Indian Fiscal Budget 1997-98: Full Text

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Rural Credit

  1. Agriculture is the lifeblood of our economy. The CMP calls for a doubling of the flow of credit to agriculture and agro-industries within five years. In 1996-97, the first year of this government, it is estimated that credit flow to agriculture will increase from about Rs.22,000 crore to nearly Rs.28,600 crore an increase of an unprecedented Rs.6,600 crore.

  2. Hon'ble Members will be glad to know that the Rural Infrastructure Development Fund (RIDF) has proved to be popular and successful. Under RIDF-I, Rs.2,000 crore was sanctioned for 4,530 projects. By March 1997, disbursements will amount to about Rs.1,400 crore. Under RIDF- II, 8,387 projects worth over Rs.2,500 crore have been sanctioned. RIDF III will be launched in 1997-98 and Rs.2500 crore will be provided. I urge the States to continue to make the best use of these funds.

  3. The policy of recapitalising the Regional Rural Banks (RRBs) will continue next year. I am providing Rs.270 crore for this purpose. I also intend to allow a greater role to sponsor banks in the ownership and management of RRBs.

  4. NABARD is being strengthened. NABARD has been given Rs.500 crore as advance additional share capitalRs.100 crore by government and Rs.400 crore by RBI in the current year. The share capital will be augmented by a similar allocation in 1997-98. I am also glad to announce that, as promised last year, NABARD has promoted and incorporated this month state level agricultural development finance institutions in three States as joint ventures. More will be incorporated next year.

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