Nabard by Beacon way

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

For NABARD â&#x20AC;&#x2DC;Eâ&#x20AC;&#x2122; Wing, Bandra-Kurla Complex, Bandra (E), Mumbai 400 051 India Tel.: 91-22-2653 0084. Fax: 91-22-2652 8141. Website: www.nabard.org E-mail: nabmcid@vsnl.com

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system, or transmitted in any form, or by any means whether electronic,

mechanical,

digital,

photocopying,

recording

otherwise, without the prior permission in writing of the publisher. This publication has been prepared for NABARD.

To the best of

as on 16th Feb, 2009. Although every effort has been made by NABARD to ensure accuracy of the information, the firm accepts no legal responsibility whatsoever for any consequences that may arise from errors or omissions contained in this publication or from any opinions or advice given on the basis of information contained in this publication. This publication is intended to be a general guide and professional advice should be sought before taking any action on specific issues.

NABARD acknowledges with gratitude the farmer - an unsung hero for the saga of Indiaâ&#x20AC;&#x2122;s economic resurgence and dedicates this account to his matchless love for the Mother Earth

Whenever you are in doubt ... recall the face of the poorest and the weakest.. and ask yourself if the step you contemplate is going to be of any use to that person. Will he gain anything by it? Will it restore him to a control over his own life and destiny? Mahatma Gandhi

PREFACE Twenty Five years is a period long enough for an organization like NABARD to look back and take stock of its activities, of the ideas that brought it much fame and of the newer pastures it needs to tread its path on.

It is not an

easy task to discipline the rural credit delivery system and also venture into more complex development strategies. The institution in

the introspective

mode, realises that it has come a long way from being a refinance agency to its present stature of a full fledged development monolith that unleashes the development forces in the rural areas.

It is also responsibly conscious

that there are many challenges ahead and many twists and turns to its chartered course. But there is indeed no doubt that it is only an organisation like NABARD that inspires confidence in the rural population to travel these steps to trigger all out development of the rural India. Only NABARD has capacity to write the script of happy and prosperous rural India.

Global Warming or Global Greening ? The answers for global warming will never be found in plush boardrooms. The solutions for global warming will never be discovered in literary pieces of work that exude concern. Neither will it see light of the day in seminars or workshops. Instead, the formula lies in the hands of a simple farmer. It is unbelievable but true. The greenhouse effect could transform into a greening effect, only if these sons of the soil were given their rightful place on the very earth they toil on. 8

Smt. Indira Gandhi the Prime Minister flanked by the then Finance Minister Mr. Pranab Mukherji and the first Chairman of NABARD Mr. M. Ramkrishnayya.

The Making of a New Institution .... November 5, 1982 NEW DELHI: ‘Madam, aap gaai badli band karwa dijiye, hum yahan doodh ki ganga baha denge’ said the diminutive person cutting the flow of the speaker’s address. The remark by an unsophisticated member of the audience in the august gathering at Vigyan Bhavan Hall, New Delhi sent a shock wave through the dignitaries on the dais and those occupying the front reserved rows. It jarred the solemnity of the function. The madam, he addressed to, was none other than the then Prime Minister of India, Smt. Indira Gandhi and the reference was to the malpractices in dairy projects where same cow is seen changing hand. It was a solemn occasion when the newly born National Bank for Agriculture & Rural Development was being dedicated to the Nation. Smt Gandhi thoughtfully looked at the person and then at the dignitaries on the dais that included the then Finance Minister Mr. Pranab Mukherjee and Governor of Reserve Bank Mr. Manmohan Singh who now occupies the top position at the central government. She took the interruption in her usual stride as she was dwelling on the rural economy. The interruption came from the unidentified village man when she questioned the learned audience as to why milk production in the country was not stepped up when milch animal finance had gone up considerably. 10

Her silence

Indian parliament passed the NABARD bill in 1981.

spoke volumes. Unfazed, she continued her speech much to the relief of the audience. Nearly a year back, Smt. Gandhi formally dedicated the new institution to the country and the Indian Parliament witnessed a debate on what the new yet-to-be borne organization must do, before the bill came to be known as NABARD Act 1981. The day was November 26, 1981.

In the Lok Sabha, it was business as usual.

The

then Finance Minister Mr. R. Venkatraman had tabled a bill which

sought to create a new

dispensation - an apex bank for agriculture and rural development.

The

Dy. Speaker moved

the motion to take into consideration the bill as tabled. The Parliament was to witness making of one more development outfit. Or was it going to be really a single window solution to all the woes of the rural poor?

Hon Member of Parliament Mr. Chandrajit Yadav was the first to

open the debate. It was the beginning of a new bank for all that the rural India stands for. It had strong supporters and there were a few vocal critiques in the parliament. But one thing was clear. Cutting across the party lines, the peopleâ&#x20AC;&#x2122;s representatives welcome the

new

institution because it was the collective wisdom of the nation that the villages deserved a better deal. A new arrangement was found necessary at the national level for achieving the focus and

The law for the rural people. The act for justice, equity and equal opportunity.

thrust towards integration of credit activities in the context of the strategy of Integrated Rural Development. A committee set up by the Reserve Bank under the chairmanship of Mr. Sivaraman had recommended in its report setting up of a new institutional arrangement to oversee the complex rural credit scenario. The committee, called CRAFICARD in short, also found it prudent to integrate short term, medium term and long term credit structures for the agriculture sector to bring in more cohesiveness in the operation of the new bank. The Azamgarh MP Mr. Chandrajit Yadav addressed the house and averred that basic infrastructure like roads and drinking water is the high priority for the villages. As one looks at the journey of the last twenty five years, NABARD seems to have travelled the journey well.

