NEW DELHI: As part of the drive to double income of farmers by 2022, the government has raised the authorised capital of Nabard by six times to Rs 30,000 crore to help it increase its lending to the rural economy.
"The Central Government hereby increases the capital of the National Bank for Agriculture and Rural Development from five thousand crores of rupees to thirty thousand crore rupees," said a April 10 notification of the finance ministry.
A bill in this regard was approved by Parliament earlier this year.
The increase in authorised capital will enable Nabard to respond to commitments it has undertaken, particularly in respect of the Long Term Irrigation Fund and on-lending to cooperative banks.
Further, it will help Nabard (National Bank for Agriculture and Rural Development) to augment its business and enhance its activities, thus facilitating promotion of integrated rural development and securing prosperity of rural areas, including generation of more employment.
Nabard was set up in 1982 to promote sustainable and equitable agriculture and rural development through participative financial and non-financial interventions, innovations, technology and institutional development for securing prosperity.
The development finance institution also aims to increase its long-term on-lending or refinance portfolio to about Rs 80,000 crore in the current fiscal as part of its effort to improve the rural economy.
The institution's on-lending in 2017-18 was Rs 65,000 crore.
The government in the Budget had enhanced the corpus of the Rural Infrastructure Development Fund (RIFD) to Rs 28,000 crore with an overall objective of doubling farmers income by 2022.
Nabard is the main agency for implementing RIFD scheme.
It has also been for implementing several key funds such as Long Term Irrigation Fund (LITF), Minor Irrigation Fund (MIF), Agriculture Marketing Fund, Fund for rural housing (PMAY-G), and Dairy Infrastructure Development Fund (DIDF), for supporting rural sector.