Ensuring Rural Infrastructure in India: Role of Rural Infrastructure Development fund

Abstract

Inclusive economic growth is the most talked about issue in India. This is due to the fact that the impacts of the recent spectacular growth have not been able to percolate down to various segments of population, most importantly to the rural population. Rural infrastructure in India have still remained far from satisfactory and amongst others, lack of funds is one critical reason for this. In order to ensure smooth flow of funds for the development of infrastructure in rural India, rural infrastructure development fund (RIDF) was introduced in the budget of 1995-’96. The Reserve Bank of India (RBI) governs this fund through NABARD with corpus from the commercial banks. This paper is an attempt to critically examine some of the issues that arise in the context of utilization of the fund by different states of India. The study finds that many projects remain incomplete even after receiving funds under RIDF and certain measures are necessary to ensure proper utilization of funds as well as to reduce intra rural disparity in India.Key Words: Rural Infrastructure Development Fund, Corpus, RIDF Tranche