Infrastructure Support PDF

For Internal Use only 2. Infrastructure Support Infrastructure is the backbone of economic growth f...

For Internal Use only 2. Infrastructure Support Infrastructure is the backbone of economic growth for any nation since it provides the basic physical and organisational structures and facilities needed for the operation of any economy. While productivity enhancement is the key driver to economic growth, good infrastructure, markets that are functioning well, appropriate institutions, and access to technology are the determinants of productivity levels. The Government of India (GoI) and NABARD have initiated several programmes over the years to enhance rural infrastructure facilities in the country. Some of the major initiatives in this regard are as under: 1. Rural Infrastructure Development Fund (RIDF) In the backdrop of declining public investment in agriculture and rural infrastructure, RIDF was instituted in NABARD during 1995-96 with an initial corpus of ₹2,000 crore with the main objective of providing loans to State Governments for completing ongoing rural infrastructure projects. Resources to the fund are contributed by Commercial Banks, in a proportion indicated by RBI, with respect to banks’ shortfall in priority sector lending as a last mile approach for unfinished irrigation, food production, and watershed management. Today, it covers as many as 39 activities, classified under three broad sector, viz., (i) Agriculture and Related sector (ii) Social Sector and (iii) Rural Connectivity. Expanding Corpus RIDF corpus has grown from an initial corpus of ₹2,000 crore in 1995–96 (Tranche I) to ₹40,474.55 crore in 2023-24 (Tranche XXIX). The cumulative allocations during these years has reached to ₹4,98,411 crore (including Bharat Nirman). Tranche Wise Corpus (₹ Crore) 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 VI XXIII II III IV IX XI XII XV XIX XIII XIV XX XXI XXII XXIV XXV XXIX I V X XVIII (incl WH) XVI XVII (incl WH) XXVI XXVII VII XXVIII VIII 11  For Internal Use only Highlights for 2023-24 i. Sanctions under Tranche XXIX As against corpus of ₹40,474.55 crore, total sanctions aggregated to ₹50,116 crore (i.e. 124% of the allocation), under Tranche XXIX as on 31 March 2024. The details of sectoral share are as under: (₹crore) Sector Sanction (2023-24) Share (%) Agriculture Related (including irrigation) 20,750 41 Rural Connectivity 16,742 33 Social Sector 12,624 26 Total 50,116 100 ii. Disbursements The RIDF disbursements aggregated to ₹42,563.92 crore as on 31 March 2024, achieving 123% of the target of ₹34,528 crore. iii. Cumulative Sanctions As against a cumulative corpus of ₹4,98,411 crore, a cumulative loan of ₹5,51,724 crore (including ₹18,500 crore under Bharat Nirman) as on 31 March 2024 has been sanctioned to various State Governments since commencement of RIDF under Tranche I to XXIX. As many as 7.77 lakh projects have been sanctioned under Agriculture and Related (including Irrigation), Rural Connectivity and Social Sector. Purpose-wise sanctions under RIDF (%) 21 30 Irrigation Agri-related Projects Bridges Roads 26 Social Sector Schemes 13 10 The sector-wise analysis of aggregate sanctions under RIDF I to XXIX reveals that Agriculture and Related Sector (including irrigation) accounted for 43% of the total sanctions, followed by 12  For Internal Use only Rural Connectivity (36%) and Social Sector (21%). Irrigation Sector alone accounted for 30% of cumulative sanctions. iv. Cumulative Disbursements Since inception, an aggregate amount ₹4,37,441 crore has been disbursed, forming 79.29% of aggregate sanction of ₹5,51,724 crore as on 31 March 2024. The total loan outstanding under RIDF as on 31 March 2024 stood at ₹1.69 lakh crore. v. Anticipated Benefits under RIDF The RIDF assistance to various State Governments, as on 31 March 2024, is estimated to create/restore irrigation potential of 422 lakh ha, 5.62 lakh km of rural roads and 14.08 lakh meters of bridges and also generate non-recurring employment of 3096.23 crore man-days. vi. Initiatives On 11th October 2023, in association with Department of Financial Services (DFS), Ministry of Finance (MoF), Government of India (GoI), a review meeting on Rural Infrastructure Development Fund (RIDF) was conducted with all senior finance department officials of the State Governments and as an outcome, a committee has been set up, under the chairmanship of Additional Secretary, DFS, for suggesting enhancements in the operation of RIDF. The final report of the committee will be submitted soon. During the year, as part of providing complete digitization for the operation of RIDF, facilitations in the portal were enhanced with dedicated modules for disbursements. Modules for sanction is under finalisation. A dashboard for the use of State government officials was also rolled out during this year. 2. Long Term Irrigation Fund (LTIF) i. Background Long-Term Irrigation Fund (LTIF) was announced in the Union Budget 2016–17 for fast tracking 99 identified medium and major irrigation projects, spread across 18 states in mission mode by December 2019. Subsequently, GoI also approved funding for four more projects under During 2016-2021, NABARD has provided loan towards Central share to National Water Development Agency (NWDA), SPV of Govt. of India, as well as State share to willing State Governments with a tenor of 15 yea₹ So far 13 states have executed the MoA to avail funding assistance from NABARD. Further, the GoI has approved continuation of financial assistance under LTIF upto 31 March 2026 to willing State Governments for ongoing projects. From 2021-22 onwards, the funding arrangement is continued towards meeting State share only for the 60 ongoing AIBP projects and 85 ongoing CADWM major/medium irrigation projects (out of the 99 irrigation projects) with GoI interest subvention up to 2% only. Funding requirements for central share will be met through budgetary resources of GoI. ii. Financial progress During 2023-24, loan amount of ₹502.34 crore was sanctioned to Govt. of Jharkhand and an aggregate loan amount of ₹2605.14 crore was released under LTIF in r/o Govt. of Assam, Govt. of Maharashtra, Govt. of Madhya Pradesh, Govt. of Odisha, Government of Jharkhand and Govt. of Rajasthan towards State Share. The cumulative loan sanctioned as on 31 March 2024 13  For Internal Use only is ₹85,790.78 crore; of which Central Share stands at ₹46,495.93 crore and State Share at ₹39294.85 crore. Against this, cumulative amount released as on 31 March 2024 was ₹61350.92 crore comprising Central share of ₹26,500.60 crore and State share of ₹34850.32 crore. 3. Micro Irrigation Fund (MIF) i. Background MIF with an initial corpus of ₹5000 crore was operationalized in NABARD in 2019-20 to facilitate efforts of State Governments in mobilizing additional resources for expanding coverage under micro irrigation and incentivizing its adoption beyond provisions of Pradhan Mantri Krishi Sinchayee Yojana-Per Drop More Crop. Tri-partite Memorandum of Agreement (MoA) under MIF has since been executed amongst MoA&FW, GoI; NABARD and State Govt. in respect of 10 States, viz., Andhra Pradesh, Gujarat, Haryana, Maharashtra, Punjab, Tamil Nadu, Rajasthan, Uttarakhand, Karnataka and West Bengal. For facilitating drawl of funds under ₹500 crore under MIF, the State Govts. Of Gujarat, Haryana, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Karnataka and Uttarakhand have signed the Amendatory Agreement with the MoA&FW and NABARD. The MIF funding arrangement for the initial corpus is in operation upto 31 July 2024 till a decision on the RKVY scheme is taken by the cabinet, whichever is earlier, with the existing terms and conditions. As announced in Union Budget 2021-22, augmentation of MIF corpus by another ₹5000 crore and its implementation upto FY 2025-26 is under consideration of GoI. ii. Financial progress During 2023-24, ₹290.33 crore loan has been sanctioned to Govt. of Karnataka and an aggregate loan amount of ₹871.78 crore was released under MIF in r/o Govt. of Haryana, Govt. of Gujarat, Govt. of Punjab, Govt. of Uttarakhand, Govt. of Karnataka and Govt. of Rajasthan. The cumulative loan sanctioned stood at ₹4724.74 crore, against which ₹3387.80 crore has been released as on 31 March 2024. iii. Physical Progress The sanctions