Finance Minister Nirmala Sitharaman informed the Lok Sabha that the National Bank for Agriculture and Rural Development (NABARD) has provided over ₹1.59 lakh crore in loan assistance to state governments for rural infrastructure development over the last three financial years (2022–23 to 2024–25). A significant portion, ₹1.23 lakh crore, was disbursed under the Rural Infrastructure Development Fund (RIDF), while the remaining ₹36,439 crore was allocated through other schemes.
These additional schemes include NABARD’s Infrastructure Development Assistance (NIDA), Rural Infrastructure Assistance to State Governments (RIAS), Long-Term Irrigation Fund (LTIF), Micro Irrigation Fund (MIF), Food Processing Fund (FPF), Warehouse Infrastructure Fund (WIF), and the Fisheries and Aquaculture Infrastructure Development Fund (FIDF). These initiatives collectively support the creation of rural roads, irrigation systems, and storage infrastructure, helping boost productivity and improve market access for rural communities.
Sitharaman explained that such infrastructure improvements enhance the capacity of rural borrowers to effectively utilize credit. NABARD also supports the rural credit ecosystem through concessional short- and long-term refinance to Cooperative Banks and Regional Rural Banks (RRBs) for agricultural lending. According to NABARD’s All-India Rural Financial Inclusion Survey (NAFIS) 2021–22, the proportion of agricultural households accessing institutional credit rose from 60% in 2016–17 to 75% in 2021–22.
The Finance Minister also noted that NABARD has promoted the formation of 6,215 Farmer Producer Organisations (FPOs) through various schemes. These FPOs receive support in terms of formation, capacity building, access to credit, market linkages, and financial literacy. In collaboration with the Small Farmers’ Agri-Business Consortium (SFAC) and Open Network for Digital Commerce (ONDC), NABARD organized FPO Melas at 50 locations across 24 states and Union Territories to promote marketing and branding of FPO products.
To further improve credit accessibility for farmers, the government has raised the collateral-free loan limit under the Kisan Credit Card (KCC) scheme from ₹1.6 lakh to ₹2 lakh and included allied sectors like animal husbandry and fisheries. It has also implemented the Modified Interest Subvention Scheme (MISS), which offers loans up to ₹3 lakh at a 4% interest rate with Prompt Repayment Incentives (PRI). In the Union Budget 2025–26, this ceiling has been further increased to ₹5 lakh, enhancing credit outreach for farmers.