There were others like Mr. Y. S. Mahajan, Bapusaheb Parulekar, Mr. Umakant Mishra

and many others in the Parliament who voiced their opinions on the bill.

It was like a wish

list of what the new bank should be doing to ameliorate the lot of the rural poor. And more important create an environment where the villagers feel secure and happy. Formally, NABARD started functioning on July 12, 1982.

Twenty six years down, it is

a journey long enough to look back and see whether the development strategies that the bank has coursed through have done justice to the pious intentions of the peopleâ&#x20AC;&#x2122;s representatives. 14

With him, NABARD enjoys unique relation as a change agent.

From a benevolent moneylender to Change Agent For the last five decades, the Indian Economy chose planning as a vehicle of growth. And

most of the policies and programmes for poverty alleviation were sourced from

the Five Year Plans.

But the growth could not permeate all sections of our population

in the rural areas. The Trickle Down Approach envisaged that the benefits will percolate automatically to the bottom of the society. touched.

But in effect only the fringe of the poor was

The Institutional credit did help but along with it came a â&#x20AC;&#x2DC;Dependency Syndromeâ&#x20AC;&#x2122;.

Various programmes like Integrated Rural Development Programme delineated essentially a giver and taker relationship between the development agencies and the rural poor.

The

giver would prescribe what is needed to be given and the taker i.e. rural poor would be passive and indifferent recipients. Things are not the same any more. There is a perceptible change in the attitude, from dependency

empowerment.

NABARD

picked up threads and continued on its RBI legacy

providing

investment

refinance

The creater of God... but strong claimant for financial inclusion.

and through it building capital formation in the rural sector. More concerned with building a well oiled machinery of the rural credit delivery system, NABARD in its initial period, fine tuned its policies to strengthen the existing cooperative banking set up, promote

Regional Rural

Banks to create a low cost banking system in the rural areas and encourage commercial banks to take up more and more rural development projects. At one point NABARD was referred to as ‘benevolent moneylender’. That in effect sums up NABARD’s initial role. But with the growing aspirations of the rural people, NABARD could not have continued with its conventional refinance interventions.

In the early 1990s, when the country was

suffering the trauma of financial crisis and globalization seemed to be the panacea for all its ills, NABARD perfected the grassroots level planning to scientifically tap the potential of each district. This was one of the biggest innovations in the rural credit delivery system.

Thus

emerged the role of the District Development Managers of NABARD. Close on the heels of this innovation, NABARD opened up a new window i.e. rural infrastructure. NABARD brought the state run infrastructure projects under the strict banking discipline. It also roped in these very villagers through the village development committees for the successful completion and necessary follow up of the project.

Skill development program-one of the numerous interventions by NABARD.

The development strategies the world over, have came to veer around micro credit as a more effective tool to reach out to the rural poor.

True to this trend, NABARD has, since

early 90s, endeavored to create a conducive environment for the self help groups of the rural poor by linking them with the financial intuitions.

Today,

NABARD

spearheading

the largest micro credit programme in the world. The major off shoot of the programme - and which was not unintended - was that majority of these micro groups are women groups.

There is a silent revolution taking

place in the countryside.

Not stock markets but these rich hurrying streams go about to feed a billion people.

MAKING FARM SECTOR VIBRANT Agriculture in India

produces 23% of GDP, feeds a billion people, and employs 66% of the

workforce. Post Green Revolution, Indiaâ&#x20AC;&#x2122;s agricultural productivity has improved to the point that it is both self-sufficient and a net exporter of a variety of food grains. Yet most Indian farmers have remained quite poor. â&#x20AC;&#x153;Emergence of WTO and the series of deliberations under Uruguay round have changed the world economic order. The Indian economy has also shed its earlier protectionist policies and opened up the economy to the world market. Undoubtedly, this has helped the Indian economy to recoup its resulting strength in a robust economic position. The economy is moving steadily with more than 6 per cent GDP growth rate for the last two decades or so. However, the new economic order has posed severe challenges to the agricultural and rural sectors of the economy. Agricultural operations have become highly cost-prone. Commercialisation and capitalization of agriculture has increased the debt burden of the small and marginal farmers who have meagre access to institutional credit. The process of globalisation has adversely affected the rural artisans too. Lack of demand for the traditional rural industries, flow of foreign goods, high-tech production processes have resulted in large-scale unemployment.

In the new order of economy driven by the market forces, if the rural economy has still to be vibrant and make a meaningful contribution to the lives of the people, the development agencies will have to make forceful intervention

to Farm economy.