made by NABARD till date under MIF envisages expansion of micro irrigation coverage by an area of 19.10 lakh ha. Out of this, an area of 13.89 lakh ha has been covered by the States as on 31 December 2023 (Source: MoA&FW, GoI) 14  For Internal Use only 3. Other Business Initiatives Operations under other business products scaled new heights during the FY 2023-24 and posted spectacular performance in sanction and disbursements, despite the challenges being faced due to rising interest rates and GoI restrictions on State Government borrowings. The sanctions under all the products reached a level of ₹75,451 crore registering a y-o-y growth of about 10%, and the disbursements during the year stood at all time high of ₹73,879 crore with staggering y-o-y growth of about 30%. The loan outstanding under BID products increased to ₹75,022 crore at the end of FY 2023-24 as against ₹68,676 crore (as at end of FY 2022-23), registering y-o-y growth of about 10% with net addition of more than ₹13750 crore. The total outstanding from new business products, as percentage to the total loan book of NABARD formed an impressive 9.51%. The gross interest income from BID products during FY 23-24 was ₹4,824 crore, which was 28 % higher than previous financial year. The outstanding position for last 5 years is given below: (₹crore) Financial Year March March March March March 20 21 22 23 24 Total loan book size 4,81,515 6,03,000 6,80,272 7,33,187 7,97,176 Of which, new business 27,910 43,754 56,747 61,262 75,801 products % of new business products 5.80 7.26 8.34 8.36 9.51 O/s to the total loan book Performance under various new business initiatives products is furnished in following paragraphs. 1. NABARD Infrastructure Development Assistance (NIDA) NIDA was designed as an alternative line of credit to address this gap. The product is funded by NABARD on its own either through its cash flows or through market borrowings. The entities eligible for NIDA loan are State Governments, State Government owned entities/corporations, SPVs formed for raising off budget resources, etc. NIDA was designed for on budget and off budget borrowings by the State Governments and State-owned organisations for creation of infrastructure. In FY 2023-24, total sanctions under NIDA stood at ₹9,934.40 crore, for 15 credit proposals, which included two new clients. The disbursement under NIDA for the FY 2023-24 was ₹7,303.96 crore. The performance under NIDA during last 5 years is represented in the following graph. 15  For Internal Use only Performance under NIDA during last 5 years (₹ crore) 35000 32404 30000 27890 25000 22768 23319 20000 17999 15000 11750 9934 10000 8125 7506713663297304 4382 3582 3727 5000 0 Sanction Disbursement Outstanding 2019-20 2020-21 2021-22 2022-23 2023-24 The 5-year CAGR of sanctions, disbursements and outstanding under NIDA was 6.17%, 23.91% and 28.84%, respectively. 2. Credit Facility to Federations Credit Facility to Federations (CFF) provides short-term credit support to State Government entities like agricultural marketing federations, civil supply corporations, dairy cooperatives, /milk unions or federations, etc., for procurement, processing and marketing of agricultural commodities, input supply, etc. In FY 2023-24, total sanctions under CFF stood at ₹38,700 crore, for 13 credit proposals, which included two new clients. The disbursements under CFF was ₹ 39,240.23 crore during FY 2023-24. The outstanding position as on 31 March 2024 was ₹20,583.03 crore against ₹17,355.21 crore as on 31 March 2023. The sanctions, disbursement and outstanding under CFF as on 31 March, during last 05 years are given in graph below. Performance under CFF during last 5 Years (₹ crore) 60000 50000 47853 46434 39240 40160 40607 38700 40000 37207 36436 31437 30000 25071 22315 20583 20000 20038 17355 12123 10000 0 2019-20 2020-21 2021-22 2022-23 2023-24 Sanction Disbursement Outstanding 16  For Internal Use only The major sector benefitted under CFF is food grain procurement under MSP operations, wherein the limits availed by procurement agencies (State Govt. Corporation/State Marketing Federations) are used for timely payment of remuneration