
(Number)
Recovery (%) SCBs* DCCBs* SCARDBs**@ PCARDBs*@(Recovery to (No.) (No.) (No.) (No.)demand)
2010 2011 2010 2011 2010 2011 2010 2011
<40 1 3 47 47 10 10 337 337>40 to < 60 1 1 77 77 4 4 205 205>60 to < 80 12 9 121 121 4 4 113 113
>80 17 18 124 124 1 1 42 42
Total 31 31 369 369 19 19 697 697
*: Data Provisional - The data for the year 2010-11 is repeated from previous year in respect of SCBs & DCCBs in Uttarakhand, Bihar, Assam,Manipur, Mizoram and Tripura. Data for one DCCB in MP not available.
@: The LTCCS data for the year 2010-11 in respect of Haryana, Kerala, Odisha, Punjab, Tamil Nadu, Assam, Bihar, Puducherry and Tripura isrepeated from the previous year.
**: Manipur SCARDB is defunct.
recovery of PCARDBs had improved in Maharashtra,
Karnataka, Rajasthan, while it showed decline in
PCARDBs in Chhattisgarh, Madhya Pradesh states.
4.17 The frequency distribution of loan recovery of
banks in the co-operative structure is presented in
Table 4.11 to Table 4.13.
81
Chattisgarh, Madhya Pradesh,
Bihar, Assam, J & K, Tamil
Nadu and Maharashtra
Uttar Pradesh, Odisha, West
Bengal, Haryana, Himachal
Pradesh, Rajasthan and
Gujarat
Tripura and Punjab
Kerala and Puducherry
Chhattisgarh (2), Haryana (15), Karnataka (59), Kerala (3), Madhya Pradesh
(29), Maharashtra (29), Odisha (26), Punjab (8), Rajasthan (16), Tamil Nadu
(170) West Bengal (11) (368)
Chhattisgarh (7), Haryana (4), Karnataka (77), Kerala (15), Madhya Pradesh (7),
Odisha (11), Punjab (24), Rajasthan (15), Tamil Nadu (8), West Bengal (9) (177)
Chattishgarh (3), Himachal Pradesh (1), Karnataka (37), Kerala (20),
Madhya Pradesh (2), Odisha (5) Punjab (29), Rajasthan (4), Tamil Nadu (2),
West Bengal (2) (105)
Karnataka (4) Kerala (8), Odisha (4), Punjab (28), Rajasthan (1), West Bengal (2)
(47)
< 40 %
> 40 % and
< 60%
> 60% and
< 80%
> 80%
Total 19* 697
* Data in respect of Manipur SCARDB and Maharastra SCARDB not available ; Data in respect of SCARDB and PCARDB for the states inBihar, West Bengal, Punjab, Kerala, Gujarat, and Maharashtra repeated from previous year
Table 4.13: Frequency Distribution of States/UTs according to Levels of Loan Recovery of SCARDBs and PCARDBs(As on 30 June 2011)
Recovery SCARDBs PCARDBs *
c. Supersession of Elected Boards
4.18 NABARD, as a matter of policy, continues to
emphasize the need for co-operative banks to be
managed by duly elected Boards of Management (one
of the covenants of the memorandum of
understanding (MoU), executed by State Governments
under the GoI revival package for STCCS). Despite
this, the practice of superseding elected Boards
continued in some States. As on 31 March 2011, duly
elected Boards were superseded in 9 SCBs and 86
DCCBs in ST structure. Supersession was done in 7
SCARDBs also and in 284 PCARDBs in the LT
structure (Table 4.14).
4.19 Co-operative credit institutions suffer from low
resource base, high dependence on higher financing
agencies, imbalances, poor business diversification and
recoveries, huge accumulated losses, lack of
professionalism and skilled staff, weak MIS, poor
internal checks and control systems, etc. leading to
heavy accumulated losses.
Table 4.14: Elected Boards under Supersession(As on 31 March 2011)
Particulars SCBs* DCCBs* SCARDBs* PCARDBs*
Total Institutions (No.) 31 370 20 697
Boards under Supersession (No.) 9 86 7 284
Boards under Supersession (%) 29 23 35 41
*: The data for the year 2010-11 is provisional
82
d. Development Action Plan (DAP)/Memorandum of Understanding(MoU)-
4.20 Keeping in view the viability of the bank on
sustainable basis, the process of preparing institution
specific DAP and executing MoU began in 1994-95.
It was implemented in four phases, 1994-95 to
1999-2000 (Phase I), 2000-01 to 2003-04 (Phase II),
2004-05 to 2006-07 (Phase III). The PACS were
advised to prepare Viability Action Plans under the
guidance of DCCBs and to enter into MoUs with the
respective DCCBs in the third phase. The fourth
phase of DAP/ MoU was for the period April 2007 to
March 2012. As many as 21 SCBs and 10 SCARDBs
and State Governments concerned had executed
DAP/MoU with NABARD for fourth phase. The
progress in implementation of DAPs is monitored and
review is held during quarterly meetings of State
Level Task Force (SLTF) at State level and District
Level Monitoring and Review Committee (DLMRC) at
district level. The banks have been advised by ROs to
prepare DAP for 2012-13 based on the existing
guidelines. The banks which seriously follow the
targets under DAP have grown financially stronger.
Further, implementing DAP in phases gives an
opportunity to learn from past experience and refine
their policies.
e. Co-operative Development Fund
4.21 The Co-operative Development Fund (CDF)
was constituted in 1993 under Section 45 of NABARD
Act 1981, with an initial contribution of `10 crore. The
fund is replenished every year through contributions
from NABARD’s surplus. Assistance from the Fund is
available to co-operatives in the form of soft loans/
grants for resource mobilisation, human resource
development, capacity building and operational
streamlining, setting up of PACS Development Cells in
DCCBs etc., which in turn contribute to their
functional efficiency. During 2011-12, financial
assistance of `7.09 crore was sanctioned and `5.34
crore disbursed (including disbursements against
sanctions of previous years). As on 31 March 2012,
cumulative sanctions and disbursements were `105.26
crore and `92.91 crore, respectively. The balance in
the Fund as on 31 March 2012 stood at `125 crore.
f. Organisation DevelopmentInitiatives (ODI)
4.22 Organisation Development Initiatives (ODI),
being conducted by NABARD since 1994-95 is a
re-engineering process which facilitates and aims at
achieving change in the organisational structures.
Keeping in view the changing environment for RRBs
(Amalgamation) and co-operative banks (adoption of
revival package for STCCS), the design, methodology
and objective of ODIs would now be more focused
towards enabling financial inclusion and sustainable
viability. As RRBs and co-operative banks face
different kind of problems and opportunities, separate
approaches were worked out for these institutions.
During the year, emphasis was laid on conducting
ODIs in RRBs which are not compliant with section
42(6) of RBI Act, 1934 and the SCB and DCCBs not
complying with section 11 of BR Act 1949 (AACS).
With a view to assess the impact of ODI, the ROs
were advised to evaluate the process for fine-tuning
the ODI process. During 2011-12, 03 ODI viz. ODI
(phase I) in Vizianagaram DCCB (Andhra Pradesh),
Hazaribagh DCCB (Jharkhand) and Phase I - follow
up visit of Cuttack DCCB (Odisha) have been
conducted . ODI has been able to inculcate a sense
of responsibility among the employees in achieving the
targets set by the management. Further, ODI is a
motivation to employees and helps in increasing their
productivity and profits of the organisation, given that
the functioning of other internal and external factors
remain the same.
83
g. Standard Audit Manual for PACS
4.23 NABARD-GIZ Rural Financial Institutions
Programme (RFIP) undertook the task of preparation
of Standard Audit Manual for PACS through study
visits to Gujarat and Odisha. The objectives were:
(i) Revising audit framework for PACS in consultation
with the stakeholders; (ii) Developing a Model/
Standard Audit Manual for PACS based on the revised
audit frameworks; (iii) Developing audit rating tool for
PACS; and (iv) Developing a training programme for
PACS auditors on the revised audit system. The
contents of the draft Audit Manual for PACS were
discussed with the select Government Auditors and
Banks and the inputs have been incorporated in
updating the manual. The manual will be printed and
circulated among all concerned in 2012-13.
h. Centre for Professional Excellencein Co-operatives (C-PEC)
4.24 Under the purview of institutional
development efforts, NABARD established a “Centre
for Professional Excellence in Co-operatives” (C-PEC)
in BIRD, Lucknow. The Centre will get support for a
period of 5 years from January 2009 from NABARD,
GTZ and Govt. of India under “Rural Financial
Institutions Programme, India” (RFIP) formulated as a
result of Indo-German bilateral technical cooperation
negotiations.
Broad objectives of C-PEC are:
To coordinate the training efforts of various
Co-operative Training Institutes (CTIs)
To develop a process of accreditation of
national and state level CTIs
To evolve uniform standards for training
To build and certify the professional
competence in CCS
i. Revival Package for Short-Term RuralCo-operative Credit Structure
4.25 Twenty-five States (covering 96 per cent of the
STCCS in the country), have executed the MoU with
GoI and NABARD, for implementing the revival
package announced by the GoI in 2006. The
integrated package for the STCCS units envisages
introduction of legal/institutional reforms, initiating
measures to improve the quality of management and
provision of financial assistance for cleansing the
balance sheets and meeting CRAR of 7 per cent as
assessed through Special Audits and for capacity
building & computerisation.
i. Special Audit and Release of
Recapitalisation assistance
4.26 The special audits of STCCS, as on 31 March
2004, to arrive at the precise amount of losses after
factoring in prudential provisioning norms and the
sharing pattern, was completed in 80,837 PACS
across 25 States. Special audit of DCCBs has been
completed in all fifteen States (except Punjab &
Uttarakhand) which have DCCBs. Special Audit of
SCBs have been completed in 17 States/UTs and is in
progress in 3 States. An amount of `9002.98 crore
has been released by NABARD as GoI share for
recapitalisation of 53,205 eligible PACS in seventeen
States, 1510 ineligible PACS affiliated to 30 DCCBs
in three States and 13 DCCBs in Orissa, while the
State Governments concerned have released `855.53
crore as their respective share. Of this, `412.84 crore
was released to DCCBs as GoI share in respect of
1,510 ineligible PACS in 3 States viz., Gujarat,
Maharashtra and Odisha. An amount of `67.87 crore
has been released by NABARD as GoI share for
recapitalisation of 13 DCCBs in Orissa. Statutory
audit as on 31 March 2011 in SCB and all DCCBs
from NABARD approved panel has been completed
in all 24 States.
84
ii. Legal and institutional Reforms
4.27 The participating States are required to amend
their Co-operative Societies Acts (CSA) for securing
the democratic character and autonomy of
co-operatives and for their regulatory control by RBI.
So far, twenty one States have amended their CSA.
The draft amendments proposed by the remaining four
States have been vetted by NABARD, even as
previous amendments in two of these States are
awaiting Presidential assent. Consequent upon the
amendment to the State Co-operative Societies Act,
the rules and bye laws are amended/being amended
by the States.
iii. Common Accounting System and
Management Information System and
Computerisation in PACS
4.28 The process of adoption of Common
Accounting System (CAS) and Management
Information System (MIS) formulated for PACS is
underway in 20 States, while in the remaining States
where the MoU has been signed, the RCS concerned
have been advised to adopt CAS on the lines
suggested by NABARD. Training on CAS/MIS has
been imparted to the PACS functionaries in all the
implementing States.
4.29 Computerisation has been envisaged under
the package to facilitate speedier and smooth
implementation of CAS/MIS. Andhra Pradesh,
Haryana and Tamil Nadu have developed State
specific software to implement CAS/MIS in the PACS
in their respective States. The softwares are in different
stages of roll out in these three States.
4.30 As decided in the VIII meeting of the National
Implementing and Monitoring Committee (NIMC) held
in September 2009, common software (referred to as
Core Software) was finalised by NABARD and sent to
all 20 States that had opted for it. As per guidelines,
dry run of the software is required to be done in each
of the States before roll out. Accordingly, 13 States
have initiated dry run in three PACS each. Dry run of
the software has been completed in eight States viz.,
Assam, Chhattisgarh, Gujarat, Maharashtra, Madhya
Pradesh, Odisha, Uttar Pradesh and West Bengal and
is in progress in 5 States. The remaining 7 States have
been advised to initiate the process at the earliest.
iv. HRD Initiatives
4.31 The package lays emphasis on training and
capacity building of Board Members and functionaries
of STCCS. Till date, training has been imparted to 410
master trainers from 25 States, who in turn have
trained 2637 district level trainers. As on 31 March
2012, training has been imparted to 86,276
Secretaries of PACS from twenty one States, 1,29,599
elected Board Members of PACS from 18 States, 374
CEOs of DCCBs from 17 states, CEOs of SCBs in 8
NER States and 3,519 Directors of DCCBs/SCBs from
16 states. In addition, training on CAS/MIS has been
imparted to 76,237 PACS functionaries and 4,490
bank supervisors/ departmental auditors. 38,940 PACS
staff in 12 States have been trained on Business
Development and Profitability so far. Further, 8169
Branch Managers/Senior Officers of DCCBs/SCBs in
25 States have been trained on business development/
diversification. During the year, a three-day
Orientation programme for Supervisors/ Inspectors of
PACS has been developed. Forty-five Master trainers
have been trained in the module by BIRD
Lucknow.The programme is in the process of being
rolled out.
v. Incentive Scheme for Audit clearance in
PACS
4.32 Statutory audit as on 31 March 2004 was
completed in 80,837 PACS to facilitate implementation
of Revival Package. A need was felt to provide a
one-time assistance to PACS to facilitate/update the
85
audit so that it is regularly completed on continuous
basis. Hence, a one- time Scheme for Audit clearance
in PACS has been formulated and circulated among
the ROs. The objective of the scheme is to provide an
incentive to PACS for clearing arrears of audit by 31
December 2011. One time incentive of `8000/- will be
given to each PACS for clearing the arrears of audit
upto the financial year ending 31 March 2011, latest
by 31 December 2011. The incentive is applicable to
PACS having arrears in audit and those that complete
the audit upto 2010-11 latest by 31 December 2011.
The Scheme was operative till 31 March 2012.
Expenditure under the Scheme will be met out of CDF
of NABARD.
vi. Impact of the Revival Package
4.33 In most of the SCBs/DCCBs of implementing
States, fit and proper criteria for CEO/Professional
Directors has been adopted which had a positive
impact on the governance of the STCCS and helped
in improving their financial position. The credit
absorption capacity of those PACS which had received
recapitalisation assistance, have increased substantially
as could be observed from the credit disbursement
patterns during the period from 2007-08 to 2009-10.
Business Development Plan (BDP) have been
prepared by PACS across the states in general and
specially in most of the entities in states like
Chhattisgarh, Karnataka, etc. Specialised Training
Programme on BDP and governance to PACS
Secretaries/ staff has shown positive impact. Second
Phase of Impact Studies on Implementation of the
Revival Package in 13 States has been awarded to
three agencies. The impact studies have brought out a
number of positive features (Box 4.1).
vii. Revival of Long-Term Rural Co-operative
Credit Structure
4.34 The Task Force constituted by GoI under the
Chairmanship of Shri G. C. Chaturvedi, to review the
need for a separate package for Revival of LTCCS
submitted its report to the Government of India on 25
February 2010. Announcement of the Package by the
GoI is awaited.
Box 4.1: GoI Revival Package for STCCS : Impact Assessment Study
Overall outcome of the Revival Package has been
positive and visible in several ways such as the
institutional and legal reforms that have been
undertaken so far. Co-operative Societies Act,
Rules and Bye-laws have been amended thus
creating the basis for autonomy to the banks/PACS.
Release of recapitalisation assistance has
improved liquidity of PACS and has enabled
them to re commence lending and restore cash
flow and income streams.
The overall efficiency and functioning of PACS
has improved after implementation of the Revival
Package. There is increased awareness among
members regarding the reforms process like
autonomy of CCS, reduction of government
interference, need for diversified business
development, and responsibility & accountabilityof Boards to run the affairs.
Financial indicators have shown varying degreesof improvement in all three tiers of CCS duringthe implementation period of the Package.
Loans disbursed by PACS during the period2006-07 to 2009-10 have registered growth ratesranging from 73 per cent in Uttar Pradesh to 53per cent in Madhya Pradesh and 23 per cent inOdisha. The Annual Average Growth Rate(AAGR) during the period 2003-04 to 2009-10ranged from 62 per cent to 38 per cent (in Stateslike Odisha and Haryana).
SF/MF coverage was a priority with the CCS andcontinued to be around 70 per cent during theperiod 2006-07 to 2009-10 in Madhya Pradesh& Uttar Pradesh.
86
Table 4.15: Indicators of Performance(As on 31 March)
(` crore)
Particulars 2009 2010 2011 2012#
No .of RRB (No.) 86 * 82* 82 82
Branch Network (No.) 15181 15480 16001 16914
Share Capital 197.00 197.00 197.00 197.00
Share Capital Deposit 3959.30 3984.91 4076.34 4559.43
Reserves 6753.99 8065.26 9565.58 11135.19
Deposits 120188.90 145034.95 166232.34 187351.37
Borrowings 12734.65 18770.06 26490.80 30271.71
Investments 65909.92 79379.16 86510.44 89145.79
Loans & Advances (Outstanding) 67802.10 82819.10 98917.43 120550.66
Loans Issued 43367.13 56079.24 71724.19 78546.55
RRB earning Profit (No.) 80 79 75 79
Amount of Profit (A)$ 1823.55 2514.83 2420.75 2469.18
RRB incurring Losses (No.) 6 3 7 3
Amount of Losses (B) 35.91 5.65 71.32 25.77
Gross Profit (A – B)$ 1787.64 2509.18 2349.43 2443.41
Accumulated Losses 2299.98 1775.06 1532.39 1104.85
RRB with no accumulated losses (No.) 31 27 23 22
Recovery (%) 77.85 80.09 81.18 82.63
NPA to loans outstanding (%) 4.14 3.72 3.75 4.14
Net worth 8610.31 10472.10 12306.53 14786.77
*: Number reduced due to amalgamation. $ Before Tax # Data is Provisional
Regional Rural Banks
75 with `2420.75 crore in 2010-11. The remaining 3
RRBs incurred losses of `25.77 crore as compared to
loss of `71.32 crore posted by 7 RRB in 2010-11. The
number of sustainably viable RRBs (i.e. RRBs making
net current profit and having no accumulated losses)
had increased to 60 as on 31 March 2012 as
compared to 58 as on 31 March 2011. The aggregate
reserves of RRBs increased to `11,135.19 crore and
net worth increased to `14786.77 crore as on
31 March 2012. (Table 4.15) The accumulated losses
of RRBs have decreased by 27.90 per cent over the
previous year. The performance of RRBs varied across
the regions in 2011-12. While all RRBs in the
Northern, Southern, and Western region made profit,
22 (of 23), 13 (of 14) and 7 (out of 8) RRBs posted
profit in the Central, Eastern and North Eastern
regions, respectively, (Table 4.16).
a. Financial Performance
4.35 Post amalgamation, the number of RRBs in
the country as on 31 March 2012 stood at 82, with a
network of 16,914 branches covering 635 notified
districts in 26 States and the UT of Puducherry. Over
a period of three years (2009–10 to 2011-12), the
deposits and investments increased by 29.18 per cent
and 12.30 per cent, respectively, the borrowings
increased by 61.28 per cent and loans and advances
(outstanding) increased by 45.56 per cent
(Table 4.15).
4.36 Financial results of RRBs for the year 2011-12
indicate that there was improvement in their
performance with 79 out of 82 RRBs showing pre-tax
profit to the extent of `2469.18 crore as compared to
87
Table 4.16: Region-wise Working Results of RRB
(As on 31 March 2012*)
(` crore)
Region RRB Profit Loss Net Accumu Loans & Gross NPA Recovery (%)No. Earning Incurring Profit lated Advances (As on 30 June)
No. Amt. No. Amt. Losses O/S Amount % 2010 2011
Central 23 22 752.53 1 3.70 579.89 77.80 31477.15 2040.71 6.48 76.10 81.29
Eastern 14 13 400.45 1 18.10 326.99 702.00 20109.98 990.53 4.93 73.46 72.03
Northern 15 15 404.86 0 0.00 264.15 181.66 17546.74 370.80 2.11 88.71 88.76
North - Eastern 8 7 201.53 1 3.97 154.18 95.16 5429.02 259.25 4.78 74.49 74.69
Southern 16 16 614.53 0 0.00 473.67 0.00 40462.11 1164.15 2.88 83.97 84.92
Western 6 6 95.28 0 0.00 55.35 48.23 5525.66 168.71 3.05 75.96 75.77
All India 82 79 2469.18 3 25.77 1854.23 1104.85 120550.66 4994.15 4.14 81.18 82.63
* Data Provisional
< 40
> 40 and < 60
> 60 and < 80
>80
Nil
Bihar (1), Jharkhand (1), Manipur (1), West Bengal (1) (4)
Andhra Pradesh (2), Arunachal Pradesh (1), Assam (1), Bihar (2), Chhatisgarh (2), Haryana (1), J & K (1),
Jharkhand (1),Karnataka(3), Maharashtra (3), Madhya Pradesh (5),Meghalaya (1),Nagaland (1), Odisha (5),
Uttar Pradesh (7), Uttarakhand (1), West Bengal (2) (39)
Andhra Pradesh (3), Assam (1), (Bihar (1), Chhatisgarh (1), Gujarat (3), Haryana (1), Himachal Pradesh
(2), J & K (1), Karnataka (3), Kerala (2), M.P (3), Mizoram (1), Puducherry (1), Punjab (3), Rajasthan (6),
Tamil Nadu (2), Tripura (1), U.P. (3), Uttaranchal (1) (39)
Table 4.17: Frequency Distribution of States According to Levels of Recovery of RRB(As on 30 June 2011)
Recovery (%) States
b. Recovery Performance
4.37 The recovery performance of RRBs was 82.63
per cent, as on 30 June 2011 as compared to 81.18
per cent as on 30 June 2010 (Table 4.16). Further, 05
out of 23 RRB in Central Region, 1 out of 14 in
Eastern, 13 out of 15 in the Northern, 2 out of 6 in
Western and 08 out of 16 RRBs in Southern region
had registered a recovery performance above 80% per
cent in the year 2010-11 (Table 4.17). Twelve RRBs in
the country had achieved a recovery percentage of
above 90 while four RRBs had a poor recovery
percentage of less than 60.
c. Non-Performing Assets
4.38 The aggregate gross NPA of all RRBs
increased from 3.75 per cent, as on 31 March 2011 to
4.14 per cent as on 31 March 2012.
d. Branch Expansion Programme/CoreBanking Solution
4.39 RRBs were given a target of opening 2000
new branches by March 2012. In the current year, as
on 31 March 2012, RRBs had opened 913 new
branches, taking the cumulative number of branches
88
of all RRBs to 16,914 spread over 635 districts in 26
states and one UT. It is now compulsory for all new
branches to be equipped with Core Banking Solution
(CBS). The sponsor banks are required to extend all
necessary help in this regard, including financial
assistance, training, back office support, etc. RRBs
were directed by GoI to implement CBS in all their
branches by September 2011. As on date, CBS has
been fully implemented in 80 RRBs. J & K GB has
implemented CBS in 90 branches out of 184
branches. Kisan Kshetriya Gramin Bank (UP) has not
been able to make any progress on CBS
implementation in the bank, as it is linked to its
merger with Aryavrat GB.
e. Financial Inclusion
4.40 The RRBs have emerged as a strong
intermediary for Financial Inclusion in rural areas by
opening a large number of “No Frills” accounts and
financing under General Credit Card (GCC). Total
number of business accounts (deposit plus loan
accounts) with RRBs stood at 1,363.09 lakh, as on
31 March 2012 (Table 4.18).
f. Recapitalisation of RRBs
4.41 The Chakrabarty Committee reviewed the
financial position of all RRBs in 2010 and
recommended for recapitalisation of 40 out of 82
RRBs for strengthening their CRAR to the level of 9
per cent by 31 March 2012. According to the
Committee, the remaining RRBs are in a position to
achieve the desired level of CRAR on their own.
