Executive Summary:
This document presents the Finance Minister's response to Lok Sabha Starred Question No. 202 regarding funds allocated, sanctioned, and released by NABARD for infrastructural development projects. It details fund allocation through various schemes, including the Rural Infrastructure Development Fund (RIDF), and addresses concerns about fund reduction and equitable distribution. The statement was laid on the Table of the House on August 4, 2025.
Key Points / Main Content:
Funding and Allocation:
NABARD provides loan assistance to State Governments for rural infrastructure projects through funds like RIDF, NIDA, RIAS, LTIF, MIF, FPF, WIF, and FIDF.
RIDF allocation is based on funds from the Reserve Bank of India (RBI) from Priority Sector Lending (PSL) Shortfall.
Other funds are provided based on proposals from State/UT Governments without yearly allocations.
Annexure I provides details of funds allocated, sanctioned, and released under RIDF. Annexure II details amounts sanctioned and disbursed under other funds.
Fund Reduction:
A reduction in the PSL Shortfall fund in FY 2024-25 led to a reduction in RIDF fund allocation.
Andhra Pradesh:
Andhra Pradesh received approximately 5% of the RIDF corpus on average over the past three financial years.
No proposals from Andhra Pradesh are currently pending approval.
Impact of NABARD Support:
NABARD's funding enhances rural infrastructure, increasing productivity and market access.
NABARD provides refinance to Cooperative Banks and Regional Rural Banks (RRBs) for agricultural loans at concessional rates.
The proportion of agricultural households availing credit from institutional sources increased from 60% in 2016-17 to 75% in 2021-22.
Equitable Fund Allocation:
RIDF allocation considers geographical area, rural population, infrastructure development index, Credit Deposit (CD) ratio, and rural credit to address regional disparities.
Borrowing power and utilization of previous RIDF sanctions are also considered.
Farmer Producer Organizations (FPOs):
NABARD has supported the formation of 6215 FPOs through various schemes, including capacity building, credit facilitation, and market linkage support.
NABARD, with SFAC and ONDC, conducted FPO Melas to promote FPO products.
Impact Analysis:
State Governments:
Impact: Receive loan assistance for rural infrastructure development projects and are subject to fund allocation based on various parameters.
Action Required: Submit proposals to NABARD for funding under various schemes (excluding RIDF).
Farmers and Rural Borrowers:
Impact: Benefit from improved rural infrastructure, increased productivity, and better market access. Increased access to credit through institutional sources.
Action Required: Utilize available credit facilities and engage with Farmer Producer Organizations (FPOs) for enhanced market access and support.
NABARD:
Impact: Responsible for allocating, sanctioning, and releasing funds for infrastructure projects.
Action Required: Process proposals promptly, ensure equitable fund distribution, and continue supporting Farmer Producer Organizations (FPOs).
Reserve Bank of India (RBI):
Impact: Provides funds from Priority Sector Lending (PSL) Shortfall, which impacts RIDF allocation.
Action Required: Continue allocating funds from PSL Shortfall to support rural infrastructure development through NABARD.
Key Entities Referenced
National Bank for Agriculture and Rural Development NABARD: A financial institution responsible for allocating funds for infrastructure projects.
Andhra Pradesh: A state in India that is a recipient of NABARD funds and has pending proposals.
Karnataka: A state in India that is a recipient of NABARD funds.
Bihar: A state in India that is a recipient of NABARD funds.
Rural Infrastructure Development Fund RIDF: A fund used by NABARD to extend loan assistance to State Governments for creation of rural infrastructure.
Kisan Credit Card KCC Scheme: A scheme to promote accessibility of credit to farmers.
Union Budget 202526: The annual financial statement of the Government of India for the fiscal year 2025-2026, which includes announcements related to agricultural credit.
