12 Questions
What was the main deficiency of the ARDC according to the Committee's discussions?
Inability to ensure provision of necessary supporting short-term credit
What was enabled by the amendment to the ARDC Act in 1975?
Making direct financing in addition to refinancing
What did the Committee feel was needed at the national level for achieving integration of credit activities in rural development?
A new arrangement
What did the Committee find lacking in the capacity of present national level institutions for rural development?
Adequate resources for integrated rural development
Why was ARDC's support to non-land based activities considered insignificant?
Low priority given to such activities by ARDC
What was required for ARDC to meet the challenges of integrated rural development according to the Committee?
Considerably expanding its developmental role
What was the specific recommendation made by the Sivaraman Committee in its interim report?
Establishment of National Bank for Agriculture and Rural Development (NABARD)
Which of the following was NOT a term of reference governing the Sivaraman Committee's recommendation for NABARD?
Developing urban credit markets
What was the primary focus of the Sivaraman Committee's recommendation regarding credit facilities?
Integrating different levels of credit structures
In what context did the committee propose integrating short-term and medium-term credit structures?
National, state, district, and village levels
What was the key aspect considered in reviewing the role of the Reserve Bank of India (RBI) according to the Sivaraman Committee?
Rural credit
Which institution's structure and operations did the Sivaraman Committee review before recommending NABARD's establishment?
Agricultural Refinance and Development Corporation (ARDC)
Study Notes
NABARD Genesis
- The Sivaraman Committee was set up in March 1979 by the RBI to review arrangements for institutional credit for agriculture and rural development.
- The Committee recommended the establishment of National Bank for Agriculture and Rural Development (NABARD) in its interim report submitted in November 1979.
- The Committee's terms of reference included reviewing the structure and operations of the Agricultural Refinance and Development Corporation (ARDC) and examining the need for integrating short-term and medium-term credit structures with long-term credit structures at national, state, district, and village levels.
Need for a National Bank
- The Committee concluded that a new arrangement was necessary at the national level to achieve the desired focus and thrust towards integration of credit activities in the context of the strategy of integrated rural development.
- The Committee identified deficiencies in the working of ARDC, including its inability to ensure provision of necessary supporting short-term credit for building up earning/repaying capacities to the extent envisaged in the schemes for the ultimate borrowers.
- ARDC's support to non-land based activities had been rather insignificant when viewed in relation to the need for promoting such activities in the context of integrated rural development.
- Despite the amendment to the ARDC Act in 1975 enabling it to make direct financing, no headway could be made in the area of direct financing, and the developmental role assigned to the ARDC was required to be expanded considerably to enable it to meet the challenges of integrated rural development.
Test your knowledge on the genesis, Board of Directors, organizational structure, roles, responsibilities, and mandate of NABARD. Learn about the establishment of NABARD as recommended by the Sivaraman Committee in 1979 and its functions in agriculture and rural development.
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