Accepting the recommendations of the committee, the
GoI along with other shareholders decided to
recapitalise the RRBs by infusing funds to the extent of
`2,200 crore. The shareholder wise proportion (GoI/
Sponsor Banks/State Governments) is 50:35:15
respectively.
4.42 As on 31 March 2012, an amount of
`1,046.11 crore has been released to 27 RRBs in 16
States. The released amount includes GoI’s
contribution of `468.92 crore, State Government’s
contribution of `173.16 crore and Sponsor banks
contribution of `404.03 crore. The recapitalisation is
completed in respect of 16 RRBs (5 in Odisha, 3 in
MP, 2 in Uttarakhand and one each in Assam,
Arunachal Pradesh, Nagaland, Tripura, J&K and
Karnataka). Further, amount pending for release by
GoI in respect of nine RRBs is `108.25 crore. After
release by GoI recapitalisation will be completed in
respect of these nine RRBs also. Maharashtra State
Government. has released the amounts partially in
respect of two RRBs. The six State Govts. viz.,
Manipur (2), UP (3), West Bengal (4), Rajasthan (5),
Mizoram (6), and J&K have not released any amount
in respect of 13 RRBs operating in their states.
Table 4.18: Status of Financial Inclusion - RRB(As on 31 March 2012)*
(No. in lakh)
Of total Loan Accounts, major areas ofFinancial Inclusion
Year No. of Of which, No. of GCC SHG KCC Tenants SSI, Artisans, Deposit ‘No-Frills’ Loan Farmers SCC & retail
Accounts Accounts Accounts trade
2011-12 1157.47 260.94 205.62 5.2 8.62 9.74 1.91 28.15
*: Data provisional
89
g. Recruitment in RRBs
4.43 Government of India, Ministry of Finance,
Department of Financial Services vide their letter no.
F No.3/8/2010-RRB dated 23 February 2012 has
instructed that from the year 2012-13 and onwards,
there will be a Common Written Examination which
will be conducted by Institute of Banking Personnel
which were communicated to the banks concerned,
Registrar of Co-operative Societies (RCS), State
Governments (in respect of co-operative banks) and
Sponsor Banks (in respect of RRBs) for corrective
action. NABARD also held discussions with the Board
of Directors of SCBs/DCCBs/RRBs apprising them of
the deficiencies found in the inspection and urging
them to initiate immediate remedial action. Besides,
meetings were also held with the CEOs of the banks
concerned to secure satisfactory compliance wherever
necessary. Supervisory ratings were also conveyed in
confidence to the Top Management of the banks.
b. Board of Supervision
4.46 The Board of Supervision (BoS) constituted
by the Board of Directors of NABARD in 1999, met
four times during the year 2011-12. The BoS reviewed
(i) the functioning of SCBs, CCBs and SCARDBs as
brought out in the inspections, (ii) the working of
RRBs sponsored by Bank of Baroda, Central Bank of
India, Associate Banks of SBI and Andhra Bank,
(iii) reports of frauds in the supervised banks,
(iv) functioning of weak CCBs in Uttar Pradesh,
Maharashtra and Gujarat (v) review of a few good
working banks, (vi) major observations from the
investment portfolio in SCBs, CCBs and RRBs and
(vii) banks’ adherence to exposure norms. The BoS
also approved (i) the revised Supervisory Rating
Scales of RRBs, (ii) the revised Guidelines for the on-
site inspection of RRBs, (iii) the revised exposure
Selection (IBPS) for recruitment of officers and staff in
RRBs. NABARD has been entrusted with the
responsibility of coordination and Supervision of the
selection process besides finalization of the
methodology for the conduct of the Common Written
Examination.
Supervision of Banks
4.44 NABARD inspects SCBs and CCBs in terms of
the powers vested under Section 35(6) of the Banking
Regulation Act, 1949 (As Applicable to Co-operative
Societies) and RRBs under Section 35(6) of the B.R.
Act, 1949. NABARD also conducts voluntary
inspection of SCARDBs, Apex level Co-operative
Societies and Federations. Considering the unique
nature of all these institutions, the supervisory role of
NABARD, apart from ensuring conformity with
banking regulations and prudential norms, is a very
comprehensive and holistic one, encompassing
inspections (on-site and off-site), portfolio studies,
monitoring, guiding and facilitating functions. The
periodicity of statutory inspections of all SCBs and
those CCBs and RRBs not complying with minimum
capital requirements as stipulated under the B. R Act,
1949 (AACS)/RBI Act 1934 and voluntary inspections
of all SCARDBs, continues to be annual. The statutory
inspections of those CCBs and RRBs with positive net
worth and voluntary inspections of Apex Co-operative
Societies/Federations are conducted once in 2 years.
A. Operational Matters
a. Inspection of Banks
4.45 During 2011-12, statutory inspections of 319
banks (31 SCBs, 240 CCBs and 48 RRBs) and
voluntary inspections of 15 SCARDBs have been
conducted as programmed. The inspections brought
out supervisory concerns relating to these institutions,
90
With the implementation of theGovt. of India’s Package forRevival of Short-Term Rural Co-operative Credit Structure,NABARD, in collaboration withthe ICAI, has initiated theprocess of preparation of AuditManual for the guidance ofChartered Accountantsundertaking the Statutory Auditof SCBs/CCBs.
norms under Credit Monitoring Arrangements (CMA)
for co-operative banks, etc.
c. Health of Supervised Banks
i. Compliance with Minimum Share Capital
Requirement
4.47 During the year 2011-12, one SCB and 18
CCBs improved their financial position and recomplied
with the provisions of Section 11(1) of the B.R. Act,
1949 (AACS) i.e., minimum capital requirements. As
on 31 March 2012, 49
banks (4 SCBs and 45
CCBs) were not
complying with the
provisions of Section
11(1) of the B.R. Act,
1949 (AACS).
ii. Grant of Licence/Scheduling of Banks
4.48 Pursuant to the recommendations of the
Committee on Financial Sector Assessment (CFSA)
(Chairman: Dr. Rakesh Mohan, the then Deputy
Governor of RBI), the RBI had revised the licensing
norms for co-operative banks during October 2009.
The number of licensed SCBs and CCBs stood at 24
and 222, respectively, as on 31 March 2011. During
the year 2011-12, RBI issued licenses to 4 SCBs and
82 CCBs, thus increasing the number of licensed
banks to 332 (28 SCBs and 304 CCBs) as on 31
March 2012. The number of scheduled SCBs remained
unchanged at 16. The problems in attaining licensing
eligibility by co-operative banks in some States were
reviewed periodically by the Hon’ble Minister for
Agriculture, Government of India and Secretary,
Ministry of Agriculture, GoI.
4.49 From its very inception, all the RRBs were
included in the Second Schedule to the RBI Act 1934.
However, amalgamated RRBs being new entities could
become Scheduled Banks only with the approval of
the RBI, on the basis of recommendations given by
the NABARD, after conducting statutory inspection.
Forty-four amalgamated RRBs were included by the
RBI in the Second Schedule to the RBI Act, 1934,
after they were
found complying
with Section
42(6)(a)(ii) of the
Act, ibid. With this,
the number of
scheduled RRBs
stood at 80 out of
82 as on 31 March
2012.
iii. Compliance with various Statutory
Provisions
4.50 As on 31 March 2012, 4 SCBs and 45 CCBs
were found to be non-compliant with Section 22(3) (a)
of the B.R.Act, 1949 (AACS), as regards their capacity
to pay their depositors in full and 9 SCBs and 93
CCBs did not comply with Section 22(3)(b) of the Act,
ibid/Section 42(6)(a)(ii) of RBI Act, 1934, as the affairs
of these banks were construed to have not been
conducted in a manner not detrimental to the interests
of their depositors. Similarly, out of the 31 SCBs, four
were not compliant with Section 11 (1) of the BR Act,
1949 (AACS) in regard to minimum capital
requirement. As on 31 March 2012, out of 82 RRBs,
75 complied with Section 42(6) (a) (i) of the RBI Act,
1934 and 59 complied with Section 42(6)(a)(ii) of the
Act, ibid.
B. Policy Decisions
4.51 During the year a number of instructions
involving policy matters were issued to the SCBs,
CCBs and RRBs. A few important among them are
indicated below:
For strengthening the RiskManagement Systems in thesupervised entities,NABARD has partneredwith GIZ for implementationof RFIP Programme underwhich pilot implementationof Risk Management Tools isin progress.
91
Computerisation of OSS
New Software developed byNABARD under the OSS hasbeen forwarded to all thesupervised entities forsubmission of revised returns.
Towards improving the Risk
Management Skills of supervised
entities, NABARD has taken
up the task of preparation of
“Risk Management Manual” for
Co-operative Banks and RRBs.
a. SCBs/CCBs
4.52 SCBs and CCBs were advised (i) about the
modus operandi of an attempted fraud in a bank to
enable them to take necessary precautions, (ii) to
follow the best practices to further strengthen the
internal checks and control systems in the banks as
brought out in the seminars, (iii) to review the IT
system afresh and incorporate proper control measures
for preventing frauds in the computerized
environment, (iv) to submit revised returns under Off-
site Surveillance System, (v) to review the financial
statements of borrowers diligently for strengthening the
credit assessment/monitoring framework of the banks,
(vi) about the reduction in the time limit for
submission of compliance on inspection reports from
90 days to 60 days (vii) initiate necessary action to
ensure that whenever payments are made or received,
the same are done electronically, (viii) Revised
Guidelines on Monitoring of Frauds and Reporting
System and (ix) Operational Guidelines on Off-site
Surveillance System (OSS) & submission of Revised
Returns under OSS.
b. RRBs
4.53 During the year under review, instructions
were issued to RRBs on the following:
(i) Modus operandi of an attempted fraud was brought
to the notice of all RRBs, (ii) to follow the best
practices to further strengthen internal checks and
control systems as brought out in seminars, (iii) to
review the IT system afresh and incorporate proper
control measures for preventing frauds in the
computerised environment, (iv) submission of revised
returns under Off-site Surveillance System, (v) review
the financial statements
of borrowers diligently
for strengthening the
credit assessment/
monitoring framework of
the banks, (vi) initiate
necessary action to ensure that whenever payments
are made or received, the same are done
electronically, (vii) Revised Guidelines on Monitoring
of Frauds and Reporting System, (viii) Operational
Guidelines on Off-site Surveillance System (OSS) &
submission of Revised Returns under OSS and (ix)
Operational Guidelines for conduct of Concurrent
Audit in RRBs.
C. Supervisory Interventions andother initiatives:
4.54 (i) Revised Software developed by NABARD,
in collaboration with the Tata Consultancy Services,
for submission and processing of Off-Site Surveillance
System Returns has been introduced from December
2011, (ii) in order to improve the quality and
effectiveness of the statutory audit in Co-operative
Banks, besides a Seminar at National Level, 13
Workshops for Statutory Auditors were conducted at
the State Level, (iii) Regional Offices of NABARD &
Training Establishments had conducted sensitisation
workshops on KYC (Know Your Customer) /AML (Anti-
Money Laundering), Credit Monitoring Arrangement
(CMA), Frauds, Investments, Internal Checks &
Controls, Corporate Governance, Investment
Management, Asset Liability Management (ALM) etc.
for supervised entities, (iv) training programmes were
also arranged for Inspecting Officers of NABARD at
IDRBT, Hyderabad & the Punjab National Bank
Institute of Information Technology (PNBIIT),
Lucknow, to better equip NABARD’s Inspecting
Officers to conduct inspection in Computerised
Environment and under the Core Banking Solutions,
(v) a training programme on Risk Based Supervision
was also arranged
for the Inspecting
Officers of
NABARD in
Reserve Bank
Staff College,
Chennai, in July
92
2011, (vi) during the year, NABARD conducted 3
Regional Supervision Seminars for its inspecting
officers to discuss various issues involved in the
inspection of banks, (vii) NABARD HO in association
with the Financial Intelligence Unit-India (FIU-IND),
Government of India had also conducted two
workshops-cum-review meets of supervised banks to
review and sensitise the Principal Officers regarding
implementation of KYC/AML and (viii) with a view to
improving the Risk Management skills in supervised
banks, NABARD had taken up the task of preparation
of ‘Risk Management Manual’ separately for Co-
operative banks and RRBs.
4.55 For a holistic and more effective approach
towards supervision, NABARD continued to forge
partnerships with other related agencies, especially in
strengthening the Risk Management Systems in the
supervised banks under the GIZ - RFIP programme
and Institute of Chartered Accountants of India (ICAI)
for preparation of Audit Manual.
93
NABARD has been entrusted with the responsibility of
handling diverse functions ranging from refinance, credit
planning, institutional development and supervision of
client banks. Human resource development and
organisation management is crucial to deliver on these
multi-dimensional tasks efficiently. NABARD has
undertaken several initiatives in recent years to improve
Organisation, Corporate Governance and Management
transparency, governance and efficiency. Introduction of
Human Resources Management System (HRMS),
e-payments, recruitment, training of staff, schemes for
higher studies and incentive schemes for attaining
professional qualifications by the staff are some of these
initiatives. Some departments of NABARD were
reorganised with a view to harnessing greater synergies.
Management
A. Board of Directors
5.2 The Board of Directors met seven times
during the year, while the Executive Committee and
the Sanctioning Committee for loans under RIDF, met
once and nine times respectively.
5.3 The following changes took place in the
composition of the Board during the year:
(a) Dr. Prakash Bakshi assumed charge as Chairman,
NABARD with effect from 02 June 2011 vice Shri
Rakesh Singh, Additional Secretary (FS),
Department of Financial Services, Ministry of
Finance, Government of India who demitted
office on 01 June 2011.
(b) Shri H R Khan, Deputy Governor, RBI and Shri
Dipankar Gupta were appointed as Directors on
the Board with effect from 19 August and 30
November 2011 vice Dr. K C Chakrabarty,
Deputy Governor, RBI and Shri Lakshmi Chand
respectively.
Smt. Shashi Rekha Rajagopalan, Director passed
away during the year.
(c) Shri Umesh Kumar, Joint Secretary (BA),
Department of Financial Services, Ministry of
Finance, Government of India was appointed
Director on the Board with effect from 15
November 2011 vice Shri Alok Nigam.
(d) Shri Jainti Kumar Batish, Prof. Trilochan Sastry
and Prof. M L Sharma were appointed as
Directors on the Board with effect from 16 May,
12 October and 19 December 2011 respectively.
(e) Shri D B Gupta, Principal Secretary, Ministry of
Agriculture, Government of Rajasthan was
appointed as Director with effect from 01 August
2011 vice Shri R K Meena.
(f) Shri Shaleen Kabra, Commissioner/ Secretary,
Agriculture Production Department (APD),
Government of Jammu & Kashmir was appointed
as Director with effect from 24 February 2012
vice Shri Navin Kumar Choudhary. Shri
Choudhary was appointed as Director with effect
from 16 December 2011, vice Shri Mohd. Iqbal
Khandey and was on the Board of NABARD only
for a brief period.
(g) Shri S Vijay Kumar, Secretary, Ministry of Rural
Development, Government of India was
appointed Director on the Board with effect from
01 February 2012 vice Shri B K Sinha.
B. Senior Management
5.4 Management Committee, an important
governance structure continued to meet regularly
during the year. Chaired by the Chairman, the
Committee deliberated on important issues having inter
departmental or larger policy ramifications. Executive
V
94
Director (ED) and concerned Chief General Managers
participated in the deliberations. Meetings of the Top
Management Team comprising of Chairman, EDs and
all CGMs was another forum which met regularly to
discuss key issues and strategic interventions.
C. Right to Information Act (RTI), 2005
5.5 As part of its goal of achieving transparency
and complying with statutory obligations, NABARD
has been providing necessary information under the
RTI Act. The Chief General Managers of Regional
Offices have been designated as Central Public
Information Officers (CPIOs), with Shri V Ramakrishna
Rao, Executive Director as the Appellate Authority and
Shri S K Mitra, Executive Director as the Transparency
Officer for the Bank. During the period ended 31
March 2012, 744 applications and 101 appeals were
received and information provided. Twenty hearings
on appeals made to Central Information Commission
were attended to. Workshops were conducted on Right
to Information Act, 2005 through Video Conferencing
for selected Regional Offices at HO and one for core
HO departments. The third workshop for Rajasthan
RO was held at Jaipur.
Human Resources Management
A. Human resource developmentinitiatives
a. Training/deputation/higher studies/distance learning
5.6 During the year, 103 programmes were
conducted by NBSC Lucknow covering 2,232 officers
(2,049 from NABARD and 103 officials from RFIs)
covering training on Watershed Development, TDF,
Microcredit, HRMS, Financial Inclusion, Appraisal and
monitoring of Infrastructural projects etc. Out of 2,232
officers, 1,704 and 528 officers were trained in
In-house and On-location programmes, respectively.
Major training programmes conducted were: International
programme on Financial Inclusion, SHG-Bank linkage
advanced training programme, etc. Customised
Programmes on Faculty Development for 25 faculty
Members from various training establishments of
NABARD was conducted at IIM, Lucknow. In addition,
25 officers were deputed for a customised training
programme on “Advances in Citriculture” at National
Research Centre on Citriculture, Nagpur. Besides, 212
officers were deputed for 101 Off-the-Shelf
Programmes, workshops, seminars and conferences
organised by various institutions of repute in India.
The major areas covered in these programmes were
strategic HRM, information systems audit, risk
management, treasury management, women
empowerment, negotiation skills, ground water
recharge etc. During 2011-12, National Bank Training
Centre (NBTC), Lucknow and Zonal Training Centre
(ZTC), Hyderabad conducted 74 training programmes
for 976 Group ‘B’ and ‘C’ staff. The Colleges also
conducted pre-promotion training programmes for
Group ‘B’ staff for promotion to higher grade in the
officers cadre. One programme each conducted by
NBTC, ZTC and HO, Mumbai covering 31 ST/SC
Group B staff. One pre-recruitment training
programme was conducted at IES, Bandra covering 84
SC/ST participants. Further, a consultancy assignment
on Training Needs Assessment study of Haryana State
Co-operative Bank was completed by NBSC Lucknow.
5.7 During the year, 20 staff members availed of
the facility of the Incentive Scheme for staff members
to pursue professional studies. Various courses being
pursued by employees were CFA, CS and MBA from
reputed institutions viz. C F Institute of USA and
Institute of Company Secretaries of India, Sikkim
Manipal University, etc. During the year, 177 officers
completed the e-learning programme, “Harvard
Mentor 10” in collaboration with Harvard Business
School, USA. This programme aimed at building
capabilities in wide ranging areas such as change
management and leadership time management
95
b. Overseas Training / Visits by TopManagement
5.8 During the year, 54 officers from NABARD
and 10 officers from client banks were deputed for
various overseas training programmes, exposure
visits, seminars, meetings, etc. BIRD, Mangalore
conducted a customised exposure visit on micro-Finance
to SANASA Development Bank, Colombo, Sri Lanka,
wherein 5 officials each from NABARD, RRBs and
DCCBs from priority states were included. A team
of 05 officers was deputed to participate in 3rd
International Co operative Dialogue conducted by
Academy of German Co operative at Montabaur,
Germany. Further, two teams of six officers each were
deputed for a training programme on Enterprise Risk
Management conducted by AIM, Manila. Other
officers were deputed for exposure visits to different
countries, viz. Philippines, China, USA, Germany,
Spain, Netherlands, Sri Lanka, Thailand, Malaysia,
Iran, etc. Dr. Prakash Bakshi, Chairman led a team to
“2011 Global Microcredit Summit at Valladolid, Spain.
Further, he attended Mini Consultation Meet conducted
by APRACA in Bangkok on finalisation of project report
on Fin Power Programme for seeking grant assistance
from IFAD. Shri Amaresh Kumar, ex-Executive Director
participated in Financial Inclusion Policy Makers
Forum held at Kuala Lumpur, Malaysia. Shri
S.K.Mitra, Executive Director attended the 60th
EXCOM Meeting of APRACA held at Tehran, Iran.
B. Promotion and Staff Strength
a. Promotion
5.9 A total of 392 promotions were effected
during the year. This included 17 employees in Group
‘B’ promoted to Group ‘A’ under the Special drive of
promotion for SC/ST employees conducted to fill the
backlog. Details of promotions effected grade/
group-wise are given in the Table 5.1.
b. Staff Strength
5.10 The total staff strength of the Bank as on 31
March 2012 stood at 4552, of which, 836 belong to
Scheduled Castes (18.36%) and 397 to Scheduled
Table 5.1: Promotions effected during the year
Particulars Total Of which
SC ST
Officers from Grade ‘E to ‘F’ 33 2 0
Officers from Grade ‘D’ to ‘E’ 51 4 0
Officers from Grade ‘C to ‘D’ 103 5 2
Officers from Grade ‘B’ to ‘C’ 83 10 6
Officers from Grade ‘A’ to ‘B’ 7 1 0
Group ‘B’ to officers’ cadre 115 20 16
Total 392 42 24
Tribes (8.72%) (Table 5.2). The staff strength of
ex-servicemen and physically handicapped employees
stood at 80 and 88, constituting respectively, 1.7 per
cent and 1.9 per cent of the total staff strength.
5.11 With a view to ensuring optimum utilisation of
the qualified, experienced and relatively younger staff
in Group ‘B’ cadre, an opportunity to take up
promotion to officer cadre, was offered under the
“Special Non-Transferability Scheme” (SNTS). Under
the scheme, Group ‘B’ staff opting for promotion can
seek posting to their centre of choice on a long term
basis and 273 eligible officers opted for the scheme.
c. Special drive for promoting SC/ST staff
5.12 In order to fill the vacancies reserved in
Group ‘A’ cadre, an exclusive Special drive for SC and
ST staff was conducted and 17 Group ‘B’ staff were
promoted as officers in Grade ‘A’.
d. PAR System
5.13 With a view to making the assessment of
performance of officers more objective, an In-house
Committee was set up under the Chairmanship of
Table 5.2: Total Staff Strength
Cadre Total Of which
SC ST
Group ‘A’ 2842 431 226
Group ‘B’ 868 104 69
Group ‘C’ 842 301 102
Total 4552 836 397
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Shri S K Mitra, ED, HRMD to examine the existing
Performance Appraisal parameters, Ratings, Formats,
etc. and to suggest modifications thereof. Based on the
recommendations of the Committee, new PAR formats
have been introduced for the year ending
31 March 2012.
Administrative and Other Matters
A. Industrial Relations
5.14 Industrial relations in the Bank continued to
be harmonious during the year. Periodic discussions
were held between the Management and the All India
National Bank Officers’ Association and the All India
NABARD Employees’ Association.
B. Transparency/ConsultativeApproach
i. Grievances Redressal System
5.15 Five meetings of the Grievances Redressal
Committee and three meetings of the Appellate
Committee were held during the year. Twenty one
grievances and six appeals were received, of which 19
grievances and 6 appeals were processed.
ii. Joint Consultation Scheme for Officers
5.16 The Joint Consultative Committee (JCC)
comprising representatives from Bank Management
and National Bank Officers’ Association, met during
the year to discuss HR issues.
C. Other Welfare Measures for theStaff
5.17 The fifteenth Annual Sports and Cultural
Festival of the Bank, NABOTSAV was held at Jaipur
between 18-22 December 2011.
D. Other Developments
5.18 The Central Complaints Committee for
prevention of sexual harassment of women at
workplace in HO and Committees in RO continued to
function effectively. The Central Complaints
Committee met 4 times during the year.
E. Seminar on Administrative Issues
5.19 Two seminars on Administrative Matters,
including one for Senior Officers at Head Office were
organised during the year. 100 Officers from Head
Office and various ROs/TEs have been covered in
the seminars. The main objective of the seminars was
for sensitising officers for effective handling of
administrative issues, as also disciplinary and
RTI cases.
F. Committee for revision in variousfacilities/amenities to DDMs
5.20 A Committee comprising GM (HRMD) and
GM (CPD) set up to review and recommend the
facilities/amenities for DDMs and to assess the
workload of DDMs submitted its report. The
recommendations made by the Committee were
considered for policy decisions and necessary
instructions were issued.