Farmer Producer Organisations FPOs: Organizations promoted by NABARD to support farmers through various schemes including capacity building and market linkage.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
STARRED QUESTION NO. *202
ANSWERED ON MONDAY, AUGUST 4, 2025/SRAVANA 13, 1947 (SAKA)
FUNDS FOR INFRASTRUCTURAL DEVELOPMENT PROJECTS BY NABARD
*202. Shri Maddila Gurumoorthy:
Shri Sunil Bose:
Will the Minister of FINANCE be pleased to state:
(a) the details of funds allocated, sanctioned and released by the National Bank for Agriculture
and Rural Development (NABARD) for different categories of infrastructure projects during
the last three years in the country, State/UT-wise including Andhra Pradesh, Karnataka and
Bihar;
(b) whether there is year after year reduction in the allocation of funds and if so, the reasons
therefor;
(c) the way by which the quantum of NABARD assistance to Andhra Pradesh compares with
other States during the said period;
(d) whether any proposals from Andhra Pradesh are currently pending with the
Government/NABARD for approval or fund release along with the steps taken by the
Government in this regard;
(e) whether NABARD’s support has led to improvement in accessibility to credit by the
farmers and reduce the dependency on informal lending and if so, the details thereof;
(f) the steps taken/being taken by NABARD to ensure equitable and timely allocation of funds
to the States for critical infrastructure development; and
(g) whether any new initiative has been undertaken by the NABARD to strengthen farmer-
producer organisations and if so, the details thereof?
ANSWER
THE FINANCE MINISTER
(SMT. NIRMALA SITHARAMAN)
(a) to (g): A statement is laid on the Table of the House.
******Statement referred in reply to parts (a) to (g) of Lok Sabha Starred Question No. *202 to
be answered on 04.08.2025 regarding Funds for Infrastructural Development Projects by
NABARD by Shri Maddila Gurumoorthy and Shri Sunil Bose:
(a): NABARD extends loan assistance to State Governments for creation of rural infrastructure
through various funds i.e. Rural Infrastructure Development Fund (RIDF), NABARD
Infrastructure Development Assistance (NIDA), Rural Infrastructure Assistance to State
Governments (RIAS), Long Term Irrigation Fund (LTIF), Micro Irrigation Fund (MIF), Food
Processing Fund (FPF), Warehouse Infrastructure Fund (WIF) and Fisheries and Aquaculture
Infrastructure Development Fund (FIDF). State/UT wise yearly allocation is made under RIDF
on the basis of funds allocated by Reserve Bank of India (RBI) from Priority Sector Lending
(PSL) Shortfall. Other than RIDF, the support through various funds is provided to States/UTs
on the basis of proposals received from the respective State/UT Governments and no yearly
allocation is made. The details of funds allocated, sanctioned and released under the RIDF by
NABARD to States/UTs during the last three years is given at Annexure I. The details of
amount sanctioned and disbursed to different States/UTs under funds other than RIDF is given
at Annexure II.
(b): The reduction in the Priority Sector Lending (PSL) Shortfall fund in the financial year
2024-25 resulted in consequent reduction in RIDF fund allocation to the States/UTs.
(c) & (d): During the past three financial years, Andhra Pradesh has been allocated an average
of appx. 5% from the RIDF corpus. As informed by NABARD, no proposal from Andhra
Pradesh is currently pending for approval under the above funds.
(e): NABARD’s funding support through the above-mentioned funds enhances rural
infrastructure viz. roads, irrigation, and storage facilities, which lead to increased productivity
and better market access in rural areas. This in turn improves the ability of rural borrowers to
absorb and utilize credit effectively. NABARD also provides short-term & long-term refinance
to Cooperative Banks and Regional Rural Banks (RRBs) for agricultural loans at concessional
rates. As per the findings of NABARD All-India Rural Financial Inclusion Survey (NAFIS)
2021-22, the proportion of agricultural households availing credit from institutional sources
increased from 60% in 2016-17 to 75% in 2021-22.
The Government has also taken various steps to promote accessibility of credit to farmers
which inter-alia include, increase in limit of collateral free loans under the Kisan Credit Card
(KCC) Scheme to ₹ 2 lakh from ₹ 1.6 lakh, inclusion of allied sectors such as animal husbandry
and fisheries under KCC scheme, Interest Subvention (IS) and Prompt Repayment Incentive(PRI) under the Modified Interest Subvention scheme (MISS) which ensure loans upto ₹ 3 lakh
at an effective interest rate of 4 %, etc. In the Union Budget 2025-26, the
Government has announced to enhance loan limit under the MISS from Rs. 3 lakh to Rs. 5 lakh
for loans taken through the KCC.