price (MSP) to the farme₹ 3. Direct Refinance Assistance (DRA) to DCCBs for Short-Term Multipurpose The credit limit under this product is sanctioned to well-governed and financially strong StCBs and DCCBs, as per the latest inspection report of NABARD. The purpose of the loan covers, inter alia, working capital, repair and maintenance of farm equipment and other productive assets, storage/grading/packaging of produce, marketing activities, etc. The limit is in the nature of cash-credit, operative for one year from the date of sanction. The limit is also available for a period of three months to meet the specific requirements of banks. Sanction under DRA registered a significant increase of 25% i.e., from ₹21,435 crore in FY 2022-23 to ₹ 26,816 crore during FY 2023-24. The disbursements under DRA have increased by 48% from ₹18,179 crore during FY 2022-23 to ₹26,869 crore during FY 2023-24. The sanctions, disbursements and outstandings under DRA during last 05 years are given in following graph: Performance for last 5 years under DRA (₹ crore) 30000 26869 26816 25000 21435 18521 17574 18179 20504 20000 9200 15000 11890 13956 8932 10000 7373 9822 5000 4567 3026 0 2019-20 2020-21 2021-22 2022-23 2023-24 Sanction Disbursement Outstanding 4. Performance under Government of India schemes a. Dairy Processing and Infrastructure Development Fund In line with its announcement in the Union Budget 2017–18, Government of India created a Dairy Processing and Infrastructure Development Fund (DIDF) in NABARD, with a total corpus of ₹8,004 crore to be utilised over a period of five years (2018-19 to 2022-23). The objectives of the scheme are modernisation and infrastructure augmentation for milk processing and value addition, and to ensure optimum price realisation by the primary produce₹ Cumulatively 32 proposals amounting to ₹3015.60 have been sanctioned under the scheme. Sanctioned projects have created a liquid milk processing capacity of 7.39 million litres per day, 265 Metric tonne per day milk powder processing capacity and 3.4 Lakh litres per day Bulk Milk Coolers capacity. Apart from Liquid milk processing and Milk Powder processing capacity, 1.42 MLPD of value-added product plant has also been completed till date. Department of Animal Husbandry and Dairying (DAHD), GoI vide letter No.M- 02023/2/2017-CDD-Part (2) (E-15424) dated 27 October 2023 has requested NABARD to 17  For Internal Use only consider releasing pending loan instalments in the ongoing projects. Accordingly, an amount of ₹176.31 crore released to NDDB during FY 2023-24. Cabinet Committee on Economic Affairs (CCEA) in its meeting held on 01 February 2024 has approved merger of DIDF with AHIDF and extension of AHIDF for another three years till 31 March 2026. Further, NABARD is included as loaning entity under the revamped AHIDF scheme. b. Fisheries and Aquaculture Infrastructure Development Fund In line with its announcement in the Union Budget 2018–19, Government of India created the Fisheries and Aquaculture Infrastructure Development Fund (FIDF) with a total corpus of ₹7,522.48 crore to be implemented over a period of five years (FY 2018-19 to 2022-23). NABARD will fund the public infrastructure components to the State Governments to the tune of about ₹2,600 crore for various facilities like fishing harbours, fish landing centres, modernized State fish seed farms, modern fish markets, disease diagnostic laboratories, aquatic quarantine facilities, etc. During the FY2023-24, total disbursements stood at ₹289.21 crore. CCEA in its meeting held on 08 February 2024 has accorded approval for extension of the scheme for another 03 years i.e., up to 31.03.2026. Now the scheme is open for fresh sanctions as well as disbursements. Further, an upper cap of 10% in respect of lending to the State Governments/ Union Territories has been approved. Under FIDF, NABARD is funding State Governments/ Union Territories only. Accordingly, ₹152.82 crore (10% of 1528.21 crore balance loan amount available under the scheme) is available for sanction by NABARD and disbursements in the sanctioned projects will be allowed as per phasing. Performance under DIDF