G. Welfare Measures for SC/STemployee
5.21 The Bank continued to adhere to the
instructions issued by GoI regarding reservations for
SC/ST employees in recruitment and promotions.
Quarterly meetings of the Senior Executives and
Chief Liaison Officer with the representatives of the
Welfare Association of SC/ST employees were held at
HO and ROs. Two pre-promotion training
programmes for 31 SC/ST staff members were
conducted at training centres. Other benefits
extended to SC/ST employee included grant of
scholarship to 13 wards of SC/ST employees and
providing compassionate appointment to the
dependants of 05 deceased employees.
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H. IT roadmap implementation inNABARD
5.22 The following Information Technology related
developments have taken place during the
year 2011-12:
a. Video Conferencing facility:
5.23 For the whole year, the Video Conferencing
(VC) facility was utilised very effectively by all the
functional departments as per needs. The VC facility,
definitely helped in increasing the staff productivity by
enabling sharing of all information/data dynamically. It
helped in decision making process, by obtaining
responses from ROs/TEs quickly. Obviously, it has
proved a big money and time saver for the Bank apart
from saving the travel time and other hassles related
with tour and travel. So far 980 conferences/seminars /
workshops/training sessions and 1696 interviews have
used VC facility. During the year 690 Conferences/
Seminars/Workshops/Training sessions and 246
Interviews made use of the VC facilities. Some of the
important communications facilitated by VC facility are
the following:
• Dissemination of important policy decisions to
ROs/TEs by top management
• Chairman’s interaction with the Finance
Secretary, Department of Financial Services,
Government of India, in New Delhi
• Performance Review of ROs by Chairman.
• In-house trainings like Trainers training on VC,
training on Disaster Management, Application
Tracker System (ATS).
• Internal Promotional Interviews – All promotional
interviews from Group ‘B’ to Grade ‘A’, Grade ‘A’
to ‘B’, Grade ‘B’ to ‘C’, Grade ‘C’ to ‘D’, Grade
‘D’ to ‘E’, and Grade ‘E’ to ‘F’ were conducted
through VC.
b. Centralised IT application systems:
5.24 Bank has taken steps in implementing IT
systems as per IT roadmap. In continuation with the
Bank’s efforts in this direction, in the financial year
2011-12, implementation of Human Resources
Management System (HRMS) and Centralised Loan
Accounting & Management System (CLMAS) was
initiated after due system studies done in previous
financial year.
c. Strengthening of IT infrastructure:
5.25 The need for a strong Data Centre and
Disaster Recovery System (DRS) emerged with the
migration to centralised HRMS and CLMAS. After
examining various alternatives, Bank decided to
upgrade its existing Data Centre to state-of-the-art
technology driven Data Centre at HO. After successful
commissioning of Data Centre, DRS, will be set up in
Mumbai.
d. Improvements in computer networkenvironment:
5.26 During the year, the computer network in the
Bank’s Head Office has been revamped through the
procurement of latest network switches. For the
purpose, Bank had successfully carried out the process
of “e-reverse bidding” for the very first time. The
e-reverse bidding process resulted in ensuring a more
competitive, speedy and transparent bidding process.
e. Wide Area Network:
5.27 In order to provide uniform access to
computer applications, across the Bank, like e-mail,
Intranet, HRMS, CLMAS etc., better management of
these applications, improved IT security and
centralised control over IT systems, the Bank has
decided to implement the Wide Area Network (WAN)
using its existing secured MPLS backbone. The MPLS
network has been moulded in such a way so as to
integrate existing LANs at ROs with HO LAN, hence
making it WAN of the Bank. It is also proposed to
provide the Internet services to all ROs/Training
Establishments centrally from HO. The
operationalisation of WAN will also reduce significant
expenditure incurred by the Bank in decentralised IT
application environment.
98
f. Capacity building:
5.28 The IT personnel of the Bank were trained
with the latest system application, software, databases
etc. This capacity building would help them to
understand the scope of centralised IT systems and
address the issues effectively as and when the need
arises.
I. Offices Premises / ResidentialQuarters
5.29 The project for the construction of RO
building and residential quarters at Port Blair has been
completed and the same occupied in May 2011. The
work relating to construction of office premises at
Bengaluru, Jammu, Itanagar and RTC Complex at
Mangalore is in progress. The acquisition of residential
quarters at Raipur and Ranchi is at an advanced stage.
The process of purchase of plots for construction of
office building / residential quarters at Chhattisgarh,
Uttarakhand and Sikkim has been completed.
Purchase of plot for construction of office building/
residential quarters at Agartala, Shillong and Patna is
underway. The premises for both office and staff
quarters’ at Chandigarh is expected to reach
construction phase during 2012-13. Structural Audit of
NABARD properties at Mumbai has been taken up so
that necessary repairs and maintenance of these
buildings can be initiated during 2012-13.
J. Vigilance
5.30 Central Vigilance Cell, Head Office conducts
Preventive Vigilance Inspections (PVI) of Regional
Offices/Training Establishments once in two years, to
check that these systems are in place. Three PVIs
have been conducted during the year. The Bank
observed ‘Vigilance Awareness Week’ from
31 October to 5 November 2011 at Head Office and
all Regional Offices/ Training Establishments to create
awareness about vigilance among the staff. The
theme for the year was “Participative Vigilance”.
Vigilance oath was administered to all the employees
and eminent personalities invited to deliberate on the
occasion by the Bank. CVC, HO actively participated
in the meetings of ‘Vigilance Study Circle’, Mumbai
Chapter.
K. Inspections and Concurrent Audits
5.31 In keeping with the principles of corporate
governance, the Inspection Department (ID) continued
to perform its role to ensure transparency in the
decision making process of the bank and
accountability of staff on adherence to set rules and
guidelines. During the year, the Audit Committee of
the Board (ACB) met four times, while the Risk
Management Committee of the Board (RMCB) met
thrice. The ACB reviewed the internal inspection/audit
function in the institution - the system, its quality and
effectiveness with focus on the follow-up of major
areas of concern in housekeeping. The Committee
followed up on all the issues raised in the Statutory
Auditor’s report, inspection reports of RBI, etc., and
interacted with the external auditors before the
finalisation of the annual financial accounts and
report. The RMCB reviewed the Credit Risk
Management, Asset and Liability Management,
Operational Risk Management and other risks areas of
the bank and guided in formulating the policy and
strategy for integrated risk management. ID continued
to monitor defaults by client institutions and apprise
the Top Management of the status and follow-up
action initiated for recovery of default, on a fortnightly
basis. During the year, ID conducted Inspection of 09
ROs and 18 HODs. The concurrent audit at HO
continued to be outsourced to external auditors, while
the Concurrent Audit of all ROs/TEs were undertaken
by the internal Concurrent Audit Cells (CAC) set up
in the respective RO/TEs. The Department also
inspected NABARD Subsidiaries, viz., Agri Business
Finance Ltd, Hyderabad, Agri Development Finance
Ltd, Chennai, NABARD Financial Services, Bengaluru
and NABCONS, Mumbai. The working of the
subsidiaries revealed their sound financial health. The
synopses of Inspection Reports containing major
areas of concern were placed before the ACB for
deliberation and guidance.
99
L. Visits of Parliamentary Committees
5.32 During the year, the following Parliamentary
Committees have visited NABARD:
i. Study visit by the Parliamentary Committee
on Subordinate Legislation to Mumbai,
Chandigarh and Shimla from 13 to 18 June
2011
The Parliamentary Committee on Subordinate
Legislation had discussions with the
representatives of the Employees’ Union/
Association of NABARD, followed by discussion
with the officials of NABARD, Mumbai on the
Rules/Regulations framed under the relevant
Act.
ii. Visit of the Committee on Subordinate
Legislation, Rajya Sabha to Bengaluru,
Cochin & Munnar from 19th to 25th June,
2011
The Committee on Subordinate Legislation,
Rajya Sabha had discussions with the
representatives of Employees’ Association/Unions
of RRBs, Sponsor Banks, along with
representatives of Ministry of Finance
(Department of Financial Services) and NABARD
on (i) Regional Rural Banks (Appointment and
Promotion of Officers) Rules, 2010 along with
current status of Priority Sector lending
(ii) Reverse Mortgage Scheme and (iii) Social
Sector Schemes.
iii. Visit of the Committee on Government
Assurances, Rajya Sabha to Leh and
Srinagar from 22 to 27 June 2011
The Committee on Government Assurances,
Rajya Sabha had discussions in connection with
fulfillment of the assurances given in Rajya Sabha
to (i) USQ No. 2053 dated 08.12.2009 regarding
appointment on compassionate ground in RRBs
and (ii) USQ No. 2054 dated 15.03.2011
regarding direct loans to needy.
iv. Visit of the Committee on Government
Assurances, Rajya Sabha to Amritsar,
Chandigarh and Shimla from 16 to
22 September 2011
The Committee on Government Assurances,
Rajya Sabha had discussions with regard to
fulfillment of the assurances given in Rajya Sabha
to (i) USQ No. 1452 dated 23.11.2010 regarding
Agriculture Debt Waiver (ii) USQ No.2054 dated
15.03.2011 regarding provision of direct loans to
the needy and (iii) SQ No.277 dated 15.03.2011
regarding fraudulent practices adopted by MFIs.
v. Study visit by the Parliamentary Committee
on Subordinate Legislation, Rajya Sabha to
Mumbai and Goa from 25 September to
01 October 2011
The Committee on Subordinate Legislation,
Rajya Sabha had discussions with the
representatives of the Employees’ Union/
Association of RRBs in Gujarat & Maharashtra
followed by discussions with the officials of RRBs,
Sponsor Bank and Private Sector Banks along
with representatives of Ministry of Finance
(Department of Financial Services) and NABARD
on (i) Regional Rural Banks (Appointment and
Promotion of Officers) Rules, 2010 and
(ii) current status of Priority Sector Lending
advances with special reference to micro-credit to
farmers.
vi. Meeting of the Draft & Evidence
Sub-Committee of Committee of Parliament
on Official Language with member offices of
Jaipur Nagar Rajbhasha Implementation
Committee on 29 September 2011 at
Jaipur
The Committee had discussions on “Progressive
use of Official Language”.
vii. Inspection/Tour Programme of the Third
Sub-Committee of Committee of Parliament
on Official Language for the Central
100
Government offices located in Delhi,
Guwahati, Kohima, Dimapur & Imphal from
28 October to 05 November 2011
The Committee had discussions on “Progressive
use of Official Language”.
viii. Visit of the Committee on Subordinate
Legislation, Rajya Sabha to Kolkata, Port
Blair & Chennai from 23 to 29 February
2012 :
The Committee discussed the following issues
with representatives of various Commercial
Banks, RRBs, Insurance Companies, RBI, IRDA
and NABARD:
• RRBs (Appointment and promotion of officers
and employees) Rules, 2010
• Insurance Surveyors and Loss Assessors
(Licensing, professional requirements and
code of conduct) Regulations, 2000
• Implementation of 183rd report of the
committee on the Banking Ombudsman
Scheme, 2006
• Current status of priority sector lending and
• Complaint redressal mechanism for customers
and employees of banks.
ix. Study visit of the Parliamentary Committee
on Agriculture to Ranchi, Patna, Bhopal,
Yavatmal & Nagpur from 27 February 2012
to 2 March 2012 :
The Committee visited Moregaon village in
Yavatmal district of Maharashtra state and
interacted with the villagers on the reasons for
suicides by farmers, rehabilitation works, access
to bank credit, availability of agricultural inputs,
crop insurance and implementation of various
programmes at State and Central Governments.
M. Promotion of Hindi
5.33 Implementation of Official Language Policy of
GoI was monitored by Official Language
Implementation Committees constituted in all offices,
including HO through their quarterly meetings.
Further, monitoring was also done at HO level through
quarterly progress reports received from ROs/TEs.
Financial Services Department, Ministry of Finance,
GoI carried out Rajbhasha inspection of our HO on 08
November 2011. As a part of its efforts towards
capacity building of staff in order to enable them to
use Hindi in their day-to-day official work, 92
workshops were conducted across the offices in which
843 staff members were trained. Further, training was
imparted on use of APS Saral, Unicode-compliant
version of our Official Language Software in the
aforesaid workshops.
5.34 Six articles of officers of NABARD were
published in the book titled “Vittiya Samaveshan aur
Vittiya Saksherta” (Financial Inclusion and Financial
Literacy) published by CAB, RBI, Pune and which
were selected for the national level seminar organised
by NABARD under the aegis of Coordination
Committee on Training in Hindi. In addition, in-house
publication ‘Rashtriya Bank Srijana’ bagged two silver
trophies from Association of Business Communicators
of India (ABCI). To encourage the officers to prepare
PLP and Inspection Reports in Hindi, a Special Cash
Award Scheme was also introduced.
101
Financial Performance & Management of Resources
NABARD has put in place a sound resource
management system. The management of funds by
the Bank and its financial performance during the
year are detailed in this chapter.
6.2 The financial resources of NABARD (Table
6.1) increased from `1,58,872 crore as on 31
March 2011 to `1,82,075 crore as on 31 March
2012, registering an increase of 14.60 per cent over
the previous period. The funds deployed for
investment operations (including rural infrastructure
development & warehousing) and for production and
marketing activities (including conversion) increased
by `9,723 crore and `14,390 crore, respectively as
on 31 March 2012. The total market borrowing
which stood at `43,203 crore, as on 31 March
2012, constituted 23.73 percentage of the total
resources of the bank.
Sources of Funds
A. Capital, Reserves & Surplus
6.3 The paid up capital, as on 31 March 2012
was `3,000 crore against the authorised capital of
`5,000 crore, with the share of GoI being at 99.33
per cent and that of RBI at 0.67 per cent.
Government of India contributed `1,000 crore to
NABARD’s paid up capital during the year. The
amount of reserves and surplus increased by `2,545
crore, as on 31 March 2012.
B. NRC (LTO) & NRC (Stabilisation)Funds
6.4 The National Rural Credit (Long Term
Operations) and the National Rural Credit
VI
Table 6.1: Sources of Funds(As on 31 March 2012)
(` crore)
Particulars 31.03.2011 31.03.2012
Amount Share (%) Amount Share (%)
Capital, Reserves & Surplus 13,863 8.7 16,408 9.0
NRC (LTO) and NRC (Stabilisaton) Funds 16,045 10.1 16,058 8.8
STCRC Fund 14,622 9.2 20,000 11.0
Deposits 277 0.2 291 0.2
RIDF Deposits 67,878 42.7 75,107 41.3
Bonds & Debentures 26,788 16.9 38,584 21.2
Certificate of deposits 137 0.1 1,281 0.7
Term Money Borrowings 110 0.1 182 0.1
Commercial Paper 6,448 4.0 2,245 1.2
Borrowings from GoI 124 0.1 85 0
Foreign Currency Loan 503 0.3 503 0.3
Borrowings against STDs 360 0.2 0 0.0
Borrowings under JNN Solar Mission Programme 0 0 33 0
Other Liabilities/Funds 11,717 7.4 11,298 6.2
Total 158,872 100.0 182,075 100.0
102
(Stabilisation) Funds are utilised for investment
operations and for conversion/ reschedulement of
short-term credit, respectively. These Funds are
augmented by internal accruals and contributions
made by RBI. During the year, an amount of `13
crore was contributed to these Funds.
C. STCRC Fund
6.5 With a view to augmenting NABARD’s
resources for ST credit facilities to Co-operative
Institutions, the Short Term Co-operative Rural
Credit (Refinance) Fund (STCRC Fund) was set up in
2008-09, with contributions by scheduled commercial
banks not achieving their priority sector obligations.
From an initial corpus of `4,622 crore, it was
augmented with an additional allocation of `5,000
crore each for 2009-10 and 2010-11 and `10,000
crore for the year 2011-12. An amount of `4,622
crore was repaid during the year. The outstanding
balance under the STCRC Fund as on 31 March
2012 stood at `20,000 crore.
D. Deposits
i. Term Deposits
6.6 The amount of term deposits and the
deposits received from tea, coffee and rubber
companies aggregated `291 crore as on 31 March
2012, as against `277 crore at the end of the 31
March 2011, reflecting an increase of `14 crore,
during the current year.
ii RIDF Deposits
6.7 During the year, RIDF Deposits from
commercial banks under RIDF XII to XVII, RIDF
XVII Warehousing and Bharat Nirman(BN) XIII
mobilised aggregated to `15,241 crore, with
repayments being `8,012 crore under RIDF VI to
XIV and BN XII & XIII. As on 31 March 2012,
aggregate outstanding of RIDF deposits stood at
`75,107 crore, as against `67,878 crore at the end
of March 2011, resulting in a net inflow of `7,229
crore, an increase of 10.65 per cent over the
deposits held as on 31 March, 2011.
E. Borrowings
i. Capital Gains Bonds
6.8 Capital Gains Bonds aggregating `0.76 crore
were redeemed during the year 2011-12 and the
outstanding stood at `7 crore as on 31 March
2012.
ii. Corporate Bonds
6.9 Corporate Bonds amounting to `17,914
crore were issued during the year while `6,019 crore
were redeemed. The amount outstanding at the end
of the March 2012 stood at `33,578 crore as against
`21,682 crore as on 31 March 2011.
iii. Statutory Liquidity Ratio (SLR) Bonds
6.10 The entire outstanding of `99 crore under
SLR Bonds was redeemed during the year and there
was no outstanding as on 31 March 2012.
iv. Bhavishya Nirman Bonds (BNB)
6.11 No fresh bonds were issued during the year.
The outstanding under BNB stood at `4,975 crore
as on 31 March 2012.
v. NABARD Rural Bonds
6.12 No fresh bonds were issued during the year.
The outstanding at the end of 31 March 2012 stood
at `24 crore.
vi. Certificates of Deposits (CD)
6.13 Fresh borrowings through issue of Certificates
of deposits of `1,281 crores were mobilised and
`137 crore were redeemed during the year. The
balance outstanding against CDs issued was `1,281
crore as on 31 March 2012.
103
vii. Commercial Paper (CP)
6.14 Commercial papers amounting to `7,308
crore were issued and `11,511 crore were repaid
during the current year. The CPs outstanding as on
31 March 2012 stood at `2,245 crore as against
`6,448 crore as on 31 March 2011.
viii. Term Money Borrowings (TMB)
6.15 Term Money Borrowings (TMB) of three to
six months’ tenor were resorted in order to meet the
short-term requirements. TMB worth `438 crore were
raised and repayments to the tune of `366 crore
made, leaving an outstanding of `182 crore as on
31 March 2012, compared to the outstanding at
`110 crore as on 31 March 2011.
ix. GoI Borrowings
6.16 There were no fresh borrowings from
Government of India during the year 2011-12,
whereas repayment of `39 crore was made on
maturity of loans drawn under various externally
aided projects. The outstanding balance in respect of
borrowing made from GoI stood at `85 crore as on
31 March 2012, as against `124 crore, as on 31
March 2011.
x. Borrowings in Foreign Currency
6.17 An amount of `41 crore was repaid under
this segment during the year and a sum of `41
crore was drawn under KfW (UPNRM) which resulted
in maintaining the balance under the borrowings in
foreign currency from KfW, Germany, at `503 crore,
as on 31 March 2012. The foreign exchange risk on
forex borrowings as well as interest payments, have
been hedged at an average cost of 1.79 per cent
p.a. for 10 years.
xi. Borrowings against Short term Deposits
(STD)
6.18 The entire amount of borrowing made
against STD at `360 crore was repaid during the
current year. As such no amount was outstanding
under this head as on 31 March 2012.
Uses of Funds
F. ST Loans, MT (Conversion) Loans
6.19 The ST (SAO) loans outstanding against
advances to the SCBs at `33,682 crore, RRBs at
`13,764 crore and Commercial banks for financing
PACS at `79 crore together with ST (OSAO) loans
to SCBs at `311 crore and RRBs at `502 crore had
resulted in increased loans outstanding for
production and marketing credit at `48,338 crore as
on 31 March 2012, compared to the loan
outstanding at `33,885 crore in the corresponding
period last year. There has been an increase of
42.65 per cent in the outstanding of credit under
this segment. Outstanding balance under MT
conversion loan stood `129 crore as on 31 March
2012 (Table 6.2).
G. Project Loans under RIDF
6.20 Loans provided to State Governments for
implementation of rural infrastructure development
stood at `70,860 crore as on 31 March 2012
compared to outstanding at `66,078 crore as on 31
March 2011, recording a net outflow of `4,782 crore
during the year.
H. Non-Project Loans
6.21 The outstanding in respect of long-term
(LT) loans granted to State Governments for
contributing to the share capital of co-operative
credit institutions, stood at `140 crore as on 31
March 2012 compared to `167 crore as on 31
March 2011.
104
I. Investment Credit
6.22 Refinance assistance of `43,107 crore was
extended to banks in respect of the medium and
long term investment loans provided by them as as
on 31 March 2012 as against the assistance at
`38,896 crore provided at the end of 31 March
2011. During the year, refinance provided, by
NABARD for investment credit activities increased
by 10.82 per cent.
J. Co-finance
6.23 The Bank has entered into agreements with
commercial banks to co-finance various projects. The
outstanding balance as on 31 March 2012 stood at
`72 crore (net of provision), as against `88 crore
(net of provision) at the end of previous year.
K. NIDA
6.24 NIDA, a new line of credit was made
available during the current year for rural
infrastructure investment to state-owned institutions,
with sustained income streams which can repay the
loan directly to NABARD, without depending upon
budgetary resources of the State Governments.
Assistance is provided based on viability of the
borrowing entity and its financial condition, including
track record of execution of works and delivery of
services related to the specific investment being
financed. The outstanding loans under the segment
stood at `423 crore as on 31 March 2012.
Table 6.2: Uses of Funds(As on 31 March 2012)
(` crore)
Particulars 31.03.2011 31.03.2012
Amount Share (%) Amount Share (%)
Cash and Bank Balance 10537 6.6 8313 4.6
Government Securities and other Investments 5868 3.7 5867 3.2
CBLO 228 0.1 231 0.1
Production and Marketing Credit 33885 21.3 48338 26.6
Conversion of Production Credit into MT Loans 193 0.1 129 0.1
MT & LT Project Loans * 38896 24.5 43107 23.7
LT Non Project Loans 167 0.1 140 0.1
Loans out of RIDF 66078 41.7 70860 38.9
Co Finance Loans(net of provision) 88 0.1 72 0.0
NIDA Loan 0 0 423 0.2
Direct Refinance to DCCBs 0 0 910 0.5
RIDF- Warehousing infrastructure 0 0 759 0.4
Other Loans 182 0.1 231 0.1
Fixed Assets & Other Assets 2750 1.7 2695 1.5
Total 158872 100.0 182075 100.0
(* Including the amount subscribed to Special Development Debentures of SCARDBs which are in the nature of Deemed Advances.)
105
L. Direct lending to CCBs
6.25 A Short-term multipurpose credit product
designed for direct lending to DCCBs for meeting the
working capital and farm asset maintenance needs
of the individual borrowers and affiliated PACS has
been launched, on a pilot basis. The quantum of
outstanding under this line of credit stood at `910
crore as on 31 March 2012.
M. RIDF – Warehousing Infrastructure
6.26 Government of India has accorded top
priority for creation of quality warehouse facilities
in the country for reducing the inefficiencies in post
harvest management. Financial assistance is
available under this scheme to State Government,
agencies owned/ supported by Central/ State
Government, Cooperatives etc. All RRBs / DCCBs
and Scheduled commercial banks are also eligible
for refinance from NABARD under this Scheme.
The loans outstanding under the Warehousing stood
at `759 crore as on 31 March 2012.
N. Other Loans
6.27 Other loans extended out of different Funds
(CDF, MFDEF, WDF and TDF, KfW UPNRM, FIPF,
JNN Solar Mission and PODF ) stood at `231 crore
as on 31 March 2012.
