**Executive Summary**
This document provides the response to Unstarred Question No. 2371 in Lok Sabha on December 15, 2025, regarding NABARD funds in Karnataka. It explains the mechanism for fund allocation through Priority Sector Lending (PSL) and details the schemes and loans sanctioned by NABARD to Karnataka over the past three years. The document also addresses skill development initiatives supported by NABARD.
**Key Points / Main Content**
* **Fund Allocation Mechanism:**
* Priority Sector Lending (PSL) targets are set by the RBI for banks to ensure credit flow to critical sectors.
* NABARD receives funds from the PSL shortfall corpus, which it then allocates to states.
* Reduced PSL shortfall due to improved bank performance has led to rationalized fund allocation, including reduced allocation to Short Term Seasonal Agricultural Operations (ST(SAO)) funds for Karnataka.
* **NABARD Schemes:**
* NABARD implements various schemes for agricultural and rural development, including refinance for rural financial institutions, Direct Refinance Assistance, NABARD Infrastructure Development Assistance (NIDA), Rural Infrastructure Development Fund (RIDF), Food Processing Fund (FPF), Warehouse Infrastructure Fund (WIF), and Tribal Development Fund (TDF).
* Eligibility criteria for these schemes are based on scheme guidelines.
* **Loans to Karnataka (2022-2025):**
* Details of loans sanctioned to the Government of Karnataka by NABARD for the past three years are provided in Annexure I, including figures for:
* Total Long Term Refinance.
* Total Short Term Refinance.
* Direct Refinance Assistance (DRA) (Cooperative Banks).
* NABARD Infrastructure Development Assistance (NIDA).
* Rural Infrastructure Development Fund (RIDF).
* Micro Irrigation Fund (MIF).
* Warehouse Infrastructure Fund (WIF).
* **Skill Development Initiatives:**
* NABARD supports skill development and entrepreneurship among rural youth and women.
* Programmes include Skill Development and Entrepreneurship among Rural Youth (SDERY), Micro Enterprise Development Programme (MEDP) for Women Self Help Group (SHG) members and Livelihood and Enterprise Development Programme (LEDP) for Women SHG Members.
* NABARD does not maintain a fixed allocation specifically for skill development training programmes, but considers proposals based on eligibility, relevance, and demand.
**Impact Analysis**
**Government of Karnataka**
* **Impact:** The Government of Karnataka is impacted by the reduced fund allocation from NABARD due to the decrease in PSL shortfall. They are also recipients of loans under various NABARD schemes for agricultural and rural development.
* **Action Required:** The Government of Karnataka needs to adapt to the reduced funding by optimizing the utilization of available funds and potentially seeking alternative funding sources. Also, can submit proposals for skill development projects based on the mentioned criteria.
**Rural Financial Institutions (Banks, Cooperatives)**
* **Impact:** Impacted by NABARD schemes providing refinance to enable them to offer lending in rural areas.
* **Action Required:** Align lending strategies with NABARD schemes to boost rural lending.
**Rural Population (Farmers, Rural Youth, Women SHG Members)**
* **Impact:** Affected by the availability of loans and skill development programmes supported by NABARD.
* **Action Required:** Leverage the benefits of the schemes and programmes to uplift themselves.
Key Entities Referenced
NABARD: National Bank for Agriculture and Rural Development; receives PSL shortfall corpus from banks and implements various schemes.
Karnataka: Indian state receiving NABARD funds and subject of question regarding fund allocation.
Priority Sector Lending (PSL): A type of lending target allotted to banks, from which NABARD receives allocations in case of shortfall.
NABARD Scheme: A general reference to schemes implemented by NABARD for agricultural and rural development.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION NO. 2371
ANSWERED ON MONDAY, 15 DECEMBER, 2025/ 24 AGRAHAYANA, 1947 (SAKA)
NABARD Funds in Karnataka
2371. SHRI KOTA SRINIVASA POOJARY:
Will the Minister of FINANCE be pleased to state:
(a) whether it is a fact that there are complaints of less funds being released through the
NABARD Scheme in the State of Karnataka, if so, the details thereof;
(b) the criteria /guidelines for NABARD Scheme;
(c) the types of projects which are eligible for NABARD loan facility;
(d) the details of loans released by NABARD to the State of Karnataka during the last three
years for promoting sustainable and equitable agriculture and rural development;
(e) the details of Schemes launched by NABARD for skill development; and
(f) the steps taken by NABARD to increase the amount of fund allocated for skill development
training?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) to (d): In order to ensure adequate flow of credit from the banking system to the sectors of
the economy which are crucial for socio-economic development, Priority Sector Lending (PSL)
targets are allotted to banks by the Reserve Bank of India (RBI). In the event of any shortfall
in achievement of PSL targets by the banks, funds are then allocated to financial institutions
for financing critical sectors. National Bank for Agriculture and Rural Development
(NABARD) receives annual allocations from the PSL shortfall corpus from which it releases
funds to states.
In recent years, due to the improved performance of banks in meeting the target for Priority
Sector Lending, the PSL shortfall corpus has been decreasing.
In view of the reduced PSL shortfall, the allocation under various funds out of PSL was
rationalized, keeping in view the demand of institutions, priorities of the Government and
utilization of funds during previous years. As a result of reduction in allocation to Short Term
Seasonal Agricultural Operations (ST (SAO)) funds, there was reduced fund allocation to
Karnataka by NABARD.NABARD implements various schemes for agricultural and rural development in the country,
which inter-alia include refinance for rural financial institutions (both Short term and Long
term), Direct Refinance Assistance for Cooperative Banks, NABARD Infrastructure
Development Assistance (NIDA) for infrastructure financing, Rural Infrastructure
Development Fund (RIDF), Food Processing Fund (FPF), Warehouse Infrastructure Fund
(WIF), Tribal Development Fund (TDF), etc. The eligibility criteria are decided as per the
scheme guidelines.
The details of loans sanctioned to the Govt. of Karnataka by NABARD for the past three years
are given at Annexure I.
(e) to (f): NABARD supports skill development and entrepreneurship among rural youth and
women through various skill development programmes, such as Skill Development and
Entrepreneurship among Rural Youth (SDERY), Micro Enterprise Development Programme
(MEDP) for Women Self Help Group (SHG) members and Livelihood and Enterprise
Development Programme (LEDP) for Women SHG Members. NABARD does not maintain
any fixed allocation exclusively for skill development training programmes. However, in case
of higher requirement, proposals are considered subject to eligibility, relevance and demand
for those schemes.
*****Annexure I
Statement referred to in part (a) to (d) of Lok Sabha Sabha Un-Starred Question No.
2371 on “NABARD funds in Karnataka” due for answer on 15.12.2025
Details of loans sanctioned by NABARD in the State of Karnataka during past three years
(Amount in ₹ crore)
Product/Scheme 2022-23 2023-24 2024-25
Total Long Term Refinance 9378.1 11479.6 7128.37
Total Short Term Refinance 14726 14726 14313.6
Direct Refinance Assistance (DRA)
532 892.09 1430.71
(Cooperative Banks)
NABARD Infrastructure Development
97.39 1362.27 1020.30
Assistance (NIDA)
Rural Infrastructure Development Fund
1367.76 1727.50 2408.11
(RIDF)
Micro Irrigation Fund (MIF) - 110.23 49.63
Warehouse Infrastructure Fund (WIF) 46.07 - -