and FIDF during last 5 years is given in the graph below. Performance under Government of India Schemes - DIDF and FIDF (₹ crore) 2500.00 1987.99 2000.00 1500.00 1083.55 1000.00 912.28 670.00 735.26 500.00 351.24 348 364.00 225.67 289.21 120.70 194 118.66 172 176.31 0.00 0.00 0.00 0.00 0.00 0.00 2019-20 2020-21 2021-22 2022-23 2023-24 DIDF Sanctions DIDF Disbursement FIDF Sanctions FIDF Disbursement 18  For Internal Use only 5. Rural Infrastructure Assistance to State Governments (RIAS) Rural Infrastructure Assistance to State Governments (RIAS) aims at providing financial assistance to State Governments in Eastern Region and aspirational districts in other states, for creating infrastructure that supports rural livelihoods. Sanctions and disbursements during FY 2023-24 were nil. Under the initiative “Renewed Engagements with State Governments for Infrastructure Financing”, RIAS is being revamped to realign with requirement of State Governments. 6. Overall BID performance: The performance under new business initiatives/ products is showcased in the following graph. Performance of under all BID products during last 5 years (₹ crore) 80000 75901 75451 73879 75801 71435 70000 64358 63047 61262 60000 56907 56747 50804 50000 68676 43754 39085 40000 27909 30000 20000 10000 0 Sanction Disbursement Outstanding 2019-20 2020-21 2021-22 2022-23 2023-24 Interest Income for last 5 years - All BID products (₹ crore) 6000.00 4,824.30 5000.00 3,760.50 4000.00 3,391.67 3000.00 2,491.31 1,917.48 2,076.12 2000.00 1000.00 0.00 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 19  For Internal Use only 4. Storage and Marketing Infrastructure NABARD administers two Funds viz. Warehousing Infrastructure Fund and Food Processing Fund (FPF) allocated by Government of India for supporting the creation of warehouse infrastructure for scientific storage of food grains in the country. At present, the following funds are administered by DSM: Warehousing Infrastructure Fund Food Processing Fund 1. Warehouse Infrastructure Fund (WIF) Government of India announced a dedicated Warehouse Infrastructure Fund (WIF) with a corpus of ₹5,000 crore in 2013–14. The WIF corpus was augmented with a further allocation of ₹5,000 crore in 2014–15. The fund was setup to support State Governments, State-owned agencies, and Corporates for creation of scientific warehouse capacity through financial support. Creation of Storage Infrastructure in APMCs was later included as an eligible activity for support under WIF. The Fund envisages financing State Governments, State Government Undertakings and Private Sector for establishing dry warehouses, cold storages, and cold chain infrastructure. As on date, the corpus under WIF is fully committed and a total of 8161 projects have been sanctioned across the country which envisage creation of a storage capacity of 13.74 million MT. In terms of capacity created, a total 9.96 million MT capacity of scientific storage has been created in the country through WIF. Milestones Achieved (31 March 2024) Total 9.96 million MT capacity operationalized consisting of varied storage structures, from a small 100 MT capacity farm gate warehouses of PACS, to the modern State-of-the- Art 50,000 MT SILOs meant for bulk storage. From Integrated Value Chain project for Fruits & Vegetables, to the on-line electronic trading platform of APMC projects are supported under WIF. Modern, scientific and earthquake resistant warehouses are constructed to ensure food security under the Targeted Public Distribution System(TPDS) in the difficult terrains of Northeast States. Region wise distribution of sanctions under WIF Southern and Western region accounts for major share of decentralized storage. Northern region, being the major procurement region, accounts for large sized storage structures whereas small sized storage structures at village level have been sanctioned in Gujarat, Odisha, and Tamil Nadu. (₹crore) Region No of No. of Capacity Cumulative Cumulative Loan Projects Projects Created Loan Loan Disbursed Sanctioned completed (in '000 Sanctioned Disbursed during MT) 2023-24 Southern 4,462 3,361 3,777.73 5,372.86 5,097.89 107.45 20