O. Investment of Surplus Funds
6.28 The quantum of surplus deployed by
NABARD in various financial instruments stood at
`12,862 crore during the year. Out of this `6,097
crore was deployed in Government securities and
other financial instruments and an aggregate sum of
`6,765 crore was kept in the form of Short Term
Bank Deposits in order to meet liquidity and
contingency requirements, as on 31 March 2012.
Income and Expenditure
6.29 The total income of NABARD during the
year amounted to `10,979 crore as against `9,202
crore for the year 2010-2011. The profit before tax
(PBT) and profit after tax (PAT) were at `2,252
crore and `1,635 crore respectively as on 31 March
2012, as against the previous year’s PBT and PAT
`1,824 crore and `1,279 crore, respectively. The
average cost of borrowings (interest expenditure as
percent of average borrowings) increased from 6.64
percent per annum during 2010-11 to 6.96 percent
per annum during 2011-12 due to rising interest
rates. An amount of `310 crore, `10 crore, `1 crore
and `1,238 crore was transferred to Special Reserve
u/s 36(1) (viii) of IT Act 1961, NRC (LTO) Fund,
NRC (Stabilisation) Fund and Reserve Fund,
respectively. Further, an aggregate of `145 crore was
transferred to various Funds viz., Cooperative
Development Fund, Research and Development Fund,
Investment Fluctuation Reserve, FIPF, FTTF and
FITF.
Capital Adequacy
6.30 The capital to risk-weighted assets ratio
(CRAR) was at 20.55 per cent as on 31 March
2012 as compared to 21.76 percent as on 31
March 2011, as against a minimum 9 per cent
norm stipulated by RBI.
106
Asset-Liability Management (ALM)
6.31 The Asset-Liability Management
Committee (ALCO) of the Bank oversees the
monitoring and management of market risk,
liquidity risk and interest rate risks, as per the
comprehensive ALM / liquidity management policies
approved by the Board. The role of ALCO includes,
inter-alia, reviewing the Bank’s structural liquidity
and interest-rate sensitivity positions vis-a-vis
prudential limits prescribed by the RBI/Board.
Besides evaluating the market risk of treasury
operations, the ALCO reviews at periodic intervals,
the interest rates fixed for various products and
effect modification in the interest rates wherever
considered essential, taking into account the
market scenario.
107
Annual
Accounts
2011-2012
108
P. Parikh & Associates
HO : 501, Sujata, off Narsi Natha Street, Mumbai - 400 009,Tel : 23443549, 23437853, Fax : 23415455,
Website : www.pparikh.com
Chartered Accountants
AUDITORS’ REPORT
We have audited the attached Balance Sheet of NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT(the ‘Bank’) as at March 31, 2012 and the Profit and Loss Account and the Cash Flow Statement for the year ended on that dateannexed thereto in which are incorporated the returns of 11 Regional Offices and 1 Training Centre audited by us. These Officesand Training Centre have been selected in consultation with the Bank in terms of notification no.F.No.1/14/2004-BOA dated January23, 2012 issued by Government of India, Ministry of Finance, Department of Financial Services. Also incorporated in the BalanceSheet, Profit and Loss Account and Cash Flow Statement are the returns from 18 Regional Offices and 2 Training Centres whichhave not been subjected to audit. These unaudited offices account for 26.18% of advances (includes deemed advances as perNote B-14(c) of Schedule 18), 0.38% of deposits and term money borrowings, 24.85% of interest income (includes interest on‘deemed advances’ as per Note B-14(b) of Schedule 18) and 0.34% of interest expenses. These financial statements are theresponsibility of the Bank’s management. Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significant estimates made by management as well as evaluating theoverall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.Subject to the limitations of the audit mentioned in paragraph 1 above, we report that:
a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary forthe purposes of our audit and have found them to be satisfactory;
b. In our opinion, the transactions of the Bank which have come to our notice have been within the powers of the Bank;
c. The returns received from the Regional Offices and Training Centres of the Banks have been found adequate for thepurpose of our audit;
d. The Balance Sheet and Profit and Loss Account have been drawn up in accordance with Schedule ‘A’ and Schedule ‘B’ ofChapter IV of the National Bank for Agriculture and Rural Development (Additional) General Regulations, 1984;
e. In our opinion and to the best of our information and according to the explanations given and as shown by the books ofthe Bank:
i. the Balance Sheet, read with Significant Accounting Policies and notes on accounts contain all necessary particularsand is properly drawn up in conformity with the accounting principles generally accepted in India so as to exhibita true and fair view of the state of affairs of the Bank as at March 31, 2012; and
ii. the Profit and Loss Account, read with Significant Accounting Policies and notes on accounts, shows a truebalance of the ‘profit’ for the year ended on that date and is in conformity with accounting principles generallyaccepted in India; and
iii. the Cash Flow Statement gives a true and fair view of the cash flows of the Bank for the year ended on that date.
Place: Mumbai For and on behalf ofDate: May 26, 2012 P. Parikh & Associates
Chartered AccountantsFirm Registration No. 107564W
Ashok RajagiriPartner,
Membership No.: 046070
109
(` in thousands)
Sr. FUNDS AND LIABILITIES SCHEDULE As on As onNo. 31.03.2012 31.03.2011
1 Capital 3000,00,00 2000,00,00
2 Reserve Fund and other Reserves 1 13407,68,56 11862,72,33
3 National Rural Credit Funds 2 16058,00,00 16045,00,00
4 Funds out of grants received from International Agencies 3 139,20,78 138,89,56
5 Gifts, Grants, Donations and Benefactions 4 657,92,20 2601,89,23
6 Other Funds 5 4157,12,25 3431,47,40
7 Deposits 6 95397,75,23 82776,67,53
8 Bonds and Debentures 7 38583,86,29 26788,21,49
9 Borrowings 8 4328,48,40 7681,29,10
10 Current Liabilities and Provisions 9 6345,16,85 5546,09,80
Total 182075,20,56 158872,26,44
Forward Foreign Exchange Contracts (Hedging) as per contra 632,33,09 592,09,63
(` in thousands)
Sr. PROPERTY AND ASSETS SCHEDULE As on As onNo. 31.03.2012 31.03.2011
1 Cash and Bank Balances 10 8544,37,38 10765,26,79
2 Investments 11 18209,82,72 19329,50,93
3 Advances 12 152625,95,23 126027,99,95
4 Fixed Assets 13 225,05,62 229,48,63
5 Other Assets 14 2469,99,61 2520,00,14
Total 182075,20,56 158872,26,44
Forward Foreign Exchange Contracts (Hedging) as per contra 632,33,09 592,09,63
Commitment and Contingent Liabilities 17
Significant Accounting Policies and Notes on Accounts 18
Schedules referred to above form an integral part of accounts
As per our attached report of even dateP. Parikh & AssociatesChartered AccountantsFRN . 107564W
Ashok Rajagiri K. S. PadmanabhanPartner Chief General ManagerM No.046070 Accounts DepartmentMumbai Mumbai : 26 May 2012Date : 26 May 2012
Prakash Bakshi H R Khan Dipankar Gupta M L SharmaChairman Director Director Director
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENTBALANCE SHEET AS ON 31 MARCH 2012
110
(` in thousands)
Sr.No. INCOME SCHEDULE 2011-12 2010-11
1 Interest received on Loans and Advances 9511,97,11 8169,13,992 Income from Investment Operations / Deposits 1346,02,32 943,23,85
(Refer Note B-4 of Schedule 18)3 Other Receipts(Refer Note B-6 of Schedule 18) 120,50,51 89,63,23
Total “A” 10978,49,94 9202,01,07
(` in thousands)
Sr.No. EXPENDITURE SCHEDULE 2011-12 2010-11
1 Interest and Financial Charges(Refer Note B-5 of Schedule 18) 15 7534,01,97 6193,86,852 Establishment and Other Expenses 16 A 1027,10,81 1126,09,883 Provisions 16 B 144,18,23 35,60,344 Depreciation 21,22,00 22,57,98
Total “B” 8726,53,01 7378,15,055 Profit before Tax (A - B) 2251,96,93 1823,86,026 Provision for
a) Income Tax 455,00,00 460,00,00b) Deferred Tax Asset (Refer Note B-13 of Schedule 18) 162,00,00 84,65,00
7 Profit after Tax 1634,96,93 1279,21,02Significant Accounting Policies and Notes on Accounts 18
Schedules referred to above form an integral part of accounts
PROFIT AND LOSS APPROPRIATION ACCOUNT
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENTPROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2012
(` in thousands)
Sr.No. APPROPRIATIONS / WITHDRAWALS 2011-12 2010-11
1. Profit for the year brought down 1634,96,93 1279,21,022. Add:
Withdrawals from funds against expenditure debited to Profit & Loss A/ca) Co-operative Development Fund (Refer Schedule 1) 5,35,40 6,05,32b) Research and Development Fund (Refer Schedule 1) 20,65,30 17,67,49c) Watershed Development Fund (Refer Schedule 5) 0 1,01,14d) Micro Finance Development and Equity Fund (Refer Schedule 5) 10,61,32 11,40,75e) Investment Fluctuation Reserve (Refer Schedule 1) 29,94,42 2,07,65f) Farm Innovation & Promotion Fund 2,73,85 2,39,20
2.1 Withdrawals of Funds which have been closedi) Foreign Currency Risk Fund 0 147,06,04ii) Soft Loan Assistance Fund for Margin Money 0 10,00,00iii) Agriculture & Rural Enterprise Incubation Fund 0 5,00,00
3 Profit available for Appropriation 1704,27,22 1481,88,61Less: Transferred to:a) Special Reserves u/s 36(1) (viii) of IT Act, 1961 310,00,00 360,00,00b) National Rural Credit (Long Term Operations) Fund 10,00,00 50,00,00c) National Rural Credit (Stabilisation) Fund 1,00,00 10,00,00d) Co-operative Development Fund 5,35,40 6,05,32e) Research and Development Fund 20,65,30 17,67,49f) Investment Fluctuation Reserve (Refer Schedule 1) 27,15,42 116,07,65g) Farmers Technology Transfer Fund 44,56,36 33,55,54h) Farm Innovation & Promotion Fund (Refer Schedule 1) 2,73,85 2,34,20i) Producers’ Organizations Development Fund 0 50,00,00j) Rural Infrastructure Promotion Fund 0 25,00,00k) Financial Inclusion Technology Fund 45,00,00 10,00,00l) Reserve Fund 1237,80,89 801,18,41Total 1704,27,22 1481,88,61
Refer Schedule 18 for Significant Accounting Policies and Notes on Accounts.
As per our attached report of even dateP. Parikh & AssociatesChartered AccountantsFRN . 107564W
Ashok Rajagiri K. S. PadmanabhanPartner Chief General ManagerM No.046070 Accounts DepartmentMumbai, Date : 26 May 2012 Mumbai : 26 May 2012
Prakash Bakshi H R Khan Dipankar Gupta M L SharmaChairman Director Director Director
111
SCHEDULES TO BALANCE SHEETSchedule 1 - Reserve Fund and Other Reserves
(` in thousands)
Sr. Particulars Opening Exp./Add./ Transferred Transferred to BalanceNo. Balance as on Adjust. From P&L P&L as on
01.04.2011 during the year Appropriation Appropriation 31.03.2012
1 Reserve Fund 6703,91,80 0 1237,80,89 0 7941,72,69
2 Research and Development Fund 50,00,00 0 20,65,30 20,65,30 50,00,00
3 Capital Reserve 74,80,53 0 0 0 74,80,53
4 Investment Fluctuation Reserve 259,00,00 0 27,15,42 29,94,42 256,21,00
5 Co-operative Development Fund 125,00,00 0 5,35,40 5,35,40 125,00,00
6 Special Reserves Created & Maintainedu/s 36(1)(viii) of Income Tax Act, 1961 4445,00,00 0 310,00,00 0 4755,00,00
7 Producers’ Organizations Development Fund 50,00,00 -1,64 0 0 49,98,36
8 Rural Infrastructure Promotion Fund 25,00,00 -4,01 0 0 24,95,99
9 MFDEF - Reserve Fund 80,00,00 0 0 0 80,00,00
10 Farm Innovation & Promotion Fund 50,00,00 0 2,73,85 2,73,85 50,00,00
Total 11862,72,33 -5,65 1603,70,86 58,68,97 13407,68,57
Previous year 10674,59,96 5,00 1378,33,07 190,25,70 11862,72,33
Schedule 2 - National Rural Credit Funds(` in thousands)
Sr Particulars Opening Balance Contribution by Transferred from Balance as onNo. as on 01.04.2011 RBI P&L Appropriation 31.03.2012
1 National Rural Credit(Long Term Operations) Fund 14468,00,00 1,00,00 10,00,00 14479,00,00
2 National Rural Credit (Stabilisation) Fund 1577,00,00 1,00,00 1,00,00 1579,00,00
Total 16045,00,00 2,00,00 11,00,00 16058,00,00
Previous year 15983,00,00 2,00,00 60,00,00 16045,00,00
Schedule 3 - Funds Out of Grants received from International Agencies(` in thousands)
Sr. Particulars Opening Grants received/ Interest Exp./Disb./ Adjust. BalanceNo. Balance as on adjusted during credited to during the as on
01.04.2011 the year the fund year 31.03.2012
1 National Bank - SwissDevelopment Coop. Project 55,61,77 0 0 0 55,61,77
2 Rural Innovation Fund (RIF)(Refer Note B-2 & B-10 of Schedule 18) 73,16,38 0 4,66,84 10,24,81 67,58,41
3 Rural Promotion Fund(Refer Note B-2 & B-10 of Schedule 18) 9,19,49 63,10 5,45 0 9,88,05
4 KfW - NABARD V Fund for Adivasi Programme 91,92 5,23,64 0 3,00 6,12,55
Total 138,89,56 5,86,74 4,72,29 10,27,81 139,20,78
Previous year 149,87,64 16,39,37 4,15,31 31,52,76 138,89,56
112
Schedule 4 - Gifts, Grants, Donations and Benefactions (` in thousands)
Sr. Particulars Opening Grant received Interest Adjusted BalanceNo. Balance as on during Credited to against the as on
01.04.2011 the year the fund expenditure 31.03.2012
A. Grants from International Agencies
1 KfW - NB - IX Adivasi Development Programme -Maharashtra (Refer Note B-10 of Schedule 18) 78,42 4,41,18 8,72 3,52,00 1,76,33
2 KfW UPNRM - Accompanying Measures 16,88 3,28,48 1,00 3,16,21 30,15
3 KfW NB UPNRM - Financial Contribution 81,00 28,29 0 16,09 93,19
4 KfW UPNRM - Risk Mitigation Fund 11,74 1,24,17 0 0 1,35,91
5 International Fund for Agriculture Development(IFAD) Priyadarshini(Refer Note B-11 of Schedule 18) 4,66,44 0 0 4,66,44 0
6 GIZ - Uttarakhand Regional Economic Development 86,39 0 0 86,39 0
7 KfW-NB-Indo German Watershed Development Programme -Phase III - Maharashtra (Refer Note B-10 & B-11 of Schedule 18) 2,32 18,79,53 4,81 18,86,67 0
8 Indo German Watershed Development Programme -Andhra Pradesh (Refer Note B-10 & B-11 of Schedule 18) 73 7,86,68 25 7,87,67 0
9 Indo German Watershed Development Programme -Gujarat (Refer Note B-10 & B-11 of Schedule 18) 15 5,53,18 2,94 5,56,25 0
10 Indo German Watershed Development Programme -Rajasthan (Refer Note B-10 & B-11 of Schedule 18) 0 3,23,66 67 3,24,33 0
11 KfW Umbrella Programme on Natural Resource Management Fund(Refer Note B-3 of Schedule 18) 9,20,51 2,73,36 0 2,16,46 9,77,42
12 NABARD Grant for Fixed Assets under NB-SDC HID Project 6,60 0 0 6,60 0
13 GIZ-NABARD RFP - Financial Component 1,00 0 0 1,00 0
14 NE Council Fund for Miscellaneous Training Programme(Refer Note B-11 of Schedule 18) 1,79 0 0 1,79 0
15 KfW NB SEWA Bank Capitalisation ofRural Financial Institutions (RFIs) 2,66 2,94,83 0 2,97,49 0
16 GIZ Rural Financial Institutions Program (RFIP) 58,00 76,86 0 36,56 98,31
17 GIZ UPNRM Technical Collaboration 39,21 51,40 0 63,50 27,11
18 United Nation Development Programme(UNDP) -NABARD-Financial Inclusion Fund -1,09,74 1,56,48 0 46,74 0
B. Government Subsidy Schemes
1 Capital Investment Subsidy for Cold Storage Projects - NHB 19,18,67 11,35,46 0 26,63,82 3,90,32
2 Capital Subsidy for Cold Storage NHM 9,66 0 0 0 9,66
3 Capital Subsidy for Cold Storage TM North East 4,37,96 1,65,03 0 6,02,99 0
4 Credit Linked Capital Subsidy for Technology Upgradation of SSIs 6,23 4,89,64 0 4,95,87 0
5 Capital Investment Subsidy for Rural Godowns 39,38,94 121,00,00 0 148,68,54 11,70,39
6 Million Shallow Tubewell Programme – Bihar 2,63,15 0 0 2,63,15 0
7 Bihar Ground Water Irrigation Scheme (BIGWIS) 182,89,03 2,39,65 0 34,78,22 150,50,47
8 Cattle Development Prog. - Uttar Pradesh(Refer Note B-10 of Schedule 18) 26,61 0 1,68 26,60 1,69
9 Cattle Development Programme - Bihar(Refer Note B-10 of Schedule 18) 99,46 1,71,40 6,19 99,46 1,77,59
10 National Project on Organic Farming 6,22 1,50,00 0 1,08,52 47,71
11 Integrated Watershed Development Programme -Rashtriya Sam Vikas Yojana 14,22,55 10,58,00 0 17,74,18 7,06,37
12 Centrally Sponsored Scheme on Integrated Development ofSmall Ruminants and Rabbits 3,44,55 4,00,00 0 7,14,53 30,02
113
13 Rain Water Harvesting Scheme 89,93 -89,93 0 0 0
14 Kutch Drought Proofing Project 39,35 0 0 17,38 21,96
15 Dairy and Poultry Venture Capital Fund 12,27,65 0 0 -5,00,36 17,28,00
16 Poultry Venture Capital Fund 5,61,71 0 0 3,79,11 1,82,60
17 Poultry Venture Capital Fund (Subsidy) 0 5,00,00 0 4,14,73 85,27
18 Capital Subsidy for Agriculture Marketing Infrastructure,Grading and Standardisation 20,65,63 149,25,88 0 166,79,31 3,12,19
19 Centrally Sponsored Scheme for establishing Poultry Estate 5,97,03 2,28,12 0 0 8,25,15
20 Livelihood Advancement Business School -Sultanpur, Uttar Pradesh 2,16 48,73 0 50,90 0
21 Livelihood Advancement Business School -Rae - Bareli , Uttar Pradesh 54,47 0 0 54,47 0
22 Multi Activity Approach for Poverty Alleviation -Sultanpur, Uttar Pradesh (Refer Note B-10 of Schedule 18) 51,14 0 3,36 0 54,49
23 Multi Activity Approach for Poverty Alleviation -BAIF - Rae Bareli, Uttar Pradesh(Refer Note B-10 of Schedule 18) 1,37,01 0 2,86 1,25,93 13,95
24 CCS - on Pig Development 1,58 6,37,00 0 5,81,75 56,83
25 Dairy Entrepreneurship development Scheme 10,45,52 110,00,00 0 100,75,18 19,70,34
26 CCS - S & R Male Buffalo calves 1,92,00 0 0 1,92,00 0
27 CSS - JNN Solar Mission 31,39,19 29,60,00 0 41,69,88 19,29,30
28 CSS - JNNSM - Solar Lighting 0 46,80,00 0 46,80,00
29 CSS - on Rural Slaughter Houses 9,92 0 0 0 9,92
30 Capital Subsidy Scheme - Agri Clinics Agri Business Centres 1,59,61 6,00,00 0 5,69,82 1,89,79
31 Artificial Recharge of Groundwater in Hard Rock Area 1256,04,04 0 0 1232,17,58 23,86,46
32 Agriculture Debt Waiver and Debt Relief Scheme (ADWDR) 2008 419,85,25 35,69,00 0 263,64,41 191,89,84
33 Women’s Self Help Groups [SHGs] Development Fund 0 100,00,00 0 0 100,00,00
C. Interest Relief / Subvention
1 Interest Subvention (Sugar Term Loan) 19,64 30,00,00 0 30,08,33 11,31
2 Scheme for providing Financial Assistance to Sugar Undertakings -2007 (SEFASU - 2007) 134,82,85 0 0 134,37,52 45,33
D Revival Package of Short Term Cooperative Credit Structure
1 Cost of Special Audit 10,49,15 0 0 10,49,15 0
2 Recapitalisation Assistance to Credit Cooperative Societies 340,64,24 88,78 0 341,53,03 0
3 Technical Assistance 13,90,73 0 0 13,30,17 60,57
4 Human Resources Development 9,10,27 1,59,00 0 10,68,71 56
5 Implementation Cost 18,82,00 15,21,22 0 34,15,83 -12,62
E Revival Package forLong Term Co-operative Credit Structure (LTCCS) 20,00,00 0 0 0 20,00,00
F Revival, Reform and Restructuring of Handloom Sector
1 Implementation Cost [RRR] - Handloom Package 0 5,00,00 0 66,58 4,33,42
2 Expenditure on Loss Assessment [RRR] - Handloom Package 0 5,00,00 0 5,10 4,94,90
Total 2601,89,22 760,55,08 32,48 2704,84,58 657,92,20
Previous year 4706,76,57 2988,77,26 69,91 5094,34,52 2601,89,22
Schedule 4 - Gifts, Grants, Donations and Benefactions (` in thousands)
Sr. Particulars Opening Grant received Interest Adjusted BalanceNo. Balance as on during Credited to against the as on
01.04.2011 the year the fund expenditure 31.03.2012
114
Schedule 5 - Other Funds (` in thousands)
Sr. Particulars Opening Additions/ Transferred Interest Expenditure/ Transferred to BalanceNo. Balance as on Adjustments from P & L Credited Disb.during P&L as on
01.04.2011 during the year Appropriation the year Appropriation 31.03.2012
1 Watershed Development Fund 1897,68,75 0 0 109,46,03 201,12,19 0 1806,02,59
2 Micro Finance Development andEquity Fund(Refer Note B-10 of Schedule 18) 139,11,97 0 0 8,34,03 18,07,11 10,61,32 118,77,57
3 Interest Differential Fund -(Forex Risk) 157,69,73 12,56,28 0 0 0 0 170,26,01
4 Interest Differential Fund - (Tawa) 10,00 0 0 0 0 0 10,00
5 Adivasi Development Fund 5,30,31 32,86 0 0 5 0 5,63,12
6 Tribal Development Fund 1054,50,93 1003,84,89 0 0 157,11,49 0 1901,24,33
7 Financial Inclusion Fund(Refer Note B-10 of Schedule 18) 53,10,64 16,27,02 0 3,44,96 18,89,93 0 53,92,69
8 Financial Inclusion Technology Fund(Refer Note B-10 of Schedule 18) 22,95,08 60,07,76 45,00,00 52,36 128,39,26 0 15,94
9 Farmers Technology Transfer Fund 101,00,00 0 44,56,36 0 44,56,36 0 101,00,00
Total 3431,47,41 1093,08,81 89,56,36 121,77,38 568,16,39 10,61,32 4157,12,25
Previous year 2735,06,35 930,89,69 43,55,54 101,05,25 366,67,55 12,41,88 3431,47,41
Schedule 6 - Deposits(` in thousands)
Sr. Particulars As on As onNo. 31.03.2012 31.03.2011
1 Central Government 0 0
2 State Governments 0 0
3 Others
a) Tea / Rubber / Coffee Deposits 284,04,01 228,29,61
b) Term Deposits 7,00,00 48,46,15
c) Commercial Banks (Deposits under RIDF) 75106,71,22 67877,63,52
d) Short Term Cooperative Rural Credit Fund 20000,00,00 14622,28,25
Total 95397,75,23 82776,67,53
Schedule 7 - Bonds and Debentures (` in thousands)
Sr. Particulars As on As onNo. 31.03.2012 31.03.2011
1 SLR Bonds 0 98,99,70
2 Non Priority Sector Bonds 33577,90,00 21682,50,00
3 Capital Gains Bonds 6,77,20 7,52,70
4 Bhavishya Nirman Bonds 4975,19,52 4975,19,52
5 NABARD Rural Bond 23,99,57 23,99,57
Total 38583,86,29 26788,21,49
115
Schedule 8 - Borrowings(` in thousands)
Sr. Particulars As on As onNo. 31.03.2012 31.03.2011
1 Central Government 84,80,09 123,97,71
2 Jawaharlal Nehru National Solar Mission 32,82,00 0
3 Others :
(A) In India(i) Certificate of Deposits 1281,00,69 136,86,14(ii) Commercial Paper 2245,26,97 6447,64,81(iii) Term Money Borrowings 181,81,00 110,16,00(iv) Borrowing against STD 0 360,00,00
