Financial Daily from THE HINDU group of publications
Wednesday, Dec 25, 2002
Money & Banking
Industry & Economy - Rural Development
Columns - On Mint Street
Despite claims, RIDF is a flop
AT a recent press conference of Nabard, officials made some grand claims for the Rural Infrastructure Development Fund (RIDF). But going by the literature given at the meet, the RIDF has been a flop, confirming the findings of the research paper by Alice Albin Morris and Sebastian Morris.
The total corpus of RIDF (Tranches I to VIII) as of December 23, 2002 is put at Rs 28,500 crore, sanctions at Rs 25,990.71 crore and disbursements at Rs 15,001.29 crore.
Going by the numbers provided, RIDF VII and VIII have not engaged the attention of either State Governments or Nabard, for that matter. Under RIDF VII, sanctions came to Rs 4,989.04 crore, while disbursements were Rs 1,624.79 crore and under RIDF VIII, sanctions were Rs 2,580.98 crore, while disbursements were at the lowest ever at Rs 370.87 crore.
Nabard claims out of 2,40,664 projects sanctioned 1,37,029 have been completed without touching upon the quality. Possibly, the benefits/impact assessment is a give away with the benefits far below the anticipated benefits of projects sanctioned up to November 30, 2002. The anticipated benefit from generation of irrigation potential is placed at 68.40 lakh hectares, while the benefits achieved (approx) are 46.20 lakh hectares.
Employment generation is off target with anticipated benefits placed at 37.32 lakh jobs and benefits at 25.19 lakh (recurring) jobs.
Shift to sector-wise RIDF sanctions and disbursements as on December 23, 2002. The number of farm projects (including animal husbandry) is put at 1,77,624 with the loan sanctioned coming to Rs 10,286.05 crore and disbursements at Rs 5,637.65 crore. Social sector projects taken up come to 62,719 with funds sanctioned placed at Rs 14,921.11 crore and disbursements at Rs 9,183.41 crore.
Some 321-power projects (system improvement and mini-hydel projects) were taken up with a sanctioned amount of Rs 783.55 crore and disbursements of Rs 180.23 crore. Looked anyway, Nabard has not been able to hook State Governments' and others on to RIDF.
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SOME key bank appointments will have to be made by the Government in 2003. On the retiring list are a RBI Deputy Governor, Chairman of Bank of India, Chief of Nabard and a few others at other banks. Usually, the RBI is keen on finalising the list early for the year to make the changes smooth. The Centre kept the post of the SBI Chairman vacant for about two weeks recently. But the Finance Ministry is not as keen as RBI. The Appointments Board constituted for advising Government on appointment of whole-time directors in banks and FIs, has suggested "a selection system based on interaction/interview with the existing Executive Directors of nationalised banks and suitably qualified persons from outside Government for appointment as chief executives of the public sector banks.''
The Government recently told the Lok Sabha, "the recommendation is under consideration.'' If the Board has its way it could be a novel way of getting bank chiefs. Will a banker from the private sector be able to head a nationalised bank and if that happens it could be something unique. But will any private banker apply, as public sector salaries are not attractive enough; again, a private banker is not used to being hauled up by Vittal's army of investigators for decisions taken some 10 years ago.
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