Rural insurance, Provision of adequate need-based subsidies and investment, Land reforms,

including management of land and water resources would ease the problems faced by the farming community. Perhaps for this purpose NABARD will have to re look and redefine its role in making farm sector

to the sunrise technologies, Bio-technology, Information technology and e-commerce in agricult ure.

Revamping

regain its importance

in the economy.

agricultural research and the extension-education system, processing, storage and transport of farm products,

The development has to be a product of NABARDâ&#x20AC;&#x2122;s proactive intervention rather than its reactive responses to the

Agricultural marketing focus on free trade and movement of farm produce would provide much needed impetus

compulsions of the fast changing global dynamic conditions.

Farm Sector is still the main stay of Indian economy. A family farm supported by NABARD. 24

Bamboo has a promise of prosperity. NABARDâ&#x20AC;&#x2122;s farm sector intervention helps farmers in this regard.

Bamboo Plantation, Craft and NABARD Three persons in their mid forties â&#x20AC;&#x201C; Mohan Hodawdekar, Sanjay Karpe and Shilpesh Gambhir were clueless about carrying their agenda ahead. They had established a NGO in the lush green Konkan region

of Maharashtra. Fired by zeal and commitment to do something that

will really make radical change in the lives of the rural poor, they found themselves caught in the routine rituals. They could have continued promoting the groups for papad and masala units. But their heart was somewhere else.

And suddenly they found a mission and a goal.

It made them feel excited. And one more success story took place in the otherwise placid environment of Konkan. It started like this. Sometime in the first quarter of 2004, NABARD had arranged for a visit of the programme Director of International Network for bamboo & Rattan, to make a presentation before the NGO workers and bankers of Sindhudurg Dist. to explain the opportunities in bamboo as a resource. The gathering expected nothing spectacular from the meeting. And nothing spectacular happened. Only that the group decided to try out this opportunity well.

A new organization Konkan Bamboo & Cane Development Centre took birth.

as This

was followed by a workshop by NABARD on 5 July 2004 for propagation of appropriate technology on bamboo. But the real development started only when Mr. Hodawdekar and 26

Through Cane and bamboo products rural India has easily gained entry in the urban homes.

his friends established the common facility centre, in their enthusiasm only to realize shortly that like other 100 centres, their common facility centre also had no takers.

Having made

heavy investment for the machinery, the ngo was facing only despair. But it did not take them much time to realize that the locals found it a taboo to be identified with bamboo work. This for generations was restricted only to a particular caste. And secondly, their efforts to provide employment at home found no takers from the young girls. The NGO did two things.

Instead of providing only training, they started guaranteeing assured employment in their own unit.

And they started calling

this unit a factory. So girls were excited to take up the employment.

The technical

inputs and guidance came from NABARD and International Network while IIT Powai provided the tool kits and National Institute of Design Ahmedabad gave the initial designs for the furniture. So capacity building of the artisans was a

Common facility centre under cluster development provides number of facilities which otherwise a poor craftsman can not afford.

major component in the project. On May 27, 2005, NABARD organized a workshop at Kudal for promoting linkages between organized and unorganized sectors in bamboo. Last year NABARD organized two skill development programmes and this year they have three more programmes on the cards. The response from the hotel industry in Goa and Maharashtra overwhelming that they have lined up orders

for next six months.

for these products is so It is difficult to convince

the prospective buyers that they do not have additional capacity to produce more at this stage. This is going to be a major cluster in bamboo unit in Konkan and this area will very shortly acquire a new identity of Bamboo products. NABARD. Thanks only to the support by

â&#x20AC;&#x2DC;The success of the cluster is a success of DDMs and other officers, we ventured into a

project which we would not have otherwise thought ofâ&#x20AC;&#x2122;, says Mr. Hodawdekar of Konkan Bamboo & Cane Development Centre.

Kisan Credit Cards bring banks closer to the farmer.

Credit Card for Farmers - A Landmark Credit Innovation As a pioneering credit delivery innovation, the Kisan Credit Card scheme was introduced with effect from 1998-99 for timely and easy availability of the production credit to the farmers. The scheme is being implemented by the Commercial Banks, Cooperative Banks and Regional Rural Banks as per the model designed by NABARD. The Bank has been playing a catalytic role in assisting the banks to meet emerging challenges. KCC has enormously helped to expand the outreach of Banks and simplify credit delivery system.

A farmer

can

use the card to readily purchase agricultural inputs such as seeds, fertilizers, pesticides, etc. and draw cash for their production needs. Subsequently, similar scheme was launched by NABARD called Swarojgar Credit Card in September 2003 to provide adequate and timely credit both working capital capital

to small artisans, handloom weavers, self employed persons etc. from the banking

system in a flexible, hassle free and cost effective manner.

and block

The adivasis have seen a dramatic change in their lifestyle, wadi project gave them a good break Sevlubhai Gaikwad of Ghodmal, Vansda in Navsari with his family is one such farmer.

The Marvel of Wadi Model & the Tribals For years , Adivasi men and women in tribal areas of Dang would harvest paddy, celebrate Diwali and then pack off to the near by towns in Gujrat in search of daily labour with uncertain and irregular employment.

Most of them would leave behind the old, the children and their

cattle only to return by June to again cultivate their lands. For years they had been caught into this lifestyle because they had no options.

