What is RIDF?
In 1995-96, the Government of India set up RIDF for financing ongoing rural infrastructure projects. The funds released under RIDF are maintained by the National Bank for Agriculture and Rural Development (NABARD). The main objective of the fund is to provide loans to State Governments and State-owned corporations to enable them to complete ongoing rural infrastructure projects. These funds are provided on a year-to-year basis by the Government of India.
The first tranche of RIDF (RIDF-I) was launched with an initial corpus of Rs 2,000 crore. Under its twenty-fourth tranche (RIDF- XXIV), the government allocated Rs. 28,000 crore.
Activities under RIDF:
There are three broad categories of RIDF under which 37 eligible categories are approved by the Government of India. These categories are-- Agriculture and related sector, Social Sector and Rural Connectivity.
Activities permitted under Agriculture and related sector:
1. Minor Irrigation Projects/ Micro Irrigation
2. Soil Conservation
3. Flood Protection
4. Watershed Development/ Reclamation of waterlogged areas
6. Forest Development
7. Market Yard, Godown, Mandi, Rural Haat, Marketing Infrastructure
8. Cold storage, Public/ Joint sector cold storage at various exit points
9. Seed/ Agriculture/ Horticulture Farms
10. Plantation and Horticulture
11. Grading/ certifying mechanisms; testing/ certifying laboratories
12. Community irrigation wells for the village as a whole
13. Fishing harbour/ jetties
14. Riverine Fisheries
15. Animal Husbandry
16. Modern Abattoir
17. Medium Irrigation Projects
18. Mini Hydel Projects/ Small Hydel Projects (up to 25 MW)
19. Major Irrigation Projects (already sanctioned and under execution)
20. Village Knowledge Centres
21. Desalination plants in coastal areas
22. Infrastructure for Information Technology in rural areas
23. Infrastructure works related to alternate sources of energy viz. solar, wind etc. and energy conservation
24. 5/10 MW Solar Photovoltaic Power Plant
25. Separate Feeder Line
26. Dedicated Rural Industrial Estates
27. The mechanisation of Farm Operations and related services
Activities permitted under Social Sector:
29. Infrastructure for Rural Education Institutions
30. Public Health Institutions
31. Construction of toilet blocks in existing schools, especially for girls
32. "Pay & use" toilets in rural areas
33. Construction of Anganwadi Centres
34. Setting up of KVIC industrial estates/centres
35. Solid Waste Management and Infrastructure works related to sanitation in rural areas
Activities permitted under Rural Connectivity:
36. Rural Roads
37. Rural Bridges
RIDF: Eligible Institutions
The eligible institutions under RIDF are as follows:
1- State Governments / Union Territories
2- State Owned Corporations / State Govt. Undertakings
3- State Govt. Sponsored / Supported Organisations
4- Panchayat Raj Institutions/Self Help Groups (SHGs)/ NGOs
It must be noted that these projects must be submitted through the nodal department of State Government, i.e. Finance Department.
RIDF: Mode of Finance
The National Bank for Agriculture and Rural Development (NABARD) releases the sanctioned amount on reimbursement basis except for the initial mobilization advance @30% to North Eastern & Hilly States and 20% for other states.
RIDF: Loan Eligibility
The project for the social and agricultural sector, rural connectivity-- are eligible for 80% to 95% loan of the project cost.
RIDF: Repayment of Loans
The loans issued must be repaid within seven years in equal instalments. This time period includes two years grace period. The interest must be paid at the end of each quarter-- March 31, June 30, September 30 and December 31.
The loans sanctioned under this will be secured the by the letter of concerned authority registered with-- RBI/Commercial Bank, TPN, etc.