(f): The State/UT wise allocation of RIDF by NABARD is based on various parameters viz.
geographical area, rural population, composite infrastructure development index, inverse
Credit Deposit (CD) ratio, rural credit, etc. to address regional disparities in infrastructure and
enhance the credit absorption capacity in the rural areas. Further, the borrowing power of
States/UTs and the level of utilization of previous RIDF sanctions are also taken into
consideration to ensure equitable distribution and optimal utilization of the limited allocated
corpus. The proposals received from the respective State/UT Governments are processed
promptly by NABARD and funds are allocated in a timely manner.
(g): NABARD has promoted formation of 6215 Farmer Producer Organisations (FPOs) till
date under various schemes. The major support provided to FPOs inter-alia includes formation
of FPOs, capacity building, credit facilitation and market linkage support, financial literacy,
etc. In addition, NABARD in partnership with Small Farmers’ Agri-Business Consortium
(SFAC) & Open Network for Digital Commerce (ONDC) has conducted FPO Melas
(“TARANG-celebrating Collectivization”) at 50 locations across 24 states/UTs to demonstrate
the products of FPOs/OFPOs to enable the marketing & branding of FPO products.
*****Annexure-I
Statement referred to in part (a) of Lok Sabha Starred Question No. 202 regarding “Funds for
Infrastructural Development Projects by NABARD” due for answer on 04.08.2025
State/UT-wise details of Allocation, Sanction and Disbursement under RIDF during the past three years
– FY 2022-23 to FY 2024-25 (₹ crore)
State/UT Allocation Sanction Disbursement*
Andhra Pradesh 7,029 7,041 4,700
Arunachal Pradesh 1,341 1,370 1,349
Assam 9,161 9,261 7,676
Bihar 6,874 6,806 5,207
Chhattisgarh 4,884 4,914 3,658
Goa 1,734 1,735 1,368
Gujarat 10,742 10,782 9,875
Haryana 5,189 5,153 4,538
Himachal Pradesh 2,811 2,844 2,485
Jammu & Kashmir 3,695 3,785 2,343
Jharkhand 6,396 6,395 5,400
Karnataka 6,222 6,234 5,504
Kerala 2,175 2,186 1,775
Madhya Pradesh 11,016 11,004 9,966
Maharashtra 5,678 5,661 5,017
Manipur 400 409 400
Meghalaya 627 632 633
Mizoram 658 682 679
Nagaland 103 100 100
Odisha 10,537 10,564 10,746
Puducherry 398 364 243
Punjab 2,520 2,572 2,223
Rajasthan 7,529 7,603 6,760
Sikkim 350 345 200
Tamil Nadu 9,677 9,702 9,070
Telangana 2,790 2,789 2,974
Tripura 2,219 2,298 1,700
Uttar Pradesh 8,744 8,740 7,908
Uttarakhand 2,403 2,508 2,158
West Bengal 6,249 6,311 5,938
Total 1,40,153 1,40,789 1,22,595
*Disbursement in some States is higher than sanctioned amount as it also includes the projects sanctioned prior to FY 2022-23Annexure-II
Statement referred to in part (a) of Lok Sabha Starred Question No. 202 regarding “Funds for
Infrastructural Development Projects by NABARD” due for answer on 04.08.2025
State/UT-wise details of Sanction and Disbursement under funds other than RIDF
during the past three years – FY 2022-23 to FY 2024-25 (₹ crore)
State/UT Sanction Disbursement
Andhra Pradesh 2,431.29 285.02
Assam 5,880.76 3,844.21
Chhattisgarh 2,152.03 2.02
Goa 161.06 164.76
Gujarat 4,815.98 2,175.31
Haryana 1,906.40 727.79
Himachal Pradesh 5.00 4.06
Jharkhand 502.34 502.34
Karnataka 1,786.03 4,181.59
Kerala 7,389.83 4,284.66
Madhya Pradesh 678.00 1,543.17
Maharashtra 5,706.56 7,449.09
Manipur* 0.00 6.00
Meghalaya* 0.00 4.30
Mizoram 68.92 60.26
Odisha* 0.00 1,524.46
Punjab 3,218.31 844.40
Rajasthan 7,689.93 1,939.55
Tamil Nadu 1,236.85 5,269.75
Telangana* 0.00 1,145.39
Uttar Pradesh* 0.00 4.15
Uttarakhand 1,300.59 4.06
West Bengal 687.75 473.00
Total 47,617.63 36,439.63
*Disbursement has been made in respect of amount sanctioned prior to FY 2022-23
******