But not any more. Today the advasis in this

area have settled down. Migration has stopped. Thanks to the Wadi project. The poor families participating in this programme popularly known as Wadi (Orchard Development), establish drought tolerant fruit crops such as mango, cashew, Indian gooseberry, tamarind, custard apple, ber, etc. on their marginal or wastelands. The inter-space is used for cultivating arable crops, which they have been growing earlier and the field bunds and borders are used to establish hardy shrubs and trees useful for fodder, fuel, timber and herbal medicines. The

poor tribal families, who participated in this programme are now earning Rs.25000-

30000 per annum to lead a sustainable livelihood. This programme has ensured women empowerment, food security, health-care, education for children and prevented migration. It has addressed the twin problems of poverty and environmental degradation and evolved as a replicable model for conservation of bio-diversity while enhancing rural prosperity. NABARD has been closely associated with the implementation of this externally aided 34

Wadi Project successfully integrated the processing for value addition and thereby enriched the tribals with huge returns. Vasundhara Co-op. Society at Lachhakadi provides an array of products.

comprehensive Adivasi Development Programme through ‘Wadi’ approach in collaboration with NGOs

in Gujrat since 1995 and in Maharashtra since 2000.  The central focus of

the programme is on “wadi” (small orchard) with other development interventions like soil conservation, water resource development, community health and sanitation and women development are woven as supporting components.  Each wadi plot of one acre comprises of mango & cashew nut (also amla in Maharashtra) plants surrounded by 500-600 forestry plants on the boundary. A special feature of the programme is blending of grant with credit not only to ensure participants’ stake and involvement in the programme, but also for self -reliance of the participants. Wadi model has been found to be very effective in creating sustainable livelihoods for tribal families. To facilitate adoption of similar projects for deserving tribal families in other parts of the country, Nabard has created a dedicated fund called “Tribal Development Fund” (TDF) with a corpus of Rs. 50 crore.

NABARD supported unit at Sawantwadi in Maharashtra makes unique wooden articles.

Rural Industries get a better deal The Indian cities canâ&#x20AC;&#x2122;t keep pace with the massive exodus from the villages looking for jobs. The farms too are overcrowded. There is poverty because there in no employment. yes, unemployment because there is poverty.

The vicious circle continues.

And

What the rural

poor look for is at least 100 days of uninterrupted work throughout the year. They need creation of sources of sustainable livelihoods within their own village communities based on the concept of empowerment and not dependence on the government. As agriculture alone cannot sustain the growing population in villages, it is imperative that the rural nonfarm sector is strengthened.

And one of the early interventions by NABARD in the 1980s

was to support the non farm sector. The role of Rural Non-Farm Sector is crucial both in generating productive employment and

alleviating

poverty

rural

areas.

Policy framers have come to recognize the importance of RNFS in providing sustainable livelihoods to a large number of people in rural areas. While shedding its image as refinance

NABARD supports many such income generating activities in rural areas.

agency, the first initiative taken by NABARD immediately after its formation was to focus on the non farm sector. evolved

several

refinance

Since then it and

has

promotional

schemes over the years for increasing credit flow,

developing

entrepreneurship

and

increasing the credit absorption capacity. The focus has been on greater credit flow and provision of linkages for small, cottage and village industries and handicrafts.

It is an

umbrella covering every activity that generates income and employment.

Sculptures form Orissa.

Re-creating the Tribal Crafts He cuts out a rectangular form from a shapeless rock that he has just retrieved from the waste.

This is the base -

a canvass which dictates the probable shape this stone piece is going to take.

From this dumb piece, he chisels

out the eloquent figure of a popular deity, or sculpted stems and leaves of plants and petals of flowers.

On some he

creates geometric patterns while on others he carves out motifs from nature.

His fingers move deftly as they add

a gleaming polish to the newly carved object-de-art, its sensuous lines and a reflective sparkle giving a beautiful expression to his art. Like him, there are many who would love to continue with their traditional crafts if they are not pushed out in search of jobs. Through its numerous interventions, NABARD helps him earn his livelihood and showcase Indiaâ&#x20AC;&#x2122;s traditional rural arts. 42

Jewellery with precious stones designed in Rajasthan is in great damand globally.

The major metropolitan cities periodically organize Exhibitions and Expos where the tribal art is on display presenting an endless array of craft creation.

It offers a variety of items

from cane and bamboo crafts, handloom weaving, wood carving, brass and bell metal and basketry.

The sector is known to provide direct and indirect employment to over 35

lakh people in the North East alone.

Such expos conducted in the major cities and metros

go a long way to promote activities whereby craftsmen are able to exchange ideas and to reorient designs to suit present day requirements without losing the traditional base. They generate interest among the prospective buyers and provide precious opportunity to

the craftsmen to learn marketing and

managerial skills. Markets are the key to these wonderful products. NABARD facilitates a number of marketing interventions. It promotes use of the artisan products. It also organizes buyer seller meets, conducts exposure visits and organizes exhibitions.

NABARD sponsored stalls make brisk business.