(B) Outside India
(i) International Agencies 502,77,65 502,64,44
Total 4328,48,40 7681,29,10
Schedule 9 - Current Liabilities and Provisions(` in thousands)
Sr. Particulars As on As onNo. 31.03.2012 31.03.2011
1 Interest / Discount Accrued 4905,56,26 3527,97,31
2 Sundry Creditors 370,76,97 401,73,28
3 Subsidy Reserve (Co-finance, Cold Storage) 1,15,23 93,89
4 Subsidy Reserve - CSAMI under RIDF 2,27,06 1,45,00
5 Provision for Gratuity(Refer Note B-21 of Schedule 18) 0 17,44,81
6 Provision for Pension(Refer Note B-21 of Schedule 18) 245,62,63 934,44,01
7 Provision for Encashment of Ordinary Leave (Refer Note B-21 of Schedule 18) 15,89,20 5,07,12
8 Unclaimed Interest on Bonds 2,01,28 3,90,27
9 Unclaimed Interest on Term Deposits 71 41,96
10 Term Deposits Matured but not claimed 8,32,11 5,48,20
11 Bonds matured but not claimed 5,82,48 20,06,38
12 Application money received pending allotment of Bonds 44 50
13 Provisions and Contingencies(a) Amortisation in Value of Investment a/c - G Sec. 30,62,12 0(b) For Standard Assets 673,31,00 594,57,00(c) Depreciation in value of investments - equity 3,19,22 3,36,93(d) Countercyclical Provisioning Buffer 25,51,00 25,51,00(e) Sacrifice in interest element of restructured loans 51,37,00 0
(Refer Note 29.6 of Schedule 18)(f) Provision for Other Assets & Receivables 3,72,14 3,72,14
Total 6345,16,85 5546,09,80
Schedule 10 - Cash and Bank Balances(` in thousands)
Sr. Particulars As on As onNo. 31.03.2012 31.03.20111 Cash in hand 9 72 Balances with :
A) Reserve Bank of India 1168,79,91 38,85,26B) Others
(I) Other Banks in Indiaa) in Current Account 379,62,31 801,32,40b) Deposit with Banks 6765,00,00 9002,46,14(i) Remittances in Transit 2,54 694,44,37(ii) Collateralised Borrowing and Lending Obligations 230,92,53 228,18,56
(II) Outside India 0 0
Total 8544,37,38 10765,26,80
116
Schedule 11-Investment
(` in thousands)
Sr. Particulars As on As onNo. 31.03.2012 31.03.2011
1 Government Securities
a) Securities of Central Government 2146,81,84 2548,31,03[Face Value `2174,08,20,000 (`2599,65,70,000)][Market Value `2105,40,99,310 (`1971,99,03,930)]
b) Treasury Bills 58,28,37 0
2 Other Approved Securities 0 0
3 Equity Shares in :
(a) Agricultural Finance Corporation Ltd. 1,00,00 1,00,00[1,000 (1,000) - Equity shares of `10,000 each]
(b) Small Industries Development Bank of India 48,00,00 48,00,00[1,60,00,000 (1,60,00,000) - Equity shares of `10 each]
(c) Agriculture Insurance Company of India Ltd. 60,00,00 60,00,00[6,00,00,000 (6,00,00,000) - Equity shares of ` 10 each]
(d) Multi Commodity Exchange of India Ltd. 1,25,00 1,25,00[15,62,500 (15,62,500) - Equity shares of ` 10 each]
(e) National Commodity and Derivatives Exchange Ltd. 16,87,50 16,87,50[56,25,000 (56,25,000) - Equity shares of ` 10 each]
(f) Universal Commodity Exchange Ltd [UCX] 16,00,00 0[1,60,00,000 (NIL) Shares of ` 10 each]
(g) Other Equity Investments
(i) Coal India Ltd. ` 42,60,305
(ii) Power Grid Corporation of India Ltd. ` 25,73,280
(iii) Mangnese Ore India Ltd. ` 43,94,625
(iv) Punjab & Sindh Bank ` 9,54,960 1,21,83 1,21,83
4 Debentures and Bonds
(i) Special Development Debentures of SCARDBs (Refer Note B-16 of Schedule 18) 12343,53,09 13461,16,56
(ii) Non Convertible Debentures 375,01,62 225,00,00
5 Shareholding in subsidiaries and Joint Venture
(i) NABARD Financial Services Ltd, Karnataka ` 25,96,82,000
[2,59,68,200(84,00,000] - Equity shares of ` 10 each]
(ii) Agri - Business Finance [Andhra Pradesh] Ltd. ` 5,20,00,000[52,00,000(52,00,000) - Equity shares of ` 10 each]
(iii) Agri Development Finance [Tamil Nadu] Ltd. ` 5,20,00,000 36,36,82 18,80,00[52,00,000 (52,00,000) - Equity shares of ` 10 each]
(iv) NABARD Consultancy Services Pvt. Ltd. 5,00,00 5,00,00[50,00,000 (50,00,000) - Equity shares of ` 10 each]
6 Others
(i) Commercial Paper[Face Value ` 1115,00,00,000 (` 1950,50,00,000)] 1036,60,64 1861,99,91
(ii) Certificate of Deposit[Face Value ` 2125 crore (` 700 crore)] 2037,93,74 680,42,26
(iii) Units of Liquid Mutual Funds 0 390,11,34
(iv) SEAF - Indian Agri- Business 2,07,59 37,50
(v) APIDC - Ventureast Life Fund III 5,85,45 4,98,00
(vi) BVF (Bio-Tech Venture Fund) - APIDC-V Investment 4,98,35 5,00,00[49835.46 (50,000) Class A Units of ` 1,000 each]
(vii)Tata Capital Innovation Fund 13,00,88 0
Total 18209,82,72 19329,50,93
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(` in thousands)Sr. Particulars As on As onNo. 31.03.2012 31.03.2011Refinance Loans
a) Production & Marketing Credit 48337,74,51 33884,82,33b) Conversion Loans for Production Credit 128,81,10 193,21,67c) Other Investment Credit :
i) Medium Term and Long Term Project Loans (Refer Note B-16 of Schedule 18) 30761,75,91 25435,26,23ii) Interim Finance 1,60,00 0iii) Direct refinance to DCCBs 910,34,00 0iv) Loans out of RIDF warehousing infrastructure 759,09,58 0v) JNN Solar Mission 30,32,29 0
Direct Loansa) Loans under Rural Infrastructure Development Fund 70860,30,56 66077,96,22b) Long Term Non-Project Loans 140,06,20 167,20,61c) Loans under NABARD Infrastructure Development Assistance (NIDA) 422,90,33 0d) Loans under Producers’ Organization Development Fund (PODF) 7,41,32 0e) Other Loans out of:
i) Co-operative Development Fund 2,61,43 3,11,68ii) Micro Finance Development Equity Fund 72,91,49 89,23,20iii) Watershed Development Fund 36,25,01 32,09,56iv) Tribal Development Fund 7,02,99 3,47,16v) KfW UPNRM Fund 71,22,51 53,11,82vi) Farm Innovation & Promotion Fund 32,39 40,75vii) NFS Promotional Activities Fund 2,85,94 50,00viii) Farmers Technology Transfer Fund 2,17 0
f) Co-Finance Loans (Net of provision) 72,35,50 87,58,72Total 152625,95,23 126027,99,95
Schedule 13 - Fixed Assets
Schedule 12 - Advances
(` in thousands)Sr. Particulars As on As onNo. 31.03.2012 31.03.2011
1 LAND : Freehold & Leasehold (Refer Note B-15 of Schedule 18)Opening Balance 148,08,29 146,12,13Additions/adjustments during the year -51,23 1,96,16Closing Balance (at cost) 147,57,06 148,08,29Less: Amortisation of Lease Premia 42,04,17 40,59,65Book Value 105,52,89 107,48,64
2 PREMISES (Refer Note B-15 of Schedule 18)Opening Balance 263,42,46 259,08,11Additions/adjustments during the year 2,41,99 4,34,35Closing Balance (at cost) 265,84,45 263,42,46Less: Depreciation to date 164,28,77 156,33,58Book Value 101,55,68 107,08,88
3 FURNITURE & FIXTURESOpening Balance 58,54,15 57,24,47Additions/adjustments during the year 9,24 1,43,23Sub-Total 58,63,39 58,67,70Less: Cost of assets sold/written off 33,15 13,56Closing Balance (at cost) 58,30,24 58,54,15Less: Depreciation to date 56,54,82 55,77,96Book Value 1,75,42 2,76,19
4 COMPUTER INSTALLATIONS & OFFICE EQUIPMENTSOpening Balance 72,99,45 68,22,68Additions/adjustments during the year 11,72,44 8,85,36Sub-Total 84,71,89 77,08,04Less: Cost of assets sold/written off 2,10,14 4,08,59Closing Balance (at cost) 82,61,75 72,99,45Less: Depreciation to date 70,07,77 62,68,28Book Value 12,53,98 10,31,17
5 VEHICLESOpening Balance 4,43,30 4,39,48Additions/adjustments during the year 4,44,55 1,63,09Sub-Total 8,87,85 6,02,57Less: Cost of assets sold/written off 2,57,52 1,59,27Closing Balance (at cost) 6,30,33 4,43,30Less: Depreciation to date 2,62,68 2,59,55Book Value 3,67,65 1,83,75
Total 225,05,62 229,48,63
Note: Refer note A-12.6 & B-19 of Schedule 18 for change in capitalization policy.
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Schedule 14 - Other Assets(` in thousands)
Sr. Particulars As on As onNo. 31.03.2012 31.03.2011
1 Accrued Interest 1804,09,10 1815,75,352 Deposits with Landlords 1,39,26 1,48,043 Deposits with Government Departments and Other Institutions 3,15,19 2,97,864 Housing loan to staff 164,74,61 140,22,375 Other Advances to staff 77,03,84 65,08,796 Advances to Landlords 3,27 1,037 Capital Work in Progress [Purchase of Staff Quarters & Office Premises] 70,75,72 51,48,848 Sundry Advances 51,49,02 38,58,479 Advance Tax (Net of Provision for Income Tax) 102,55,89 130,80,93
10 Deferred Tax Assets (Refer Note B-13 of Schedule 18) 71,15,00 233,15,0011 Expenditure recoverable from Government of India/International Agencies 28,75,78 5,35,5712 Discount Receivable 94,82,93 35,07,89
Total 2469,99,61 2520,00,14
Schedule 15 - Interest and Financial Charges (` in thousands)
Sr. Particulars 2011-12 2010-11No.
1 Interest Paid ona) Deposits under RIDF 4078,35,01 3714,32,70b) Short Term Cooperative Rural Credit Fund 376,74,20 259,76,37c) Term Deposits 2,68,39 22,78,08d) Tea / Coffee / Rubber Deposits 16,84,86 10,86,63e) CBS Deposits 50,39 0f) Deposits / Borrowings 0 3g) Loans from Central Government 7,27,66 10,21,19h) Bonds (Refer Note B-5 of Schedule 18) 2420,01,48 1680,25,58i) Commercial Paper (Refer Note B-5 of Schedule 18) 372,08,50 247,82,46j) Term Money Borrowings 14,74,67 21,06,65k) Borrowing against ST Deposit 2,65,85 31,11,00l) Discount Cost Paid on Certificate of Deposits 37,53,31 6,29,72m) Corporate Borrowings from Banks and FIs in India 0 21,35,58n) Borrowings from International Agencies 20,85,03 22,58,86o) Watershed Development Fund 109,46,03 81,25,55p) Micro Finance Development and Equity Fund 8,34,03 11,29,46q) Rural Innovation Fund 4,66,84 4,14,13r) Financial Inclusion Fund 3,44,96 4,15,86s) Financial Inclusion Technology Fund 52,36 4,34,39t) Indo German Watershed Development Programme - Andhra Pradesh 25 71u) Indo German Watershed Development Programme - Rajasthan 67 1,78v) Indo German Watershed Development Programme - Gujarat 2,94 53w) KfW UPNRM - Accompanying measures 1,00 1,07x) KfW - NB Indo German Watershed Development Programme - Phase III - Maharashtra 4,81 5,80y) KfW - NB - IX Adivasi Development Programme 8,72 18,84z) KFW NB V - Adivasi Project 5,81,92 0aa) Commitment Charges -KfW UPNRM Borrowings 6,84 20,74ab) Livelihood Advancement Business School RF Project - Sultanpur, Uttar Pradesh 0 2,08ac) Livelihood Advancement Business School RF Project - Rae Bareli, Uttar Pradesh 0 5,62ad) Multi Activity Approach for Poverty Alleviation BAIF Project - Sultanpur, Uttar Pradesh 3,36 4,14ae) Multi Activity Approach for Poverty Alleviation BAIF Project -Rae Bareli, Uttar Pradesh 2,86 11,08af) Cattle Development Programme (UP & Bihar) 7,86 18,26
2 Discount on Collateralised Borrowing and Lending Obligations 40,71,13 26,59,913 Discount, Brokerage, Commission & issue exp. on Bonds and Securities 6,63,94 5,78,804 Swap Charges 3,72,10 6,93,25
Total 7534,01,97 6193,86,85
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Schedule 16 A - Establishment and Other Expenses (` in thousands)
Sr. Particulars 2011-12 2010-11No.
1 Salaries and Allowances (Refer Note B-20 of Schedule 18) 442,63,36 586,57,402 Contribution to / Provision for Staff Superannuation Funds 345,27,10 327,61,903 Other Perquisites & Allowances 27,18,08 22,96,154 Travelling & Other allowances in connection with Directors’ &
Committee Members’ Meetings 21,67 13,355 Directors’ & Committee Members’ Fees 1,36 1,086 Rent, Rates, Insurance, Lighting, etc. 21,81,60 20,82,987 Travelling Expenses 29,03,51 24,49,568 Printing & Stationery 3,20,71 2,81,219 Postage, Telegrams & Telephones 8,73,17 8,48,8510 Repairs 8,51,53 6,55,8711 Auditors’ Fees 9,46 8,0612 Legal Charges 28,55 17,8613 Miscellaneous Expenses 42,25,15 40,77,5914 Expenditure on Miscellaneous Assets 5,84,70 44,3715 Expenditure on Study & Training
[Including `9,35,82,458 (`7,58,70,397)pertaining to establishment expenses ofRegional Training Colleges] 39,24,95 33,46,06
16 Expenditure on promotional activities under:(i) Cooperative Development Fund 5,35,40 6,05,32(ii) Micro Finance Development and Equity Fund 10,61,32 11,40,75(iii) Watershed Development Fund 0 1,01,14(iv) Farm Innovation and Promotion Fund 2,73,85 2,39,20(v) Exp. for NFS Promotional Measures/ Activities 30,24,32 27,52,58
17 Wealth Tax 3,81,02 2,28,60
Total 1027,10,81 1126,09,88
Schedule 16 B - Provisions
(` in thousands)
Sr. Particulars 2011-12 2010-11No.
Provisions for :1 Amortisation of G. Sec 0 02 Standard Assets (Refer Note 29.6 of Schedule 18) 78,74,00 03 Non Performing Assets 14,80,00 32,86,00
3a Non Performing Assets - Staff 7,23 4,004 Nabard General Advices 0 -53,245 Depreciation in Investments G.Sec 0 06 Depreciation in Value of Investment Account - Equity -80,00 -5,087 Sacrifice in interest element of restructured Accounts 51,37,00 -8,008 Other Assets / Receivable 0 3,36,66
Total 144,18,23 35,60,34
Schedule 17 - Commitments and Contingent Liabilities(` in thousands)
Sr. Particulars As on As onNo. 31.03.2012 31.03.2011
1 Commitments on account of capital contracts remaining to be executed 229,32,01 37,81,29Sub Total “A” 229,32,01 37,81,29
2 Contingent Liabilities(i) Claims against the Bank not acknowledged as debt (Refer Note B-24 of Schedule 18) 23,93 0(ii) Income Tax matters in appeal 0 0
Sub Total “B” 23,93 0
Total (A + B) 229,55,94 37,81,29
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A. SIGNIFICANT ACCOUNTING POLICIES
1. Basis of Preparation
1.1 The accounts are prepared on the historical costconvention and comply with all material aspects containedin the National Bank for Agriculture and Rural DevelopmentAct, 1981 and Regulations thereof, applicable AccountingStandards (AS) issued by the Institute of CharteredAccountants of India (ICAI) and regulatory norms prescribedby the Reserve Bank of India (RBI). Except otherwisementioned, the accounting policies have been consistentlyapplied by the National Bank for Agriculture and RuralDevelopment (NABARD / the Bank) and are consistent withthose used in the previous year.
1.2 Preparation of financial statements as per GenerallyAccepted Accounting Practices (GAAP) requires themanagement to make several assumptions and estimatesthat affect reported results and the reported state of affairsof the Bank; the example of such cases include the estimatedlife of fixed assets, liability on account of employee retirementbenefits, provision for anticipated losses, etc. Actual resultscould differ from such estimates. Such differences arerecognized in the year of outcome of such results.
2. Income and expenditure
2.1 Income and expenditure are accounted on accrualbasis, except the following, which are accounted on cashbasis:
a. Interest on non-performing assets identified as per RBIguidelines.
b. Income by way of penal interest charged due to delayedreceipt of loan dues or non–compliance with terms ofloan.
c. Service Charges on loans given out of Micro FinanceDevelopment and Equity Fund, WatershedDevelopment Fund.
d. Expenses not exceeding ` 10,000 at each accountingunit, under a single head of expenditure.
2.2 Issue expenses relating to floatation of bonds arerecognised as expenditure in the year of issue of Bonds.
2.3 Dividend on investments is accounted for, whenthe right to receive the dividend is established.
3. Fixed Assets and Depreciation
3.1 Fixed assets are stated at cost of acquisition, lessaccumulated depreciation and impairment losses, if any. Thecost of assets includes taxes, duties, freight and otherincidental expenses related to the acquisition and installationof the respective assets. Subsequent expenditure incurredon existing asset is capitalized, only when it increases thefuture benefit from the existing assets beyond its previouslyassessed level of performance.
3.2 Land includes free hold and leasehold land.
3.3 Premises include value of land, where segregatedvalues are not readily available.
3.4 Depreciation on premises situated on free hold landis charged at 10% p.a., on written down value basis.
3.5 Depreciation on leasehold land and premisessituated thereon is computed and charged at 5% on writtendown value basis or the amount derived by amortising thepremium/cost over the remaining period of lease hold land,on straight-line basis, whichever is higher.
3.6 The Bank has revised the Capitalisation Policy witheffect from 01 April 2011. As per the revised policy, FixedAssets costing ` 1 lakh and less (except easily portableelectronic assets such as laptops, mobile phones, etc. costingmore than ` 10,000/-) are charged to the Profit & LossAccount in the year of acquisition. The valuable but easilyportable electronic assets such as laptops, mobile phones,etc., shall be capitalised, if individual cost of the items ismore than `10,000/-. All software costing above ` 1 lakheach, whether purchased independently or with hardwareand operating system software, is capitalised.
3.7 Depreciation on other fixed assets is charged overthe estimated useful life of the assets ascertained by themanagement at the following rates on Straight Line Methodbasis:
Type of Assets Depreciation Ratew e f 01 April 2011
Furniture and Fixtures 20%Computer Installations 33.33%Office Equipments 20%
Vehicles 20%
Schedule 18SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF ACCOUNTS
FOR THE YEAR ENDED MARCH 31, 2012
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Depreciation is charged for the full year, irrespective of thedate of purchase of asset. No depreciation is charged onassets sold during the year.
4. Intangible Assets and Amortisation
Intangible assets are recognized /amortised, as perthe criteria specified in AS 26 “Intangible Assets”.
5. Investments
5.1 In accordance with the RBI guidelines, Investmentsare classified into “Held for Trading” (HFT), “Available forSale” (AFS) and “Held to Maturity” (HTM) categories(hereinafter called “categories”).
5.2 Securities that are held principally for resale within90 days from the date of purchase are classified as “HFT”.Investments that the Bank intends to hold till maturity areclassified as “HTM”. Securities which are not to be classifiedin the above categories are classified as “AFS”.
5.3 Investments categorized under “HTM” are carriedat cost and provision for depreciation/diminution/amortisation, if any, in value of investments, is includedunder Current Liabilities and Provisions.
5.4 Provision for diminution, other than temporary, inthe value of investments in subsidiaries under the category“HTM” is made, wherever necessary.
5.5 Profit on sale of investment categorized under“HTM” is recognized in Profit & Loss A/c and thentransferred to Capital Reserve A/c. Loss on sale ofinvestment categorized under “HTM” is recognized in Profit& Loss A/c.
5.6 Investments under “AFS” and “HFT” are markedto market, scrip-wise, at the rate, declared by Primary DealersAssociation of India (PDAI), jointly with Fixed Income MoneyMarket and Derivative Association of India (FIMMDA), atprescribed intervals. While only net depreciation, if any, isprovided for investments in the category classified as “AFS”,depreciation / appreciation is recognised in the category forinvestments classified as “HFT”.
5.7 Treasury Bills are valued at carrying cost.
5.8 Unquoted Shares are valued at breakup value, ifthe latest Audited Accounts of the investee companies isavailable, or at ` 1/- per share as per RBI guideline.
5.9 Brokerage, commission, etc. paid at the time ofacquisition, are charged to revenue.
5.10 Broken period interest on debt investment is treatedas a revenue item.
5.11 Transfer of a security between the categories isaccounted for, at lower of the acquisition cost/book value/market value on the date of transfer and depreciation, ifany, on such transfer, is fully provided for.
6. Advances and Provisions thereon
6.1 Advances are classified as per RBI guidelines.Provision for standard assets and non–performing assets ismade in respect of identified advances, based on a periodicreview and in conformity with the provisioning normsprescribed by RBI.
6.2 In case of restructuring/rescheduling of advances,the difference between the present value of future interestas per the original agreement and the present value of futureinterest as per the revised agreement is provided for.
6.3 Advances are stated net of provisions towards Non-performing Advances.
7. Foreign Currency Transactions
7.1 Foreign currency borrowings are covered byhedging agreements and are marked to market at everyreporting date, the resultant gain, if any, is ignored and loss,if any, is provided for. The liability towards foreign currencyborrowings at the prevailing exchange rate on the reportingdate is mentioned under the Balance sheet, as a contra entry.
7.2 Profit on cancellation of or renewal of currencySWAP agreement, if any, is accounted for, on the finalsettlement of agreement; however, loss on such transactionsis provided at the market rates, as on the date of BalanceSheet.
8. Retirement Benefits
8.1 The Bank has a Provident Fund Scheme managedby RBI. Contribution to the Fund is made on actual basis.
8.2 Provision for gratuity is made based on actuarialvaluation, in respect of all employees including employeestransferred from RBI. The amount of gratuity due from RBI,in respect of employees transferred from RBI, is accountedon cash basis.
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8.3 Employer’s contribution to Provident Fund relatingto the pension optees (part of Pension Fund) is maintainedwith RBI.
