Government of India created the Rural Infrastructure Development Fund (RIDF) under NABARD in 1995-96, with an initial corpus of Rs.2,000 crore. With the allocation of Rs.25,000 crore for 2017-18 under RIDF XXIII, the cumulative allocation has reached Rs.2,92,500 crore, including Rs. 18,500 crore under Bharat Nirman.
The eligible activities to be financed under RIDF as approved by Government of India are classified under three broad categories:
- Agriculture and related sector
- Social sector
- Rural connectivity
Objective of Rural Infrastructure Development Fund
The main objective of the Fund is to provide loans to State Governments and State-owned corporations to enable them to complete ongoing rural infrastructure projects
Source of Fund
Domestic commercial banks contribute to the Fund to the extent of their shortfall in stipulated priority sector lending to agriculture. Also government of India regularly contribute to the fund through budgetary allocations.
Rate of Interest
The interest rates payable to banks on deposits placed with NABARD and loans disbursed by NABARD from RIDF have been linked to the Bank Rate prevailing at that point of time.
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