Rural Marts NABARD also supports rural Haats. It provides for minimum infrastructure like raised platforms with roofing, sanitation arrangements, provision of drinking water, compound wall/barbed wire fencing, parking, notice board etc. The help comes by way of grants up to Rs.3 lakh besides the soft loans to Panchayati Raj Institutions and primary societies.

NABARD

collaborates

with

institutes

of international repute like National Institute of Fashion Technology, to provide its modern and market savvy students an opportunity to interface with the rural artisans.

The artisans too get to

use novel designs by these students and thus get a competitive edge in producing high quality contemporary products.

Niramay Village Retreat, Savoi-Varem, Goa a NABARD promoted agro tourism project.

Reaching Out to the Grass-roots By the end of 80s, NABARD was looking for a major push to steer the rural economy for improved credit delivery and the opening of offices of the district development managers at the district level signalled a major breakthrough. The district managers are truly the ambassadors of

NABARD at district level, rendering invaluable service to the needy rural

populace in general and coordinating the development efforts of plethora of players in the district. Such was the novelty of the concept of grass-roots level planning that for both the government agencies

and the bankers,

NABARD’s District Development Manager was like a one stop

answer to all their rural riddles. Positioning DDMs at district level was perhaps the first major initiative by

NABARD to impact the rural economy in a big way.

The first batch of DDMs

were stationed at their district headquarters in 1989. “The job of DDMs, though challenging, offers opportunities for promoting rural development”, said Mr. Nayak, the then NABARD Chairman who is credited with this novel concept. According to him the DDM concept was a natural corollary of the decision to plan for the district and further, for each Service Area. Its most important assumption is that the DDM is second to none in acquiring the knowledge,

DDMs of NABARD Strongly propagate farmers club. One such meeting in the progress.

first of the current status of all the rural development sectors, geographical areas and credit agencies,; second, of the potentials available in every sector and Service Area and the adequacy or otherwise of the infrastructure needed for the credit-based exploitation of such potentials; and third, of the credit absorption capacity of each branch of every financial institution in the district.

With this knowledge at his fingertips, the DDM, said, the Chairman

NABARD, will become the most competent advisor for grass-roots planning in the district and a link with the local Government authorities as also the interpreter of the progress in implementing each service area plan as well as plans of the block and district This was truly the emphatic statement of a district managerâ&#x20AC;&#x2122;s role.

as a whole.

NABARD DDMs have pushed the agenda for women empowerment while promoting rural industries. Kalna handloom cluster in Vardhaman Dist.

Today, the Potential Linked Credit Plan or PLP has become the most sought after document in the district. Such is the nature of his duties that the district manager is always on the move, constantly in touch with people. A young lady having

a rural posting as

Branch Manager of Union Bank of India once had an eloquent comment to make on the role of DDM. ‘ I was lifted from the posh airconditioned office of the Foreign Exchange Department

knowing

absolutely

nothing

about rural development. It came to me as a bolt from the blue.

And lo! Here was this

gentleman (DDM) so obliging.

He helped me

in identifying and formulating the schemes’. The District Manager is like everybody’s man,

to be trusted and looked upon as a guide. There are stories galore of how the poor helpless villagers reaped huge benefit of this process. Whether project officer of DRDA or chairman of the RRB,

they represent different hues of

rural spectrum; they come from different strata of the society, but they all acknowledge – NABARD DDM is here to stay and impact the rural populace for better.

“Women do more than sixty percent of the work done in the world. They get ten percent of the worlds’s income and own one percent of the world’s property”. – Kamala Bhasin 54

A Super market franchise by a women group of Herle in Kolhapur is an audacious venture by empowerment SHG members.

Worldâ&#x20AC;&#x2122;s Largest Ever Micro Credit Programme Rupali Patil

of Herle in Kolhapur dist. like all

other members of her group had a moderate education having passed her SSC.

The wom-

en about twenty in number formed the group called Kamdhenu Bachat Gut. They had done fairly well in getting a decent income. But she persuaded other group members and collaborated with two more self help groups to take up a franchisee of Varna Bazar a chain of super markets which sells everything from pin to piano. Interestingly, Varna Bazar was established when malls had not even made their entry in the metros. The group borrowed Rs.4.10 lakh from the Dist Coop. Bank.

In the

very first two months the turnover of the super bazaar crossed Rs.2 lakh. 56

Three months

SHG Meeting at Bibhavne in Sindhudurg. The meeting is a good platform for the women to sort out their problems

down, the daily collection is in the region of Rs.6000.

Full of confidence and poise, the

women are sure this is the end of their long drawn struggle. The concept of self help groups has created a groundswell of support for the poor in the countryside.

Those who had never known living the life in dignity have suddenly found

that life is worth living. For once, NABARDâ&#x20AC;&#x2122;s initiative to establish the SHGs has exploded the myth that the poor are not creditworthy. Only a decade back, a villager would be too nervous to even enter the bank premises.

