NABARD to play a pivotal role, says Finance Minister

New Delhi, July 24, 2014:

National Bank for Agriculture and Rural Development (NABARD), India’s apex development financial institution, organized a National Seminar on Rural Finance in the Capital on July 24, 2014, commemorating its 33rd Foundation Day.

The day-long workshop deliberated upon three major themes — Capital Formation & Rural Infrastructure, State of the Sector of Rural Finance and Microfinance & Livelihoods Approaches.

Inaugurating the Seminar, Union Finance Minister Shri Arun Jaitley lauded NABARD’s 32 “useful and productive” years spent in nurturing agriculture and rural development in the country. “NABARD was assigned a challenging task and no doubt NABARD has done a lot but still there’s a lot to be done to bring about all-round development, especially in the field of rural housing where each family should have a house with access to a road connection, clean drinking water, power, and a toilet,” he said.

The minister urged academics and policy makers, officials from key ministries of the Government of India, State Governments, Planning Commission, Reserve Bank of India, Commercial Banks, Cooperative Banks, Regional Rural Banks, scientists from agricultural research institutes, Panchayat Raj Institutions and NGOs, among many others to use this forum for introspection of achievements and shortcomings which NABARD can use to ameliorate the conditions of the poor.

Dr Harsh Kumar Bhanwala, Chairman, NABARD, in his inaugural session outlined the role played by NABARD over the last 32 years. He set the agenda for the day and also enumerated the role played by NABARD, namely, project financing, development of SHG-Bank Linkage Programme, wadi, watershed, rural infrastructure and Kisan Credit Cards.

The first session on Capital Formation in Agriculture and Rural Infrastructure was chaired by Smt Arundhati Bhattacharya, Chairperson, State Bank of India, who while underlying the fact that though there has been 12% growth in agriculture lending, the real growth is just 3%. She laid great emphasis on post production process which holds the key to growth and prosperity of small and marginal farmers.

She also seconded CRISIL’s Senior Director and Chief Economist Shri DK Joshi’s opinion how it is not just about capital formation in and for agriculture, but also about policy intervention that can bring about a positive change in this area. Quoting a World Bank study, Dr Ashok Gulati, Professor, Indian Council for Research on International Economic Relations, highlighted how growth in agriculture can bring down poverty by about 3%. The session highlighted the importance of rural infrastructure and the multiple spin offs it can generate.

Chaired by Dr Deepali Pant Joshi, Executive Director, Reserve Bank of India, the second session on Rural Finance: State of the Sector dwelled upon the fact that the number of small and marginal farmers’ accounts were miniscule among the new accounts opened highlighting the fact that there is an urgent necessity to bridge this financial exclusion.

The third session on Microfinance and Rural Livelihoods was chaired by Padma Shree Aloysius Fernandez, Chairman, NABFINS, a subsidiary of NABARD. The session took an incisive view of the role played by the SHG-Bank Linkage Project, world’s largest microfinance programme today. The panel members, from a wide arena of development sector shared their experiences in the sector. A common theme was that the SHGs need to graduate to the next level of becoming Producers’ Organisations.

The event concluded with a valedictory address by Dr HR Khan, Deputy Governor, RBI, who summed up the deliberations and stressed upon the role of formal financial institutions in holistic development of rural India.