8.4 Provision for Encashment of Ordinary Leave ismade on the basis of actuarial valuation.
9. Taxes on Income
9.1 Tax on income for the current period is determinedon the basis of taxable income and tax credits computed, inaccordance with the provisions of Income Tax Act, 1961and based on expected outcome of assessments/appeals.
9.2 Deferred tax is recognized, on timing difference,being the difference between taxable income and accountingincome for the year and quantified, using the tax rates andlaws that have been enacted or substantively enacted, ason Balance Sheet date.
9.3 Deferred tax assets relating to unabsorbeddepreciation/business losses are recognised and carriedforward to the extent that there is virtual certainty thatsufficient future taxable income will be available againstwhich, such deferred tax assets can be realized.
9.4 Other deferred tax assets are recognised and carriedforward to the extent that there is a reasonable certaintythat sufficient future taxable income will be available againstwhich, such deferred tax assets can be realized.
9.5 Provision for Wealth Tax is made, in accordancewith the provisions of Wealth Tax Act, 1956.
10. Segment Reporting
10.1 Segment revenue includes interest and otherincome directly identifiable with / allocable to the segment.
10.2 Expenses that are directly identifiable with/allocableto segments are considered for determining the segmentresult. The expenses, which relate to the Bank as a wholeand not allocable to segments, are included under “OtherUnallocable Expenditure”.
10.3 Income, which relates to Bank as a whole and notallocable to segments is included under “Other unallocablebank income”.
10.4 Segment assets and liabilities include those directlyidentifiable with the respective segments. Unallocable assets
and liabilities include those that relate to the Bank as a wholeand not allocable to any segment.
11. Impairment of Assets
11.1 As at each Balance Sheet date, the carrying amountof assets is tested for impairment so as to determine:
a) the provision for impairment loss, if any,required; or
b) the reversal, if any, required for impairment lossrecognized in the previous periods.
11.2 Impairment loss is recognized when the carryingamount of an asset exceeds recoverable amount.
12 Provisions, Contingent Liabilities andContingent Assets
12.1 Provisions are recognised for liabilities that can bemeasured only by using substantial degree of estimation if:
a) the Bank has a present obligation as a result of a pastevent;
b) a probable outflow of resources is expected to settlethe obligation; and
c) the amount of the obligation can be reliably estimated.
12.2 Reimbursement, expected in respect of expenditure,which require a provision, is recognised only when it isvirtually certain that the reimbursement will be received.
12.3 Contingent liability is disclosed in the case of:
a) a present obligation arising from past events, when it isnot probable that an outflow of resources will berequired to settle the obligation,
b) a present obligation when no reliable estimate ispossible, and
c) a possible obligation arising from past events wherethe probability of outflow of resources is not remote.
12.4 Contingent assets are neither recognized, nordisclosed.
12.5 Provisions, contingent liabilities and contingentassets are reviewed at each Balance Sheet date.
12.6 Change in accounting policy: There was a changein accounting policy during the year in case of capitalizationof fixed assets. The details are indicated in para 3.6 and 3.7of part-A of this schedule
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B. NOTES FORMING PART OF THE ACCOUNTS
1. In terms of TAWA Command Area DevelopmentProject Agreement, the “Interest Differential Fund” is to beutilized for certain specified purposes.
2. In accordance with the Memorandum ofUnderstanding entered into with the Swiss Agency forDevelopment Cooperation, repayment of loan, servicecharges and other receipts made out of Rural InnovationFund (RIF) are being credited to the Rural Promotion Fund(RPF).
3. In terms of the agreement with KfW, accretion/income and certain expenditure under UPNRM have beencharged to the fund. The loans granted out of the fund havebeen adjusted with direct loans.
4. Income under the head ‘Income from InvestmentOperations / Deposits’ includes ‘Discount and Commission’.
5. Subvention received/receivable from GOIamounting to ` 1475.52 crore (` 989.34crore), being thedifference between the cost of borrowing by NABARD andthe refinance rate, has been reduced from interest andfinancial charges and shown as accrued interest.
6. Other receipts includes ̀ 78.49 crore (` 54.49 crore)received/receivable from GoI towards administration chargeson providing refinance under interest subvention schemeto SCBs and RRBs, for financing Seasonal AgriculturalOperations.
7. Government of India advised the bank that theshort term loans extended by the Long Term Co-operativeCredit Structure (LTCCS) are not covered under the interestsubvention scheme. Accordingly, the bank had refunded asum of ` 11.80 crore to the Central Government in May,2012. As this amount has been identified for refund at thetime of audit, the same has been fully provided for, whileaccounting the results for the financial year 2011-12.
8. An amount of ` 4.29 crore chargeable as penalinterest on account of default in repayment by MPSCARDBhas been waived during the year.
9. Investments in Government securities include thefollowing securities pledged with Clearing Corporation ofIndia Limited as collateral security for Business segments:
(` in crore)
Particulars Face Value Book Value
Pledged for Business 35.00 34.08Segment (Securities) (55.00) (54.81)
Pledged for Business Segment 2071.00 2044.06(Collateralised Borrowing and (2257.00) (2208.63)Lending Obligation)
10 Interest at the rate of 6.00% (6.00%) per annumon unutilised balances of RIF, Watershed Development Fund,KfW NB IGWDP–(Andhra Pradesh, Gujarat, Maharashtraand Rajasthan) and KfW NB IX Adivasi DevelopmentProgramme has been credited to respective funds based onrespective agreements. Further, interest at the rate of 6.57%(8.80%) per annum on unutilised balances of Micro FinanceDevelopment and Equity Fund, Cattle DevelopmentProgramme (Uttar Pradesh & Bihar), and Multi ActivityApproach for Poverty Alleviation (MAPA) BAIF– (Sultanpurand Rae Bareli), Financial Inclusion Fund and FinancialInclusion Technology Fund has been credited to therespective funds. The said interest is calculated based onthe mid-month average outstanding of the respective funds.
11. The expenditure recoverable from Government ofIndia / international agencies as per Schedule-14 of balancesheet amounting to ` 28.76 crore includes debit balance ofvarious funds viz. IGWDP Maharashtra (` 7.25 crore),IGWDP Gujarat (` 0.88 crore), IGWDP Rajasthan (` 2.96crore), IGWDP Andhra Pradesh (` 5.85 crore), IFADPriyadarshini (` 1.72 crore), Revival Reform Restructuringof Handloom package (` 10.00 crore), NE council fund formiscellaneous training (` 0.10 crore) which were shown asdebit balances in Schedule-4 in the respective funds in theprevious year.
12. The Provision for Pension is made after consideringthe employer’s contribution to PF maintained with RBI asper the records available with the Bank as on 31 March 2012.
13. The Bank, during the year, in accordance with AS22 “Accounting for taxes on Income”, recognized in the Profitand Loss account the difference of ` 162.00 crore betweennet deferred tax assets of ` 71.15 crore and ` 233.15 croreas at 31 March 2012 and 31 March 2011 respectively, asdetailed below:
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(` in crore)
Sr. Deferred Tax Assets 31 March 31 MarchNo. 2012 2011
1 Provision for Retirement 49.65 181.18Benefits made in the books butallowable for tax purposes onpayment basis
2 Depreciation on Fixed Assets 21.50 21.77
3 Amortisation of G Sec 0.00 30.20
Total 71.15 233.15
14. Provision for Deferred Tax on account of SpecialReserve created u/s 36(1)(viii) of the Income Tax Act, 1961,is not considered necessary, as the Bank has decided not towithdraw the said reserve.
15. ‘Land’ and ‘Premises’ include ` 34.77 crore(` 29.88 crore) paid towards Office Premises and StaffQuarters for which conveyance is yet to be completed.
16. Pursuant to the directives of RBI, the project loansprovided to SCARDBs by way of subscription to the SpecialDevelopment Debentures (SDDs) floated by these agencies,are treated as under:
a) classified as Investments and shown in Schedule – 11under the head ‘Debenture and Bonds’.
b) Interest earned on the same is shown as a part of‘Interest received on Loans and Advances’ in the Profitand Loss Account, treating them as ‘deemed advances’.
c) Deemed Advances for the purpose of IRAC norms,capital adequacy and computation of ratios etc.
d) The value of Allotment Letters / Debenture Scrips, yetto be received, as at the year end, aggregates to NIL (`238.15 crore)
17. The bank with effect from 2 September 2011, hasdecided to provide financial support to SCARDBs in theform of refinance loans, instead of subscribing to the SpecialDevelopment Debentures floated by them.
18. The tax liability of the bank for the Assessment Year2002-03 amounting to ` 373.15 crore was assessed by theIncome Tax department and fully paid by the bank. However,the bank has filed an appeal against the taxability ofNABARD for the AY 2002-03 with Income Tax AppellateTribunal.
19. The net impact due to change in accounting policyas per para 12.6 of part-A of the schedule was as under:
19.1 Net Effect on Revenue A/c due to change inCapitalisation Policy
(` in crore)
Amount that would have been chargedto Revenue A/c as per PreviousCapitalisation Policy (Depreciation onitems under Computer Installations, F&F& Other CIOE which would have beencapitalised, and cost of Software)
Amount taken to Revenue A/c as per NewCapitalisation Policy (Cost of items underComputer Installations, F&F & OtherCIOE which are charged to Revenue A/c, and Depreciation on Software whichis capitalised)
Net Effect inRevenue A/c dueto change in Policy
19.2 Impact due to change in Depreciation rate:
An amount of ` 0.22 crore was additionally charged asdepreciation in the current year for assets purchased in earlieryears (2009-10 and 2010-11) for items under Computerand Communication devices and electrical installations, dueto change in Depreciation rate.
20. The salaries and allowances for the year amountingto ` 442.63 crore was arrived at after deduction of excessprovision of ` 5.33 crore towards salary arrears.
21. Disclosure required under AS 15(Revised) on “Employee Benefits” is as under:
21.1 Defined Benefit Plans
Employees Retirement Benefit plans of the bank includePension, Gratuity and Leave Encashment, which are definedbenefit plans. The present value of obligation is determinedbased on actuarial valuation using the Projected Unit CreditMethod, which recognizes each period of services as givingrise to additional unit of employee benefit entitlement andmeasures each unit separately to build up the final obligation.
Computer 0.97 2.92 1.95F&F 0.19 0.93 0.74Other CIOE 0.35 1.73 1.38Software 5.61 1.87 -3.74
Total 7.12 7.45 0.33
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a. Reconciliation of opening and closing balances of defined benefit obligations:
(` in crore)
Particulars Pension Gratuity LeaveEncashment
Present value of defined benefit obligation atthe beginning of year 1223.03 (958.76) 242.57 (221.20) 144.88 (117.63)
Current Service Cost 33.42 (22.76) 17.53 (16.90) 3.77 (6.54)
Interest Cost 100.90 (79.10) 20.01 (18.25) 11.95 (9.70)
Actuarial gain/ loss 283.32 (207.42) -8.61 (8.16) 4.42 (17.67)
Benefits paid -83.80 (-45.01) -31.82 (-21.94) -11.99 (-6.66)
Present value of defined benefitsobligations at the year end 1556.87 (1223.03) 239.68 (242.57) 153.03 (144.88)
b. Amount recognized in the Balance Sheet as on 31 March 2012:
(` in crore)
Particulars Pension Gratuity Leave Encashment(Partly Funded) (funded) (Funded)
Present value of defined benefits obligationsas at the year end 1556.87(1223.03) 239.68 (242.57) 153.03 (144.88)
Fair value of plan assets as at the year end 1311.25 (288.11) @ 260.82 (227.85) 137.14 (143.66) $
Liability recognized in the Balance sheetas at the year end 245.63 (934.92) -21.14* (14.72) 15.89 (1.22)
@ Includes the Bank’s contribution of ` 363.79 crore (` 288.11 crore) towards PF for pension optees available with RBI.
$ Represents the amount invested with Insurance companies towards the liability for Leave Encashment.
* Negative amount is shown as other assets under Schedule-14
c. Expenses recognized in the Profit and Loss Account during the year:
(` in crore)
Particulars Pension Gratuity LeaveEncashment
Current Service Cost 33.42 (22.76) 17.53 (16.90) 3.77 (6.54)
Interest Cost 100.90 (79.10) 20.01 (18.25) 11.95 (9.70)
Net Actuarial gain/ loss 220.54 (172.83) -8.65 (8.16) 12.12 (17.67)
Expected return on Plan Assets -37.10 (0.00) -21.62 (-16.92) -13.17 (-12.26)
Expense recognized in the statement of Profit & Loss 317.76 (274.69) 7.27 (26.39) 14.67 (21.65)
d. Actuarial assumptions:
Particulars Pension Gratuity LeaveEncashment
Mortality Table (LIC) 1994-96 (Ultimate) 1994–96 (Ultimate) 1994–96 (Ultimate)
Discount rate (per annum) 8.75% (8.25%) 8.75% (8.25%) 8.75% (8.25%)
Salary growth (per annum) 5.50% (4.00%) 5.50% (7.00%) 5.50% (7.00%)
Withdrawal rate 1.00% (1.00%) 1.00% (1.00%) 1.00% (1.00%)
126
21.2 The estimates of rate of escalation in salaryconsidered in actuarial valuation, take into account inflation,seniority, promotion and other relevant factors includingsupply and demand in the employment market.
21.3 The aforesaid liabilities include liabilities ofemployees deputed to subsidiaries.
21.4 The above information is certified by the actuary andthe provision for pension is recognized in the profit and lossaccount after considering the outstanding balance of theBank’s contribution to the Provident Fund of pension optees.
21.5 The income of ̀ 22.78 crore recognized during theyear 2011-12 on investments earmarked towards leaveencashment includes the overall impact for the financial years2010-11 and 2011-12.
21.6 Defined Contribution Plan:
The bank contributes a defined sum of 10% on the basicsalary for both pension optees and non pension optees everymonth towards Provident Fund. The contribution made forthe pension optees forms part of the plan assets of pensionscheme. The total contribution charged to Profit and Lossaccount during the year is ` 12.68 crore (` 11.87 crore)
22. During the year 2011-12 the bank has createdNABARD Pension Fund Trust and transferred a sum of` 934.44 crore being the provisions for pension held in thebooks of the bank as on 31 March 2011 to the Trust.
23. In the opinion of the Bank’s management, there isno impairment to assets to which AS 28 – “Impairment ofAssets” applies requiring any provision.
24. The movement in Contingent Liability as requiredin AS 29 “Provisions, Contingent Liabilities and ContingentAssets” is as under:
(` in crore)
Particulars 2011-12 2010-11
Opening Balance 0.00 3.37
Addition during the year 0.24 0.00
Deletion during the year 0.00 3.37
Closing Balance 0.24 0.00
25. Prior period items included in the Profit and Lossaccount are as follows:
(` in crore)
Sr. Particulars 2011-12 2010-11No.
1 Depreciation 0.00 2.8952. Revenue Expenditure 5.27 0.00
Total 5.27 2.895
26. Capital adequacy ratio of the Bank as on 31 March2012 was 20.55% (21.76%) as against a minimum of 9%as stipulated by RBI.
27. Investments in Mutual Funds are as under: (` in crore)
Sr. Name of the As at 31 March 2012 As at 31 March 2011No Mutual Fund No. of Book Market No. of Book Market
units Value Value units Value Value
1 Kotak Mahindra 0 0 0 31178095.5170 50.01 50.012 ICICI Prudential 0 0 0 2069242.3680 30.01 30.013 Canara Robeco 0 0 0 25172008.7263 30.01 30.014 IDFC 0 0 0 25159975.5110 30.01 30.015 UTI–Money Market 0 0 0 310661.2930 50.01 50.016 Tata 0 0 0 276239.8430 50.01 50.017 DWS 0 0 0 2356602.6900 30.01 30.018 SBI 0 0 0 19254837.7780 30.01 30.019 IDBI 0 0 0 285224.8670 30.01 30.0110 Peerless 0 0 0 28065186.0720 30.01 30.0111 Taurus 0 0 0 284381.6460 30.01 30.01
Total 0 0 0 390.11 390.11
127
28. As per the information available with the Bank,there are no dues payable under Micro, Small and MediumEnterprises Development Act 2006.
29. The following additional information is disclosedin terms of RBI circular No.RBI/2011–12/68DBOD.No.FID.FIC.2/01.02.00/2011–12 dated 01 July2011.
29.1 Capital(a) Capital to Risk–weighted Assets Ratio
(CRAR)
(Percent)
Particulars 31 March 31 March2012 2011
CRAR 20.55 21.76
Core CRAR 19.42 20.43
Supplementary CRAR 1.13 1.33
(b) Subordinated Debt(` in crore)
Particulars 31 March 2012 31 March 2011Amount of subordinateddebt raised and outstanding Nil Nilas Tier II Capital
(c) Risk weighted assets (` in crore)
Particulars 31 March 2012 31 March 2011
On – Balance Sheet Items 80736.44 63515.55
Off – Balance Sheet Items 19.44 20.30
(d) Pattern of Capital contribution as onthe date of the Balance Sheet:
NABARD has received an amount of ` 1000 crore fromGovernment of India vide their letter no. F.No.20/16/2010-AC dated 30 March 2012 towards Share Capital.Consequent to this the shareholding of Government ofIndia and RBI in the Paid up capital of NABARD as on 31March 2012 was at 99.33% : 0.67% as per details givenbelow.
(` in crore)
Contributor 31 March 2012 31 March 2011
Reserve Bank of India 20.00 0.67% 20.00 1.00%
Government of India 2,980.00 99.33% 1,980.00 99.00%
Total 3000.00 100.00% 2,000.00 100.00%
29.2 Asset Quality and Credit Concentration
(a) Net NPA position
Particulars 31 March 31 March2012 2011
Percentage of Net NPAs to
Net Loans & Advances 0.02249 0.02136
(b) Asset classification(` in crore)
2011-12 2010-11
Classification Amount (%) Amount (%)
Standard 165174.11 99.945 139459.40 99.950
Sub-standard 22.19 0.013 0.00 0.000
Doubtful 68.21 0.041 68.13 0.049
Loss 1.02 0.001 1.02 0.001
Total 165265.53 100.000 139528.56 100.000
(c)Provisions made during the year
(` in crore)
Provisions against 2011-12 2010-11
Standard Assets 78.74 0.00
Non Performing Assets 14.87 32.90
Investments (Net) 30.44 1.93
Income Tax 455.00 460.00
Total 579.05 494.83
(d) Movement in Net NPAs
(` in crore)
Particulars 2011-12 2010-11
(A) Net NPAs as atbeginning of the year 29.83 32.72
(B) Add: Additions during the year 7.32 19.44
(C) Sub-total (A+B) 37.15 52.16
(D) Less: Reductions during the year 0.00 22.33
(E) Net NPAs as atthe end of the year (C-D) 37.15 29.83
Note: Net NPA includes ` 0.07 crore (` 0.04 crore) relating to staffadvances.
128
(e) Credit exposure as percentage to Capital Funds and as percentage to Total Assets
Category 2011-12 2010-11Credit Exposure as % to Credit Exposure as % to
Capital Funds Total Assets Capital Funds Total Assets
I Largest Single Borrower 91.60 8.35 128.67 11.08
II Largest Borrower Group Not Applicable Not Applicable
III Ten Largest Single Borrowers for the year 331.83 30.24 378.64 32.59
IV Ten Largest Borrower Groups Not Applicable Not Applicable
(f) Credit exposure to the five largest industrial sectors as percentage to total loan assets: Not Applicable
29.3 Liquidity
Maturity pattern of Rupee Assets and Liabilities and Maturity pattern of Foreign Currency Assets and Liabilities
(` in crore)
Sr. Item Less than More than More than More than More than Total #No or equal to 1 year upto 3 years upto 5 years upto 7 years
1 year 3 years 5 years 7 years
1 Rupee Assets 82177.97 45084.24 34177.67 15242.53 4660.17 181342.58(68088.65) (40360.96) (31910.59) (13478.17) (4410.44) (158248.82)
2 Foreign currency assets 0.00 0.00 0.00 0.00 0.00 0.00(0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Total Assets 82177.97 45084.24 34177.67 15242.53 4660.17 181342.58(68088.65) (40360.96) (31910.59) (13478.17) (4410.44) (158248.82)
3 Rupee Liabilities 29159.71 57562.03 32583.53 25013.99 36520.54 180839.80(36715.00) (39438.72) (29124.49) (18524.70) (33943.27) (157746.17)
4 Foreign currency liabilities 39.88 79.77 79.77 34.78 268.58 502.78(39.92) (79.75) (79.74) (64.82) (238.42) (502.64)
Total Liabilities 29199.59 57641.80 32663.30 25048.77 36789.12 181342.58(36754.92) (39518.47) (29204.23) (18589.52) (34181.69) (158248.81)
# Net of provision made as per RBI directives on Standard Assets as well as for diminution in value of Investments aggregatingto ` 732.63 (` 623.45 crore)
29.4 Operating results
Particulars 2011-12 2010-11(a) Interest income as a percentage to average working funds 6.53 6.22(b) Non interest income as a percentage to average working funds 0.07 0.10(c) Operating profit as a percentage to average working funds 1.44 1.25(d) Return on average Assets (%) 0.98 0.88(e) Net Profit per Employee (Rs. in crore) 0.36 0.27
29.5 Movement in the provisions(a) Provision for Non Performing Assets (Loan Assets)
(` in crore)Particulars 2011-12 2010-11Opening balance as at the beginning of financial year 39.39 32.00Add: Provision made during the year 14.87 23.73Less: Write off, write back of excess provision 0.00 16.34Closing balance at the close of financial year 54.26 39.39
129
(b) Provision for depreciation in investments
(` in crore)
Particulars 2011-12 2010-11
A Opening balance as atthe beginning of the financial year 3.37 1.44
B Add
(i) Provisions made during the year 31.74 2.08
(ii) Appropriation, if any, fromInvestment FluctuationReserve Account during the year 0.00 0.00
C Sub Total [A+B (i)+B (ii)] 35.11 3.52
D Less
(i) Write off / Write back ofexcess provision 1.30 0.15
(ii) Transfer, if any, to InvestmentFluctuation Reserve Account 0.00 0.00
Sub Total [D] 1.30 0.15
E Closing balance as atthe close of financial year (C-D) 33.81 3.37
29.6 Restructured accounts
During the current financial year, five loan accountsoutstanding to the extent of ` 788.25 crore (includingloans to MPSCARDB-outstanding ` 770.60 crore) havebeen rescheduled. All the said five loans are classified asStandard Asset and an additional provision at the rate of1.6% has been made on these assets as per RBI guidelines.As per IRAC norms provisions for ` 51.37 crore has beenmade during 2011-12 towards sacrifice in interest elementon restructuring of MPSCARDB.
29.7 Assets sold to securitisation company /reconstruction company: NIL (NIL)
29.8 Forward Rate Agreements andInterest Rate Swaps : NIL (NIL)
29.9 Interest Rate Derivatives: NIL (NIL)
29.10 Investments in Non Government DebtSecurities: NIL (NIL)
29.11 Corporate Debt Restructuring (CDR)
There are no loan accounts subjected to CorporateDebt Restructuring during the current year.
29.12 Disclosure on risk exposure inDerivatives
The Bank does not trade in derivatives. However, it hashedged its l iability towards borrowings from KfWGermany to the extent of 93.63 million Euro and interestthereon for the entire loan period. Consequent uponhedging of foreign currency borrowings the same is shownat contracted value as per the Swap agreement. The Bankdoes not have any open exposure in foreign currency.