The banking system made

a deep penetration in the rural areas, acquired

phenomenal

outreach

and

built a legendary network which fans out even to the remote rural pockets in the country. And yet, much to the chagrin of the policy makers, the formal banking services were out of bounds Katha Stitch in Vardhaman. 58

Dokra work in Daryapur, Vardhaman.

for those rural poor who needed them most. NABARDâ&#x20AC;&#x2122;s experiment with the groups of rural poor has brought a great synergy of group dynamics to make a deep impact on the rural scenario. The existing banking network boasts of more than 150000 retail outlets in the countryside. But these poor people had no collateral security to offer or no sureties to guarantee their repayment. Obviously the existing banking framework would not accept them as bankable. The challenge lay somewhere else. The need was to put in place a subsystem as a corollary to the existing banking network which was at once cost effective and user friendly for banks and the rural poor. During the last two decades,

NABARD has persevered

in linking the poor

in very large

numbers to the formal banking sector and making it cost effective for the bankers. SHG-Bank linkage programme

The

as it is now popularly known, has emerged as the largest

micro finance outreach programme in the world. It is also the most cost effective and fastest growing micro finance initiative the world over.

The biggest strength of the self help lies in

its simplicity and the fact that development agencies and bankers have to leave the operations of the group completely to the group dynamics.

Micro enterprise promotion (Handicrafts) - training for women SHGs.

In Clusters They Prosper Under

the

area

development

approach,

NABARD

identifies

geographically

bounded

concentration of similar, related or complementary business activity. Such a group of entrepreneurs have common opportunities and threats and they would prefer to have shared infrastructure, markets and services.

NABARD has so far developed 56 clusters

which benefit the artisants in the similar kind of trade.

There are many more clusters

coming up every year. The clusters need to develop sustainable competitive advantage through technology up gradation

and

transfer, raw material access, skill development, managerial inputs, credit

support and marketing assistance.

Cashew processing unit by Gopuri Ashram, Kankavli Sindhudurg.

Once the cluster activity is identified a diagnostic study is undertaken to prepare an action plan for the cluster and to find solutions to the specific problems faced by the cluster.

One

element that comes from these local institutions is the motivation for the new activity.

The

initial programme for small duration acts a awareness or appreciation course.

Only then the

artisan is ready to take up the advanced skill programme for capacity building. It is necessary to increase the product range and improve quality and productivity. There is now realization among the cluster members that it is no use produce what they can but produce what the market demands and of the quality that is acceptable to the market. The cluster also has to constantly look out for technology up can they be sure of providing a cutting edge competitiveness.

gradation because only then The Cluster Development

Committee has to constantly monitor the progress and review the cluster status and action plan suggesting stage-wise action for a period of 5 years so that total strategy for skill development, resource mobilisation, raw material supply, marketing strategy, organisation and management, could be covered.

Man - despite his artistic pretensions, his sophistication, and his many accomplishments owes his existence to a six inch layer of topsoil and the fact that it rains.

- Author Unknown

Mother nature provides for everybodyâ&#x20AC;&#x2122;s need but she has no means to satiate human greed.

... And The Fact That It Rains Although the techniques of watershed development are as ancient as the civilization, in its modern day popularity in the countryside, it owes much The

earlier

drought-affected

areas

which

have

to the initial impetus by NABARD.

adopted

the

watershed

development

disciplines, have demonstrated almost a magical transformation in the topography from arid semi dessert zone to lush green lands with ample water for irrigation. Till the early 80s, people had not heard much of watershed.

Interestingly, the word still does not have

exact synonym in many vernacular languages. It was only when NABARD took initiative through a few NGOs to popularise the concept and show its advantages that watershed development gained much momentum. Regeneration of degraded natural resources through an integrated approach for enhancing productivity under rain fed agriculture has assumed critical importance and NABARDâ&#x20AC;&#x2122;s foresight in pushing the watershed development has indeed gone a long way in providing succor for the rain fed and dry lands. Each watershed ideally spreads across hundreds of or even thousands of hectares of land which involves number of contiguous villages. No technology particularly in the rural ambience can ever be successful if it does not take into account the dynamics of human behavior. 68

Similarly success in the watershed development 69

No program for watershed development can ever be successful unless it becomes a peopleâ&#x20AC;&#x2122;s movement driven by strong local leadership.

programmes largely depends upon peopleâ&#x20AC;&#x2122;s participation. To cite a simple example, grazing on the hill tops is an age old practice in all the villages.

But developing

a watershed

requires that the animal taken for grazing do not destroy the roots of natural vegetation on the hill tops. These roots absorb the first shock of the rain drops hitting the ground and later let the water trickle down gently without damaging the top soil. NABARD has, therefore, roped in number of NGOs and village level community based organizations like Village Watershed Committees (VWCs) in all such programmes. It is through these institutions that the practices of watershed techniques are popularized and ultimately find acceptance by the rural people. The impact of the programme has been quite visible and convincing.

It has helped empower the whole rural community.

Demand for credit in these areas which were reeling under the

Bhalki watershed in Vardhaman Dist. of West Bengal reaping rich yield for the farmers.

devastating draughts has gone up because of irrigation.

It enables them a cash crop.

Many

a success story is scripted by these villagers with regular exports of vegetables and earning in foreign earnings.

Infrastructure also includes primary education for children in the villages.

