The National Bank for Agriculture and Rural Development (NABARD) has so far promoted the formation of 6,215 Farmer Producer Organisations (FPOs) under various government schemes. Finance Minister Nirmala Sitharaman informed the Lok Sabha that NABARD’s key support to these FPOs includes assistance with their formation, capacity building, credit facilitation, financial literacy, and establishing market linkages to improve their operational viability.
She added that NABARD, in collaboration with the Small Farmers’ Agri-Business Consortium (SFAC) and the Open Network for Digital Commerce (ONDC), has organized FPO Melas titled “TARANG – Celebrating Collectivisation” at 50 different locations across 24 states and union territories. These events showcased FPO products and aimed to strengthen the marketing and branding efforts of these farmer collectives.
NABARD also provides loan assistance to state governments for rural infrastructure development through multiple funding mechanisms. These include the Rural Infrastructure Development Fund (RIDF), NABARD 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).
Sitharaman explained that yearly state-wise allocations under RIDF are determined by funds earmarked from the Reserve Bank of India’s Priority Sector Lending (PSL) shortfall. However, for other funds, allocations depend on proposals submitted by the states or union territories rather than fixed annual budgets.
Due to a reduction in the PSL shortfall fund in 2024–25, RIDF allocations to states also saw a decline. Despite this, NABARD’s financial support through these funds continues to bolster rural infrastructure by enhancing roads, irrigation systems, and storage facilities. These improvements have led to better productivity and expanded market access, which in turn has helped rural borrowers make more effective use of credit.
The Finance Minister shared that, during the financial years 2022–23 to 2024–25, NABARD sanctioned Rs 1,40,789 crore under RIDF and disbursed Rs 1,22,595 crore. Under other funding mechanisms, Rs 47,617.63 crore was sanctioned, out of which Rs 36,439.63 crore was disbursed during the same period.