The value of outstanding principal amount of hedgecontract at the year-end exchange rate stood at ` 632.33crore and the value of outstanding principal liability inthe books of account stood at contracted value i.e.` 502.77 crore. The quantitative disclosure in this regardis as under:
(` in crore)
Sr. Particulars Currency Interest RateNo. Derivatives Derivatives
1 Derivatives(Notional Principal amount)
A) For Hedging 632.33 NA(592.10)
B) For Trading NA NA
2 Marked to Market Positions [1]
a) Asset (+) 129.55 NA(89.45)
b) Liability (-) (0.00) NA
3 Credit Exposure [2] 109.41 NA
4 Likely impact of one percentagechange in interest rate (100*PV01)
a) on hedging derivatives 8.70@ NA
b) on trading derivatives NA NA
5 Maximum and Minimum of100*PV01 observed during the year
a) on hedging NA NA
b) on trading NA NA
@ If MIBOR rate decrease by 100 bps across tenure MTM gain would be
reduced by ` 8.70 crore
29.13 Exposures where the FI hadexceeded prudential exposure limits duringthe year: NIL (NIL)
130
29.14 Related Party Transactions
As the Bank is state controlled enterprise within the
meaning of AS-18 "Related Party Transactions", the details
of the transactions with other state controlled enterprises
are not given.
List of Related Parties:Key Management Personnel:
1. Shri U. C. Sarangi - Ex-Chairman2. Shri Rakesh Singh - Ex-Chairman3. Dr. Prakash Bakshi - Chairman4. Dr. K G Karmakar - Ex-Managing Director
(` in crore)
Name of the Party Nature of Nature of Amount of OutstandingRelationship Transaction transaction
during the year
Shri U. C. Sarangi Key Management Remuneration 0.082 0.00Personnel- Ex-Chairman including perquisites
Shri Rakesh Singh Key Management Remuneration 0.020 0.00Personnel- Ex-Chairman including perquisites
Dr. Prakash Bakshi Key Management Remuneration 0.107 0.00Personnel-Chairman including perquisites
Dr. K G Karmakar Key Management Personnel- Remuneration 0.119 0.00Ex- Managing Director including perquisites
No amounts, in respect of the related parties have been written off/back, or provided for during the year.
Related party relationships have been identified by the management and relied upon by the auditors.
29.15 Issuer categories in respect of investments made (` in crore)
Sr. Issuer Amount Investment 'Below 'Unrated' 'Unlisted'No. made investment Securities Securities
through grade' heldprivate Securities
placement held
(1) (2) (3) (4) (5) (6) (7)
1 PSUs 180.27 154.13 - 80.25 77.88(80.34) (79.13) (19.13) (79.13)
2 FIs 123.00 123.00 - 48.00 48.00(123.00) (123.00) (0.00) (48.00)
3 Banks 0.09 - - 0.09 -(0.00) (0.00)
4 Private Corporate 216.00 216.00 - 16.00 16.00(150.00) (150.00) (0.00) (0.00)
5 Subsidiaries/Joint ventures 41.37 41.37 - 41.37 41.37(23.80) (23.80) (23.80) (23.80)
6 Others (Net of Provision) 3100.47 25.92 - 25.92 3100.47including Mutual Funds (2262.47) (10.35) (10.35) (2262.47)
7 Provision held towards depreciation 3.19 - - 0.59 0.59(3.37) (0.00) (3.37)
Total 3658.01 560.42 0.00 211.04 3283.13(2636.24) (386.28) (0.00) (53.28) (2410.03)
131
29.16 Non performing investments: NIL(NIL)
29.17 Disclosure on Repo transactions: NIL (NIL)
29.18 Concentration of Deposits, Advances,Exposure and NPAs
(a) Concentration of Deposits
(` in Crore)
2011-12 2010-11
Total Deposits of twenty largest 85859.17 73761.25depositors
Percentage of Deposits of twenty 90.00% 89.00%largest depositors toTotal Deposits of the Bank
(b) Concentration of Advances(` in Crore)
2011-12 2010-11
Total Advances to twentylargest borrowers 86213.95 75077.75
Percentage of Advances to twenty 52.24% 53.81%largest borrowers toTotal Advances of the Bank
(c) Concentration of Exposure
(` in Crore)
2011-12 2010-11
Total Exposure to twenty largestborrowers/ customers 87413.95 75077.75
Percentage of Exposure to twenty 50.88% 50.32%largest borrowers/customers toTotal Exposure of the bank onborrowers/customers
(d) Concentration of NPAs
(` in Crore)
2011-12 2010-11
Total Exposure to Top four NPA accounts 57.40 50.71
29.19 Sector-wise NPAs
Sr. Sector Percentage of NPAsNo to Total Advances
in that sector
2011-12 2010-11
1 Agriculture and allied activities 0.00 0.00
2 Industry (Micro & Small, Medium and Large) 72.35 54.46
3 Services 0.00 0.00
4 Personal Loans-Staff Loans 0.06 0.02
29.20 Movement of Gross NPAs
(` in Crore)
Particulars 2011-12 2010-11
Gross NPAs as on 1st April of
par ticular year (Opening Balance) 69.19 50.73
Additions (Fresh NPAs) during the year 22.23 25.70
Sub-total (A) 91.42 76.39
Less:-
(i) Upgradations 0.00 5.40
(ii) Recoveries (excluding recoveriesmade from upgraded accounts) 0.00 1.84
(iii) Write-offs 0.00 0.00
Sub-total (B) 0.00 7.24
Gross NPAs as on 31st March offollowing year (closing balance) (A-B) 91.42 69.19
29.21 Overseas Assets, NPAs and Revenue:NIL (NIL)
29.22 Off-balance sheet SPVs sponsored(which are required to be consolidatedas per accounting norms): NIL (NIL)
29.23 Information on Business Segment
(a) Brief Background
The Bank has recognized Primary segments as under:
i) Direct Finance: Includes Loans given to stategovernments for rural infrastructure development, co-finance loans and loans given to voluntary agencies/
132
(b) Information on Primary Business Segment
(` in crore)
Direct Finance Refinance Treasury Unallocated Total
Segment Revenue 4,401.32 5,198.78 1,346.02 32.38 10978.50(4,085.61) (4,086.49) (943.24) (86.68) (9,202.01)
Segment Results 246.37 1,638.63 1302.00 -935.03 2251.97(268.69) (1,567.59) (912.21) (-924.63) (1,823.86)
Total carrying amount of 71,728.35 94,696.77 13,226.02 2,424.07 1,82,075.21Segment Assets (66,409.32) (74,643.27) (15,316.71) (2,502.96) (1,58,872.26)
Total carrying amount of 76190.61 84520.54 291.17 21,072.89 1,82,075.21Segment Liabilities (68,908.87) (69,320.39) (266.47) (20,376.54) (1,58,872.26)
Other Items:
Cost to acquire Segment 0.00 0.00 0.00 18.16 18.16Assets during the year (0.00) (0.00) (0.00) (18.22) (18.22)
Amor tization & Depreciation 0.00 0.00 0.00 21.22 21.22(0.00) (0.00) (0.00) (22.58) (22.58)
Non Cash Expenses 15.13 129.62 -0.80 129.34 273.29(32.90) (-0.08) ( -0.05) (100.21) (132.98)
(c) Since the operations of the Bank are confined to India only there is no reportable secondary segment.
30. Figures in brackets pertain to previous year.
31. Previous year's figures have been regrouped / rearranged wherever necessary.
As per our attached report of even dateP. Parikh & AssociatesChartered AccountantsFRN . 107564W
Ashok Rajagiri K. S. PadmanabhanPartner Chief General ManagerM No.046070 Accounts DepartmentMumbai Mumbai : 26 May 2012Date : 26 May 2012
Prakash Bakshi H R Khan Dipankar Gupta M L SharmaChairman Director Director Director
non-governmental organisations for developmentalactivities.
ii) Refinance: Includes Loans and Advances given toState Governments, Commercial Banks, LandDevelopment Banks, State Coop. Banks, RegionalRural Banks etc. as refinance against the loansdisbursed by them to the ultimate borrowers.
iii) Treasury: Includes investment of funds in treasurybills, short-term deposits, government securities, etc.
iv) Unallocated: Includes income from staff loans andother miscellaneous receipts and expenditureincurred for the developmental role of the bank andcommon administrative expenses.
133
National Bank for Agriculture and Rural DevelopmentCash Flow for the year ended 31 March 2012 (` in thousands)
Particulars 2011-2012 2010-2011
(a) Cash flow from Operating activitiesNet Profit as per Profit and Loss a/c before tax 2251,96,93 1823,86,02Adjustment for: Depreciation 21,22,00 22,57,98Provisions and Amortisations -80,00 2,78,34Provision for Non performing Assets 14,87,23 32,90,00Provision for Standard Assets 78,74,00 0Provision for sacrifice in interest element of Restructured Loan 51,37,00 -8,00Profit / Loss on sale of Fixed Assets 12,58 4,64Interest credited to various Funds(including addition/ adjustment made to Interest Differential Fund) 139,38,43 118,36,63Other Expenses 0 0Income from Investment (including Discount Income) -1346,02,32 -938,79,85Expenditure from various Funds -3283,28,78 -5492,54,83Operating profit before changes in operating assets -2072,42,94 -4430,89,07Adjustment for net change in: Current Assets 2133,68,93 -373,55,50Current Liabilities 799,07,04 681,46,96Increase in Loans and Advances(Including Housing Loan & Other Advances to Staff -25661,77,32 -19035,55,28Cash generated from operating activities -24801,44,29 -23158,52,90Payment of Income Tax -426,74,97 -539,24,46
Net cash flow from operating activities (A) -25228,19,26 -23697,77,35
(b) Cash flow from Investing activities Income from Investment (including Discount Income) 1346,02,33 943,23,85Increase / Decrease in Fixed Asset -16,91,56 -17,39,41Increase / Decrease in Investment 2,84,72 -2087,23,63Net cash used / generated from investing activities (B) 1331,95,49 -1161,39,19
(c)Cash flow from financing activities
Grants / contributions received 1848,88,70 3925,65,16Proceeds of Bonds 11795,64,80 6783,83,37Increase / Decrease in Borrowings -3352,80,70 2503,49,41Increase / Decrease in Deposits 12621,07,70 12780,65,51Share capital 1000,00,00 0
Net cash raised from financing activities (C) 23912,80,50 25993,63,45
Net increase in cash and cash equivalent (A)+(B)+(C ) 16,56,73 1134,46,91Cash and Cash equivalent at the beginning of the year 1762,80,65 628,33,75
Cash and cash equivalent at the end of the year 1779,37,38 1762,80,66
1. Cash and cash equivalent at the end of the year includes : 2011-2012 2010-2011
Cash in hand 9 7Balance with Reserve Bank of India 1168,79,91 38,85,26Balances with other Banks in India 379,62,31 801,32,40Remittances in Transit 2,54 694,44,37Inter fund transfer 0 0Collateralised Borrowing and Lending Obligations 230,92,53 228,18,56
Total 1779,37,38 1762,80,66
Previous year’s figures have been regrouped/ rearranged to confirm to the current year’s presentation, wherever necessary.
As per our attached report of even dateP. Parikh & AssociatesChartered AccountantsFRN . 107564W
Ashok Rajagiri K. S. PadmanabhanPartner Chief General ManagerM No.046070 Accounts DepartmentMumbai Mumbai : 26 May 2012Date : 26 May 2012
Prakash Bakshi H R Khan Dipankar Gupta M L SharmaChairman Director Director Director
134
Consolidated Balance Sheet
Profit and Loss Account
&
Cash Flow
of
NABARD
&
its Subsidiaries(NABCONS, ADFT, ABFL, NABFINS)
2011-2012
135
P. Parikh & Associates
HO : 501, Sujata, off Narsi Natha Street, Mumbai - 400 009,Tel : 23443549, 23437853, Fax : 23415455,
Website : www.pparikh.com
Chartered Accountants
Auditors' Report on Consolidated Financial StatementsTo the Board of DirectorsNATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
1. We have examined the attached Consolidated Balance Sheet of NATIONAL BANK FOR AGRICULTURE AND RURALDEVELOPMENT (the ‘Bank’) and its Subsidiaries as at March 31, 2012, the Consolidated Profit & Loss Account and theConsolidated Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are theresponsibility of the Bank’s management. Our responsibility is to express an opinion on these financial statements based on ouraudit.
2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are prepared, in allmaterial respects, in accordance with an identified financial reporting framework and are free of material misstatement. Anaudit also includes assessing the accounting principles used and significant estimates made by the management as well asevaluating overall financial statements. We believe that our audit provides a reasonable basis of our opinion.
3. We did not carry out the audit of financial statements of subsidiaries of the Bank. The total Assets and total Revenues in respectof these subsidiaries are ` 353.65 crore and ` 46.90 crore respectively. The financial statements in respect of two subsidiariesviz., Agri Development Finance (Tamil Nadu) Ltd. and NABARD Financial Services Ltd., being unaudited, any adjustments totheir balances could have consequential effects on the attached Consolidated Financial Statements, the impact of which is notascertained. These financial statements have been certified by the managements of the respective subsidiary companies andhave been furnished to us. In our opinion, in so far as it relates to the amounts included in respect of the Subsidiaries inConsolidated Financial Statements is based solely on such management certified financial statements.
4. We report that the Consolidated Financial Statements have been prepared by the Bank in accordance with the requirements ofAccounting Standard (AS) 21 “Consolidated Financial Statements” issued by the Institute of Chartered Accountants of Indiaand on the basis of the separate audited/certified financial statements of the Bank and its Subsidiaries included in the consolidatedfinancial statements.
5. We report that on the basis of the information and explanations given and on the consideration given of separate audited/certified financial statements of the Bank and its Subsidiaries and subject to our comment in Para 3 above, we are of theopinion that the said consolidated financial statements give a true and fair view in conformity with the accounting principlesgenerally accepted in India.
i. in the case of the Consolidated Balance Sheet, of the state of affairs of the Bank as at March 31, 2012;
ii. in the case of the Consolidated Profit and Loss Account of the consolidated results of operations of the Bank for the yearended on that date; and
iii. in the case of the Consolidated Cash Flow Statement, of the consolidated cash flows of the Bank for the year ended onthat date.
Place: Mumbai For and on behalf ofDate: May 26, 2012 P. Parikh & Associates
Chartered AccountantsFirm Registration No. 107564W
Ashok RajagiriPartner,
Membership No.: 046070
136
National Bank for Agriculture and Rural Development Consolidated Balance Sheet as on 31 March 2012
(` in thousands)
Particulars As on 31.03.2012 As on 31.03.2011
FUNDS AND LIABILITIES
Capital 3000,00,00 2000,00,00
Reserve Fund and Other Reserves 13442,36,69 11888,71,64
National Rural Credit Funds 16058,00,00 16045,00,00
Funds Out of Grants received from International Agencies 139,20,78 138,89,56
Gifts Grants, Donations and Benefactions 657,95,94 2601,94,77
Other Funds 4157,17,24 3431,47,40
Minority Interest 32,09,12 21,69,85
Deposits 95397,75,23 82776,67,53
Bonds and Debentures 38582,89,64 26787,24,84
Borrowings 4328,48,39 7681,29,09
Current Liabilities and Provisions 6349,96,46 5605,55,85
TOTAL FUNDS AND LIABILITIES 182145,89,50 158978,50,53
PROPERTY AND ASSETS
Cash and Bank Balances 8673,66,91 10881,89,37
Investments 18168,55,91 19305,80,92
Advances 152593,77,37 126031,30,66
Fixed Assets 225,83,24 229,99,83
Other Assets 2484,06,07 2529,49,75
TOTAL PROPERTY AND ASSETS 182145,89,50 158978,50,53
As per our attached report of even dateP. Parikh & AssociatesChartered AccountantsFRN . 107564W
Ashok Rajagiri K. S. PadmanabhanPartner Chief General ManagerM No.046070 Accounts DepartmentMumbai Mumbai : 26 May 2012Date : 26 May 2012
Prakash Bakshi H R Khan Dipankar Gupta M L SharmaChairman Director Director Director
137
National Bank for Agriculture and Rural Development Consolidated Profit and Loss Account for the year ended 31 March 2012
(` in thousands)
2011-12 2010-11
Income: Interest Received on Loans and Advances 9516,42,24 8170,20,18
Income from Investment operations 1354,73,85 946,91,62
Discount Received 0 0
Other Receipts 139,32,23 107,08,08
TOTAL INCOME 11010,48,33 9224,19,88
Expenditure: Interest and Financial Charges 7530,76,44 6194,38,06
Establishment and other expenses 1045,79,85 1135,57,54
Depreciation 21,34,47 22,67,16
Provisions 145,20,03 35,79,92
TOTAL EXPENDITURE 8743,10,79 7388,42,68
Profit before Income Tax 2267,37,54 1835,77,20
Provision for Income Tax 459,04,55 463,67,98
Deferred Tax Asset Adjustment 161,93,99 84,93,30
Profit after Tax 1646,39,00 1287,15,92
Share of Profit / Loss in Subsidiaries attributable to Minority Interest 2,13,27 88,93
Profit available for Appropriation 1644,25,73 1286,26,99
Appropriations: Profit as above 1644,25,73 1286,26,99
Add: Withdrawals from various funds against expenditure 69,30,30 202,67,59debited to Profit & Loss Account
Total Profit Available for Appropriation 1713,56,03 1488,94,58
Transferred to: Special Reserve u/s 36(I)(viii) of the Income Tax Act, 1961 310,00,00 360,00,00
National Rural Credit (Long Term Operations) Fund 10,00,00 50,00,00
National Rural Credit (Stabilisation) Fund 1,00,00 10,00,00
Co-operative Development Fund 5,35,40 6,05,32
Research & Development Fund 20,65,30 17,67,49
Investment Fluctuation Reserve 27,15,42 116,07,65
Producers’ Organization Development Fund 0 50,00,00
Rural Infrastructure Promotion Fund 0 25,00,00
Financial Inclusion Technology Fund 45,00,00 10,00,00
Farmers Technology Transfer Fund 2,73,85 2,34,20
Farm Innovation and Promotion Fund 44,56,36 33,55,54
MFDEF Reserve Fund 0 0
Reserve Fund 1247,09,69 808,24,38
Total 1713,56,03 1488,94,58
138
Additional Notes to Consolidated Accounts
1. Consolidation has been done pursuant to the listing agreement with stock exchange.
2. Financial statement in respect of Agri Development Finance (Tamilnadu) Ltd. and NABARD Financial Services Ltd. are unaudited.3. Details of the subsidiaries:
Name of the Subsidiary Country of Incorporation Proportion of Ownership
Agri Development Finance (Tamilnadu) Ltd. India 52.10
Agri Business Finance (AP) Ltd. India 47.82*
NABARD Financial Services Limited India 61.71
NABARD Consultancy Pvt. Ltd. India 100
*NABARD controls the Board of Directors of Agri Business Finance (AP) Ltd. and hence considered as a subsidiary.
4. The financial statements of the company and its subsidiary companies are combined on a line to line basis by adding together expensesafter fully eliminating intra-group balances and intra-group transactions in accordance with Accounting Standard – (AS) – 21 – “ConsolidatedFinancial Statement”.
5. Depreciation on fixed asset is provided on Written Down Value Method (WDV), at the rates specified in Schedule XIV to the CompaniesAct, 1956 by Agri Development Finance (Tamilnadu) Ltd and Agri Business Finance (AP) Ltd., whereas NABARD Financial Services providedStreight Line Method (SLM) at the rates specified in Schedule XIV to the Companies Act, 1956 on prorata basis. Thus the Accounting Policyfollowed by subsidiaries for depreciation are different from the Accounting Policy for depreciation followed by NABARD in the preparation ofConsolidated Financial Statements. Thus out of the total depreciation of Rs. 21.34crore (22.67 crore) included in the Consolidated FinancialStatement, 0.13 % (0.14%) of that amount is determined based on depreciation provided by following WDV / SLM at the rates as specified inSchedule XIV to the Companies Act, 1956.
6. Income on foreign assignments by NABCONS is accounted on “receipt” basis. The amount of such fees receivable is not material.
7. Disclosures as required under AS-17 “Segment Reporting” in consolidated financial statements are as under:(` in crore)
Financial Year 2011-12 Direct Finance Refinance Treasury Unallocated Total(Consolidated)
Segment Revenue 4412.77 (4090.85) 5198.78 (4086.49) 1346.02 (943.24) 52.91 (103.63) 11010.48 (9224.20)
Segment Results 252.21 (271.38) 1638.63 (1567.59) 1302.00 (912.21) -925.46 (-915.41) 2267.38 (1835.77)
Total carrying amount ofSegment Assets 71768.21 (66434.55) 94696.77 (74643.27) 13226.02 (15316.71) 2454.89 (2583.97) 182145.89 (158978.51)
Total carrying amount ofSegment Liabilities 76230.47 (68934.10) 84520.54 (69320.39) 291.17 (266.47) 21103.71 (20457.56) 182145.89 (158978.51)
Other Items :
Cost to acquire SegmentAssets during the year - - - 18.42 (18.54) 18.42 (18.54)
Amortization & Depreciation 0.08 (0.06) 0.00 (0.00) 0.00 (0.00) 21.26 (22.61) 21.34 (22.67)
Non Cash Expenses(other than above) 15.98 (33.10) 129.62 (-0.08) -0.80 (-0.05) 129.34 (100.21) 274.14 (133.18)
Note: There are no reportable secondary segments for the bank and its subsidiaries
8. Previous Year figures have been regrouped / rearranged wherever necessary
As per our attached report of even date
P. Parikh & AssociatesChartered AccountantsFRN . 107564W
Ashok Rajagiri K. S. PadmanabhanPartner Chief General ManagerM No.046070 Accounts Department MumbaiMumbai Mumbai : 26 May 2012Date : 26 May 2012
Prakash Bakshi H R Khan Dipankar Gupta M L SharmaChairman Director Director Director
139
National Bank for Agriculture and Rural DevelopmentConsolidated Cash Flow Statement for the year ended 31 March 2012
(` in thousands)
Particulars During 2011-12 During 2010-11
(a) Cash flow from Operating Activities Net profit as per P & L a/c before tax 2266,99,31 1835,77,20Depreciation 21,34,47 22,67,16Provisions and Amortisations -31,23 2,78,34Provision for Non performing Assets 14,87,45 32,90,00Provision for Standard Assets 79,53,55 0Provision for Sacrifice in interest element of restructured loan 51,37,00 -8,00Interest credited to various funds 139,38,43 118,36,63Other expenses 0 0Income from Investment -1346,02,32 -938,79,85Profit / Loss on sale of Fixed Asset 12,58 4,64Expenditure from various funds -3283,28,78 -5492,54,83Operating profit before working capital changes -2055,99,56 -4418,88,71Adjustment for net change in: Current Assets 2126,04,74 -377,80,87Current liabilities 746,43,46 717,32,21Increase/Decrease in Loans and Advances -25803,53,80 -19087,50,88Cash generated from operating activities -24987,05,16 -23166,88,25Payment towards Income tax -431,06,93 -541,65,19
Net cash flow from operating activities (A) -25418,12,09 -23708,53,44
(b) Cash flow from Investing Activities Income from Investment 1346,02,32 943,23,85Increase / Decrease of Fixed Assets -17,27,32 -17,72,70Increase / Decrease in Investments 2,74,03 -2087,33,45
Net cash used in investing activities (B) 1331,49,03 -1161,82,30
(c) Cash flow from Financing Activities Proceeds of Bonds / Shares 11821,71,62 6793,53,37Increase / Decrease in Borrowings -3174,99,77 2555,88,70Increase / Decrease in Deposits 12557,92,51 12762,20,26Grants / contributions received 1848,86,90 3925,65,06Dividend paid 999,30,27 -58,30Net cash raised from financing activities (C) 24052,81,52 26036,69,09Net increase in cash and cash equivalent (A)+(B)+(C) -33,81,54 1166,33,35Cash and cash equivalent at the beginning of the period 1815,57,69 649,24,34
Cash and cash equivalent at the end of the period 1781,76,15 1815,57,69
Cash and cash equivalent at the end of the period includes : 2011-12 2010-11
Cash in hand 4,04 10Balance with Reserve Bank of India 1168,79,91 38,85,26Balances with other Banks in India 381,97,13 854,09,40Remittances in Transit 2,54 694,44,37Collateralised Borrowing and Lending Obligations 230,92,53 228,18,56
Total 1781,76,15 1815,57,69
As per our attached report of even date
P. Parikh & AssociatesChartered AccountantsFRN . 107564W
Ashok Rajagiri K. S. PadmanabhanPartner Chief General ManagerM No.046070 Accounts DepartmentMumbai Mumbai : 26 May 2012Date : 26 May 2012
Prakash Bakshi H R Khan Dipankar Gupta M L SharmaChairman Director Director Director
140
E-mail Addresses of NABARD Head Office Departments at Mumbai
Chairman's Secretariat [email protected]
Executive Director (S.K. Mitra)'s Secretariat [email protected]
Executive Director (V. Ramakrishna Rao)'s Secretariat [email protected]
Accounts Department [email protected]
Business Initiatives Department [email protected]
Central Vigilance Cell [email protected]
Corporate Communication Department [email protected]
Corporate Planning Department [email protected]
Department of Core Banking Solutions [email protected]
Department of Economic Analysis & Research [email protected]
Department of Information Technology [email protected]
Department of Premises, Security & Procurement [email protected]
Department of Supervision [email protected]
Development Policy Department-Farm Sector [email protected]
Development Policy Department-Non-Farm Sector [email protected]
Finance Department [email protected]
Financial Inclusion Department [email protected]
Human Resources Management Department [email protected]
Inspection Department [email protected]
Institutional Development Department [email protected]
Investment Credit Department [email protected]
Law Department [email protected]
Micro Credit Innovations Department [email protected]
Nabcons [email protected]
Production Credit Department [email protected]
Rajbhasha Prabhag [email protected]
Secretary's Department [email protected]
State Projects Department [email protected]
Telephone Nos.