Tutored to Prosper in Rural India The children of Kadapakkam,

a small village in

Kancheepuram district of Tamil Nadu had to walk miles to pursue primary education. However, a small school started with the help of a philanthropist and the earnest efforts of the villagers has now blossomed into the present â&#x20AC;&#x2DC;Shri P. Krishna Higher Secondary Schoolâ&#x20AC;&#x2122;. The existing school structure could not cater to the growing number of students. Then came a glimmer of hope when the State government

availed

RIDF

assistance

from

Nabard for infrastructure expansion and provision of basic amenities in the school. constructed

class

rooms

with

Apart from well good

ventilation,

availability of toilet facilities for boys and girls 74

A bridge across rural India. Building rural infrastructure.... Connecting people

separately, copious drinking water and lab facilities

drastically improved the learning

environment of the school. Along with an increase in the enrolment in percentage also got a moral boost.

The PTA and

the school, the pass

the village education committee have

expressed their profound gratitude to Nabard. In fact the CM of Union territory of Pondicherry was so impressed with the project that he deputed engineers from his govt. to study the same for replication in Pondicherry. Like the schools, the rural India has many basic amenities in short supply. There is too much of pressure of growing population and the existing infrastructure like irrigation, water harvesting structures, roads and bridges connecting rural areas and market places, proper storages for agri-produce, well managed forests to keep harmony with environment, schools for rural children to avoid miles of walking and so on. It was precisely with this in mind that the concept of Rural Infrastructure Development Fund was mooted in 1995. Dr. Manmohan Singh Hon. Prime Minister who was then heading the Finance had said â&#x20AC;&#x153;Inadequacy of public investment in agriculture is today a matter of general concern. This is an area which is the responsibility of States. But many states have neglected investment in infrastructure for agriculture. There are many rural infrastructure

Connectivity and rural development go together.

projects which have been started but are lying incomplete for want of resources. They represent a major loss of potential income and employment to rural population.â&#x20AC;? Skewed in favour of the urban people, particularly the metros, the distribution network of precious resources for the rural areas needed a closer look. The development agencies were found caught in the rigmarole of procedures and more procedures. And the rural populace suffered silently despite all pious intentions. The pace of building infrastructure in villages remained sluggish. Inevitably, we witnessed a situation where villagers were clamoring for drinking water, for irrigation projects, for bridges to connect them to nearby towns. There were a plethora of agencies to give advice on what should be done. There were none to provide succor. Initially, Nabard concentrated only on incomplete irrigation projects. On the basis of exhaustive study of the incomplete infrastructure projects in various states such projects were selected which could be completed in shortest possible period so as to unlock the sunk investments and thus realizing prompt benefits. The scope was widened to accommodate projects like harvesting of rain water, construction of terminal and rural markets, construction of bridges and service roads. And today Nabard

One of the most prestigious infrastructure projects under RIDF by NABARD - Dewas irrigation cum drinking water which will supply drinking water for 104 villages in Udaipur Dist.

Sapua Badajore mid irrigation project in Hindol block Dhenkala Dist. - an integrated project of dam, link channels and barrage at Nuabad. the project has brought 2,520 ha. of land under irrigation.

has offered to provide assistance even to the primary school buildings, village haats, tube wells and forest management. Besides the much needed funds that are made available, the state governments have richly benefited by NABARDâ&#x20AC;&#x2122;s expertise in project formulation, supervision and monitoring. The infrastructure projects in rural areas are being put in the framework of banking disciplines. Once the project is approved,

the project has an uninterrupted supply of funds till it reaches

its completion. The project is never allowed to be abandoned for want of funds. Project approach to these schemes have brought about a more professional and time bound framework. NABARD also ensures that in irrigation projects the involvement of the direct beneficiaries is brought about by formation of pani panchayat, a democratic set up of the local people who agree to adhere to the norms and conditions laid down for use of water. For the rural poor living in small hamlets and mud houses,, RIDF has given a glimmer of hope and a bit of comfort they truly deserve.

Low cost potatoes storage system by Mylliem farmers’ club east khasi hill under rural innovation fund.

Encouraging Innovations in the Rural Operations Any enterprise in the rural areas can attain a level of success only if it finds ways to market its product.

The country side has many

gifted talented entrepreneurs who bring out novel

ideas and novel applications to these ideas in their own environment which if

developed

and scaled up, can result in substantial value addition to our artisans and farmers. The Rural Innovation Fund in NABARD is an attempt to spot and develop such innovations. NABARD has devised different ways to help

these progressive innovative artisans by

extending financial assistance under its Rural innovation Fund. NABARD

has constituted the “NABARD Rural Innovation Fund (RIF)” to support innovative

projects in Farm, Non-Farm and Micro-Finance Sectors leading to creation of livelihood opportunities for the poor. The guiding principles for the operations of RIF are broadly as indicated below: • The activities must have the rural poor in their focus and must be innovative, experimental and demonstrative in nature leading viability. 84

replicability

and

commercial

Brim Mawphnniang and his family the proud owners of rain water harvesting Jalkund from Umdihar in Ri-Bhoi, Meghalaya-one more project under rural innovation.

