Thiruvananthapuram

The ball is in court of central board of Reserve Bank of India in regard to deciding on amounts allocated for contribution to National Rural Credit (Long Term Operations), or NRC-LTO, and National Rural Credit (Stabilisation Fund), or NRC-SF, maintained by National Bank for Agriculture and Rural Development (Nabard).

The Centre has clarified as much vide a communication from Pankaj Chaudhary, Minister of State for Finance, to Amra Ram, Member of Parliament, in reply to a letter addressed to the Union Finance Minister.

It’s RBI call, says Centre 

“In terms of Section 46 A of the RBI Act, RBI is required to contribute every year such sums of money to National Rural Credit (Long Term Operations) Fund and National Rural Credit (Stabilisation) Fund as it may consider necessary and feasible,” the Minister of State clarified in the letter. 

In the past, the amount has been decided by central board, concurred Rana Mitra, General Secretary, All-India Nabard Employees Association (AINBEA). The MoS has essentially reiterated the position so the fund flow resumes, he told businessline. 

Norm till early 1990s

“The flow of significant amounts in this manner was a normal practice till the early 1990s. The AINBEA has sought to highlight the need to resume this, and has brought this very important issue to notice of both Government of India and and RBI,” Mitra said.

An AINBEA national seminar on ‘Challenges before the Indian agrarian economy and Nabard’ held in Delhi on November 22 had deliberated on this and other pertinent issues, he said. Harish Rawat, former chief Minister of Uttarakhand and former President, AINBEA, inaugurated the seminar in absentia.

Arm Nabard suitably

In a message, he had pointed to the need of ensuring ‘a decent price for farmers’ produce and availability of cheaper and timely credit.’ For this to happen, Nabard should be equipped with funds from both RBI and the government, per statues, Rawat said.

Jose T Abraham, President, AINBEA, stressed on need for restoration of cheaper and zero-cost funds as well as grant of exemption from income tax to Nabard to ensure an effective credit delivery system through cooperatives and RRBs.

Mitra presented an approach paper in the seminar in which he dealt with the gravity of agrarian crisis and the urgent need for strengthening rural credit delivery system by channelising cheap funds to Nabard.

Loan ‘ever-greening’

Vikas Rawal, Professor, CESP, JNU, New Delhi, opined no new credit is infused by banks/FIs in respect of Kisan Credit Cards but it is rolled over through ever-greening of loans. Farmers also suffer due to weakening of development orientation of PSU banks. He requested trade unions to publish papers on severe manpower shortages in PSU banks and institutions like Nabard. 

Vijoo Krishnan, General Secretary, All-India Kisan Sabha, emphasised government should accept the demand of C2+50 per cent by farmers as per MS Swaminathan Commission recommendations. 

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