Reception : 022-26539895/96/99
Protocol & Security : 022 - 26539046
141
Regional Offices / Cell / Training Establishments
REGIONAL OFFICES
ANDAMAN & NICOBARNABARD ComplexVIP RoadPort Blair - 744 103Tel No. : (03192) 233308, 242180Fax No. : (03192) 237696E-mail : [email protected]
ANDHRA PRADESH1-1-61, RTC Cross RoadsMusheerabadHyderabad - 500 020Tel No. : (040) 27685555, 27612651Fax No. : (040) 27611829E-mail : [email protected]
ARUNACHAL PRADESHBank Tinali, VIP Road, TT MargOpposite State Bank of IndiaItanagar - 791 111Tel No. : (0360) 2215967,09436040732Fax No. : (0360) 2212675E mail : [email protected]
ASSAMOpposite Assam SecretariatG.S. Road, Post Box No.1Dispur, Guwahati - 781 006Tel No. : (0361) 2235661
2238004 to 025Fax No. : (0361) 2235657E mail : [email protected]
BIHARMaurya Lok ComplexBlock ‘B’, 4th & 5th floorDak Bungalow RoadPatna - 800 001Tel No. : (0612) 2223985Fax No. : (0612) 2238424E mail : [email protected]
CHHATTISGARH1st & 2nd Floor, Pithalia ComplexK.K. Road, Fafadih ChowkRaipur - 492 009Tel No. : (0771) 2888496/99Fax No. : (0771) 2884992E mail : [email protected]
GOAThird floor, Nizari BhavanMenezes Braganza RoadPanaji - 403 001Tel No. : (0832) 2220490, 2430504Fax No. : (0832) 2223429E mail : [email protected]
GUJARATNABARD TowerOpp. Municipal GardenUsmanpuraAhmedabad - 380 013Tel No. : (079) 27552257-59Fax No. : (079) 27551584E mail : [email protected]
HARYANAPlot No.3, Post Box No. 7Sector - 34 'A'Chandigarh - 160 022Tel No. : (0172) 5046703, 5046728Fax No. : (0172) 2604033E mail : [email protected]
HIMACHAL PRADESHNABARD Bhavan, Block No. 32S.D.A. Complex, KasumptiShimla - 171 009Tel No. : (0177) 2624373
2624379Fax No. : (0177) 2622271E-mail : [email protected]
JAMMU & KASHMIRB-II, 4th South BlockBahu Plaza Complex, P.B. No. 2Jammu - 180 012Tel No. : (0191) 2472355, 2472620Fax No. : (0191) 2472337E mail : [email protected]
JHARKHANDOpp. Adivasi College HostelKaramptoli RoadRanchi - 834 001Tel No. : (0651) 2361107Fax No. : (0651) 2361108E-mail : [email protected]
KARNATAKA113/1, Jeevan Prakash AnnexeJ.C. Road, P. B. No. 29Bengaluru - 560 002Tel No. : (080) 22225241/44Fax No. : (080) 22222148E mail : [email protected]
KERALAPunnen Road, StatueP. B. No. 220Thiruvananthapuram - 695 001Tel No. : (0471) 2323859Fax No. : (0471) 2324358E mail : [email protected]
MADHYA PRADESHE-5, Arera Colony, Bittan MarketRavishankar Nagar Post OfficeBhopal - 462 016Tel No. : (0755) 2463341/69
2466695Fax No. : (0755) 2466188E mail : [email protected]
MAHARASHTRA54, Wellesley RoadPost Box No. 5, Shivaji NagarPune - 411 005Tel No. : (020) 25541083
25542090Fax No. : (020) 25542250E-mail : [email protected]
MANIPURLeiren MansionOpposite Lamphel SupermarketLamphelpat, Imphal - 795 004Tel No. : (0385) 2410706, 2416192Fax No. : (0385) 2416191E-mail : [email protected]
MEGHALAYA'U' Pheit Kharmihpen BuildingPlot No.28(2), 2nd & 3rd FloorDhankheti, Shillong - 793 003Tel No. : (0364) 2221602, 2503499
2501518Fax No. : (0364) 2227463E mail : [email protected]
MIZORAMRamhlun Road (North)BawngkawnAizawl - 796 014Tel No. : (0389) 2343428, 2305290Fax No. : (0389) 2340815E mail : [email protected]
NAGALANDNSCB Head Office AdministrativeBldg, 4th Floor, West WingKhermahal, Circular RoadDimapur - 797 112Tel No. : (03862) 234063, 235600
235601Fax No. : (03862) 227040E-mail : [email protected]
NEW DELHINABARD Tower24 Rajendra PlaceNew Delhi - 110 125Tel No. : (011) 25818733
25721723Fax No. : (011) 41539187
41539185E mail : [email protected]
ORISSA'Ankur', 2/1, Nayapalli Civic CentreBhubaneswar - 751 015Tel No. : (0674) 2553884Fax No. : (0674) 2552019E mail : [email protected]
PUNJABPlot No.3, Sector 34-APost Box No. 7Chandigarh - 160 022Tel No. : (0172) 5046700, 5046701Fax No. : (0172) 5046702E mail : [email protected]
RAJASTHAN3, Nehru PlaceTonk Road, Post Bag No. 104Jaipur - 302 015Tel No. : (0141) 2740821, 2743416Fax No. : (0141) 2742161E mail : [email protected]
142
TRIPURAPalace Compound (East)Uzirbari Road, Post Box No.9Agartala - 799 001Tel No. : (0381) 2302378Fax No. : (0381) 2224125E mail : [email protected]
UTTAR PRADESH11, Vipin KhandGomti NagarLucknow - 226 010Tel No. : (0522) 2304530Fax No. : (0522) 2304531E mail : [email protected]
CELL
SRINAGAR
Opp. Amar Singh College Gate
Gogji Bagh
Srinagar - 190 008
Tel No. : (0194) 2310280
Fax No. : (0194) 2310479
TRAINING ESTABLISHMENTS
BOLPURBankers Institute of Rural DevelopmentNABARD, Bolpur LodgeBolpur – 731 204Birbhum (West Bengal)Tel No. : (03463) 252812, 252783Fax No.: (03463) 252295E-mail : [email protected]
LUCKNOWBankers Institute of Rural DevelopmentSection 'H', L.D.A. ColonyKanpur RoadLucknow - 226 012Tel No. : (0522) 2421 954 / 137 / 187Fax No.: (0522) 2421 006 /176 / 047E mail : [email protected]
SIKKIMOm Nivas, Church RoadPost Box No. 46Gangtok - 737 101Tel No. : (03592) 203015, 204173Fax No. : (03592) 204062E mail : [email protected]
TAMIL NADU48, Mahatma Gandhi RoadPost Box No.6074, NungambakkamChennai - 600 034Tel No. : (044) 28276088, 28304444Fax No. : (044) 28275732E mail : [email protected]
UTTARAKHAND113/2, Hotel Sunrise Building2nd & 3rd Floor, Post Bag No.139Rajpur RoadDehradun - 248 001Tel No. : (0135) 2748611Fax No. : (0135) 2748610E mail : [email protected]
WEST BENGAL‘Abhilasha’, 2nd floorPost Box No.9083, 6, Royd StreetKolkata - 700 016Tel No. : (033) 22552255, 22667943Fax No. : (033) 22494507E-mail : [email protected]
MANGALOREBankers Institute of Rural DevelopmentNABARD, Post Box No. 1117Manjusha BuildingAbove Automatrix ShowroomNear KSRTC Bus StandBejai Church RoadBejai, Mangalore - 575 004Tel No. : (0824)2225836, 2225844Fax No.: (0824)2225835E mail : [email protected]
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LIST OF ABBREVIATIONS
AA Administrative Approval
AS Accounting Standards
AAGR Average Annual Growth Rate
AAY Antyodaya Anna Yopjana
A & N Islands Andaman & Nicobar Islands
ABCI Associated Business Communicators ofIndia
ACABC Agri Clinic and Agri Business Centres
ACB Audit Committee of the Board
ACE APRACA Centre of Excellence
ACSTI Agriculture Co-operative Staff TrainingInstitute
ADFC Agriculture Development FinanceCompany
ADWDRS Agricultural Debt Waiver and Debt ReliefScheme, 2008
AEPS Aadhar Enabled Payment Service
AEZ Agricultural Export Zone
AFC Agricultural Finance Corporation Ltd.
AFPRO Action for Food Production
AgDSM Agriculture Demand Side Management
AGMARKNET Agricultural Marketing InformationNetwork
AH Animal Husbandry
AIBP Accelerated Irrigation Benefit Programme
AIDIS All India Debt and Investment Survey
ALCO Asset Liability Management Committee
ALM Asset Liability Management
AMI Agriculture Marketing Infrastructure
AML Anti-Money Laundering
APB Aadhar Payment Bridge
APCOB-CTI Andhra Pradesh State CooperativeBank-Cooperative Training Institute
APMC Agricultural Produce Market Committee
APRACA Asia-Pacific Rural and Agricultural CreditAssociation
ARWIND Assistance to Rural Women in Non-FarmDevelopment
ASP Application Service Provider
ATM Automated Teller Machine
ATS Application Tracker System
BADP Border Area Development Programme
BAIF Bharatiya Agro Industries Foundation
BC Business Correspondents
BCM Billion Cubic Meters
BDP Business Development Plan
BF Business Facilitators
BKGB Bihar Kshetriya Gramin Bank
BIRD Bankers Institute of Rural Development
BMCU Bulk Milk Chilling Unit
BNB Bhavishya Nirman Bonds
BoS Board of Supervision
BPL Below Poverty Line
C-PEC Centre for Professional Excellence inCooperatives
CAC Concurrent Audit Cell
CAGR Compound Annual Growth Rate
CARE Credit Analysis & Research Limited
CAS Common Accounting System
CAT Capacity Building for Adoption ofTechnology
CB Commercial Banks
CBLO Collateralised Borrowing and LendingObligation
CBP Capacity Building Phase
CBS Core Banking Solution
CCB Central Co-operative Bank
C-DAC Centre for Development of AdvancedComputing
CDF Co-operative Development Fund
CDP Cattle Development Project
CER Certified Emission Reduction
CERFI Centre of Excellence for Rural FinancialInstitutions
CES Community Enterprise System
144
CFSA Committee on Financial Sector Assessment
CGTMSE Credit Guarantee Fund Trust for Microand Small Enterprises
CIBIL Credit Information Bureau (India) Limited
CIP Central Issue Price
CISS Capital Investment Subsidy Scheme
CLA Central Loan Assistance
CLMAS Centralised Loan Accounting andManagement System
CMA Credit Monitoring Arrangement
CMIE Centre for Monitoring of Indian Economy
CMR Centre for Micro-finance Research
CPI Consumer Price Index
CPI-AL Consumer Price Index for AgriculturalLabour
CPIO Central Public Information Offices
CPI-RL Consumer Price Index for Rural Labour
CPIS Coconut Palm Insurance Scheme
CRAR Capital to Risk-Weighted Assets Ratio
CRIDA Central Research Institute for DrylandAgriculture
CRISIL Credit Rating Information Services ofIndia Limited
CRR Cash Reserve Ratio
CS Capital Support/Company Secretary
CSA Co-operative Societies Act
CSP Customer Service Provider
CTFC Certified Trainer in Financial Cooperatives
CTI Co-operative Training Institute
CUC Carcass Utilisation Centre
CV Coefficient of Variation
CVC Central Vigilance Cell
CWC Central Water Commission
DADI District Agricultural Development Index
DAHDF Department of Animal Husbandry,Dairying and Fisheries
DAP Di-Ammonium Phosphate/Development Action Plan
DCCB District Central Co-operative Bank
DDM District Development Manager
DDSD Demand Driven Skill Development
DEDS Dairy Entrepreneurship DevelopmentScheme
DLMRC District Level Monitoring and ReviewCommittee
DLT District Level Trainers
DMI Directorate of Marketing and Inspection
DPR Detailed Project Reports
DRDA District Rural Development Agency
DRIP District Rural Industries Project
DTL Demand and Time Liabilities
DTP Development of Tribal Population
DVCF Dairy Venture Capital Fund
EC Extension Counter
FC Farmers’ Clubs/Financial Co-operation
FCI Food Corporation of India
FDI Foreign Direct Investment
FIF Financial Inclusion Fund
FIMMDA Fixed Income Money Market andDerivatives Association of India
FINO Financial Information Network &Operations Ltd.
FIP Full Implementation Phase
FIPF Farm Innovation and Promotion Fund
FITF Financial Inclusion Technology Fund
FIU-IND Financial Intelligence Unit - India
FLCC Financial Literacy and CreditCounselling Centres
FR Flash Reports
FRC Farmers’ Resource Centre
FRL Full Reservoir Level
FSR Feasibility Study Report
FSS Farmers’ Service Societies
FTRDC Farmers’ Training and RuralDevelopment Centres
FTTF Farmers’ Technology Transfer Fund
GAAP Generally Accepted Accounting Policies
GCC General Credit Card
145
GCF Gross Capital Formation
GDP Gross Domestic Product
GDS Gross Domestic Savings
GIZ Deutsche Gesellschaft fur InternationaleZusammenarbeit
GLC Ground Level Credit
Ha hectare
HFT Held for Trading
HPC High Power Committee
HRMS Human Resource Management System
HTM Held to Maturity
HWG Handloom Weavers’ Groups
IARI Indian Agricultural Research Institute
IAS Indian Administrative Service
IBPS Institute of Banking Personnel Selection
ICAI Institute of Chartered Accountants of India
ICM Institutes of Cooperative Management
ICRA Investment Information and CreditRating Agency of India
ICRISAT-WWF International Crops Research Institute forthe Semi-Arid Tropics - World WideFund for Nature
ICT Information and CommunicationsTechnology
IDRBT Institute for Development & Research inBanking Technology
IEC Information, Education, Communication
IES Indian Economic Service
IFAD International Fund for AgricultureDevelopment
IGWDP Indo-German Watershed DevelopmentProgramme
IHDS Integrate Handloom DevelopmentScheme
IIBM Indian Institute of Bank Management
IIM Indian Institute of Management
IIMPS Invest India Micro-Pension Services
INM Integrated Nutrient Management
IIT Indian Institute of Technology
IMF International Monetary Fund
IPDSS Institutional Protection and DepositSafety Scheme
IPM Integrated Pest Management
IR Inspection Reports
IRDA Insurance Regulatory and DevelopmentAuthority
IRR Internal Rate of Return
IRV Individual Rural Volunteers
ISAP Indian Society of Agri-business Professionals
ISEC Institute for Social and Economic Change
ISMW Indian School of Micro-Finance for Women
ISRO-VSAT Indian Space Research Organisation -Very Small Aperture Terminal
ISS Investment Specific Studies
ITI Integrated Training Institute
IWDP Integrated Watershed DevelopmentProgramme
JCC Joint Consultative Committee
JLG Joint Liability Group
JLTC Junior Level Training Centres
JNNSM Jawaharlal Nehru National Solar Mission
KADFC Karnataka Agriculture DevelopmentFinance Company Ltd.
KCC Kisan Credit Card
KfW Kreditanstalt fur Wiederaufbau(German Development Bank)
KVIC Khadi and Village Industries Commission
KVK Krishi Vigyan Kendras
KYC Know Your Customer
LABS Livelihood Advancement Business School
LAMPS Large-sized Adivasi Multipurpose Society
LBSNAA Lal Bahadur Shastri National Academyof Administration
LPA Long Period Average
LT Long Term
LTCCS Long Term Co-operative Credit Structure
LWE Left Wing Extremism
MAAPA Multi-activity Approach for PovertyAlleviation
146
MACS Mutually Aided Co-operative Societies
MDMI Manpower Development & ManagementInstitute
MEDP Micro-Enterprise Development Programme
MF Micro-Finance
MFDEF Micro-finance Development and Equity Fund
MFI Micro Finance Institution
MIS Management Information System/MarketIntervention Scheme
MMS Mandal Mahila Samakhya
MMTC Minerals and Metals Trading Corporation
MNAIS Modified National Agricultural InsuranceScheme
MNRE Ministry of New and Renewable Energy
MoA Ministry of Agriculture/Memorandum ofAgreement
MOP Muriate of Potash
MoSPI Ministry of Statistics and ProgrammeImplementation
MoT Ministry of Textiles
MoU Memorandum of Understanding
MPLADS Member of Parliament Local AreaDevelopment Scheme
MPKV Mahatma Phule Krishi Vidyapeeth
MRP Maximum Retail Price
MSP Minimum Support Price
MSTP Million Shallow Tubewell Programme
MT Medium Term / Metric Tonne
MU Mother Units
Nabcons NABARD Consultancy Services Pvt. Ltd.
NABFINS NABARD Financial Services Ltd.
NAFSCOB National Federation of State CooperativeBanks
NAIS National Agricultural Insurance Scheme
NBFC Non-Banking Finance Company
NBS Nutrient Based Susidy
NCCT National Council for Cooperative Training
NCOF National Centre of Organic Farming
NEDFi North Eastern Development FinanceCorporation Ltd.
NER North-Eastern Region
NFS Non-Farm Sector
NFSM National Food Security Mission
NGO Non-Governmental Organisation
NHM National Horticulture Mission
NIDA NABARD Infrastructure DevelopmentAssistance
NIMC National Implementing and MonitoringCommittee
NIRB National Institute of Rural Banking
NLUP New Land Use Policy
NMCP National Manufacturing CompetitivenessProgramme
NMMI National Mission on Micro Irrigation
NPA Non Performing Asset
NPCI National Payments Corporation of India
NPDP National Pulses DevelopmentProgramme
NPOF National Project on Organic Farming
NPRI National Programme on RuralIndustrialisation
NPS New Pension System
NPW Net Present Worth
NR Natural Rubber
NRC(LTO) National Rural Credit(Long Term Operations)
NRMC Natural Resources Management Centre
NRC(Stab.) National Rural Credit (Stabilisation)
ODI Organisational Development Initiative
OMSS Open Market Sale Scheme
OPP Oilseeds Production Programme
OSS Off-site Surveillance System
OSAO Other than Seasonal Agricultural Operations
PACS Primary Agricultural Credit Societies
PARFI PanIIT Alumni Reach for India
PAT Profit After Tax
PBT Profit Before Tax
PCARDB Primary Co-operative Agriculture andRural Development Bank
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PDAI Primary Dealers Association of India
PDS Public Distribution system
PEC Project Equipment Corporation
PFRDA Pension Fund Regulatory &Development Authority
PGDRB Post Graduate Diploma in Rural Banking
PIA Project Implementing Agency
PLP Potential Linked Credit Plan
PMU Programme Management Unit
POS Point of Sale
PPID Pilot Project for Integrated Developmentof Backward Blocks
PODF Producer Organisation Development Fund
PPP Public Private Partnership
PRI Panchayat Raj Institution
PUCB Primary Urban Co-operative Bank
PVCF Poultry Venture Capital Fund
PVI Preventive Vigilance Inspections
RBI Reserve Bank of India
RASS Rashtriya Seva Samiti
RCMB Risk Management Committee of the Board
RCS Registrar of Co-operative Societies
RDBS Rural Development Banking Service
REDP Rural Entrepreneurship DevelopmentProgramme
RDA Rural District Association
RFA Revolving Fund Assistance
RFI Rural Financial Institutions
RFIP Rural Financial Institutions Programme
RGCT Rajiv Gandhi Charitable Trust
RGMVP Rajiv Gandhi Mahila Vikas Pariyojana
RICM Regional Institute of CooperativeManagement
RIDF Rural Infrastructure Development Fund
RIPF Rural Infrastructure Promotion Fund
RIF Rural Innovation Fund
RLP Realistic Lending Programme
RML Reuters Market Light
RMCB Risk Management Committee of the Board
RNFS Rural Non-Farm Sector
RRB Regional Rural Bank
RSVY Rashtriya Sam Vikas Yojana
RTC Regional Training College
RTI Right to Information
RUDSETI/R-SETI Rural Development and SelfEmployment Training Institute
R&D Research and Development
SAO Seasonal Agricultural Operations
SAS Situation Assessment Survey
SAU State Agricultural University
SBLP SHG-Bank Linkage Programme
SBPC Standardised Banking Programme forCo-operatives
SCARDB State Co-operative Agriculture and RuralDevelopment Bank
SCB State Co-operative Bank
SCC Swarojgar Credit Card
SDC Swiss Agency for Development andCooperation
SDD Special Development Debentures
SDP Skill Development Programmes
SEWA Self Employed Womens’ Association
SFAC Small Farmers Agribusiness Consortium
SF/MF Small Farmers/Marginal Farmers
SFP State Focus Paper
SGSY Swarnjayanti Gram Swarozgar Yojana
SHG Self Help Group
SHLS Solar Home Lighting System
SHPI Self Help Promoting Institution
SIDBI Small Industries Development Bankof India
SLIC State Level Implementation Committee
SLR Statutory Liquidity Ratio
SLSMC State Level Sanctioning and MonitoringCommittee
SLTF State Level Task Force
SMS Short Messaging Service
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SNTS Special Non-Transferability Scheme
SOFTCOB Scheme of Financial Assistance forTraining of Co-operative Banks Personnel
SPA Special Programme Assistance
SPV Special Purpose Vehicles
SRI System of Rice Intensification
SRTO Small Road Transport Operators
SS Special Studies
SSI Sustainable Sugarcane Initiative
STCCS Short Term Co-operative Credit Structure
STCRC Fund Short Term Co-operative RuralCredit (Refinance) Fund
STD Short Term Deposit
ST(SAO) Short Term (Seasonal AgriculturalOperations)
ST(OSAO) Short Term (Other than SeasonalAgricultural Operations)
SWC State Warehousing Corporation
SWOT Strength, Weakness, Opportunities,Threats
TANGEDCO Tamil Nadu Generation and DistributionCompany
TC Technical Component
TDF Tribal Development Fund
TE Training Establishment
TFO Total Financial Outlay
TMB Term Money Borrowings
TMT Top Management Team
TPDS Targeted Public Distribution System
ToR Terms of Reference
UIDAI Unique Identification Authority of India
UNDP United Nations DevelopmentProgramme
UPNRM Umbrella Programme on NaturalResources Management
USAID US-Agency for InternationalDevelopment
USQ Unstarred Question
UT Union Territory
VA Voluntary Agency
VC Video Conferencing
VDP Village Development Programme
VSAT Very Small Aperture Terminal
VWC Village Watershed Committee
WAN Wide Area Network
WBCIS Weather Based Crop Insurance Scheme
WDC Women Development Cell
WDF Watershed Development Fund
WPI Wholesale Price Index
WSHG Women Self Help Group
ZoC Zone of Consideration