â&#x20AC;˘ The activities funded may involve development of new products, processes, prototypes, technology, patenting and extension support. â&#x20AC;˘ Appropriate action research and studies contributing to better understanding of rural development issues, policy and process implementation may be undertaken. All innovations and related activities in the Farm, Rural Non-Farm and Micro-Finance sectors can have access to the RIF.

The innovation should provide technology and skill

up gradation, inputs supply and market support leading to promotion of viable enterprises, sustainable employment, infrastructure development, improved flow and access of credit to rural entrepreneurs.

Further it should improve efficiency of credit delivery and other support

services to the rural resource poor. Individuals,

NGOs,

Community

Based

Organisations,

SHGs,

Farmerâ&#x20AC;&#x2122;s

Club,

Panchayati

Raj Institutions and Corporates who have the expertise and willingness to implement innovative ideas for improving the quality of life in rural areas can approach the bank for the assistance.

Saiden farmers club in Meghalaya under financial inclusion technology fund of NABARD has established e--village to act as knowledge centre.

Financial Inclusion Indian economy in general and banking services in particular have made rapid strides in the recent past. However, a sizeable section of the population, particularly the vulnerable groups, such as weaker sections and low income groups, continue to remain excluded from even the most basic opportunities and services provided by the financial sector. In order to address the issues of financial inclusion, the Government of India constituted a “Committee on Financial Inclusion” under the Chairmanship of Dr. C. Rangarajan. The Committee submitted its final report to Hon’ble Union Finance Minister on 04 January 2008. It is the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost. On the recommendations of the committee NABARD has established Financial Inclusion Fund and Financial Inclusion Technology Fund. The first Financial Inclusion Fund is to support

developmental and promotional activities

with a view to securing greater financial inclusion, particularly among weaker sections, low income groups and in backward regions which are so far unbanked.

The latter is to

enhance investment in Information Communication Technology (ICT) aimed at promoting financial inclusion, stimulate the transfer of research and technology in financial inclusion, 88

Waiting to be included ? ... Financial inclusion is for these people.

increase the technological absorption capacity of financial service providers/ users and encourage an environment of innovation and cooperation among stakeholders. With an overall corpus of Rs. 500 crore contributed by the Union Government, Reserve Bank and NABARD

Financial Inclusion is to support capacity building inputs to Business

Facilitators and Business Correspondents; nurture self help groups to get linked with the banks besides many related functions. The Financial Inclusion Technology Fund with similar contribution is to encourage user friendly

technology

solutions,

provide

financial

support

technological

solutions

for

providing affordable financial services to the disadvantaged. The efforts are also to create a common technology infrastructure with comprehensive credit information. To reach out to these vulnerable sections all these activities are to be taken by NABARD, commercial, cooperartive and rural banks, NGOs, the service providers even post offices and railways.

NABARD Head Office, Mumbai

A NEW LAND MARK RISES AT MUMBAI “As of today, NABARD is the most effective and strong instrument in agriculture and rural economic system. For me, it is difficult to even imagine that without institutions like NABARD, how we can implement our programmes in rural economic system”,

said the then Finance

Minister Mr. Yeshwant Sinha on Jaunary 18, 2001 addressing the gathering at the inauguration of the Nabard Building in Mumbai. He called it a historical occasion because after 18 years of its establishment, Nabard was entering its own new house and averred that this will help improve its efficiency and competency.

The new head office building of Nabard at Bandra

Kurla complex opened a new chapter in NABARD’s corporate history. The first generation Nabardians would recall the July 12, 1982 function that took place in Poonam Chambers at Worli where the then Chairman Mr. M. Ramkrishnayya formally inaugurated the country’s apex rural development bank. All the employees, and that included the seniors like Mr. Sant Das the first Managing Director, Mr. G. P. Bhave, the first Chief General Manager, stood ceremoniously to watch the historic moment of NABARD coming into existence. They took a solemn oath dedicating their services towards integrated rural development and securing prosperity of the rural areas through this new institution. 92

The agenda for rural development is set by these hands.

Poonam Chambers a prestigious address of the metropolis of Mumbai housed the Registered Office or almost all the policy departments of the new institution on the ground floor and first floor which was in fact a leased premises. Till 1997, the two most important departments i.e. Personnel Policy and Credit Policy continued to function from the plain and unassuming premises.

It didnâ&#x20AC;&#x2122;t have elaborate security that we have today and it didnâ&#x20AC;&#x2122;t wear elegance

of the corporate office.. On 16 September 1997 Nabard witnessed colossal loss to its property and death taking away two precious colleagues in the prime of their lives. Poonam Chamber fell into rubbles on the lunar eclipse day. Those who were caught in to it and those who witnessed the monolith structure of cement concrete come twisting and turning and heaving down with a rumble, for them it was a day they had better put behind. years, different

Nabard

offices

premises

Dadar and Worli.

For next two and half

were

scattered

Santacruz,

Andheri,

True development is possible only when dreams and aspirations of a new generation can be fulfilled.

Since then, it was a long outstanding desire of all nabardians to have their own house – a corporate office. And finally the ribbon was cut.

was the day of Grihapravesham in Nabard’s new vaastu, the majestically reposed white office sprawled in dignified and quiet splendour in Mumbai’s prestigious business address – Bandra Kurla Complex.