The Hindu Business Line : Floriculture hub: Govt seeks Nabard aid

The State Government has sought assistance from the National Bank for Agriculture and Rural Development (Nabard) and financial institutions for the project to help boost floriculture exports from the State. The appeal for assistance was made by the Additional Chief Secretary and Development Commissioner of Karnataka, Mr A.K. Agarwal, at a Nabard seminar.

Credit disbursal: Mr B.B. Mohanty, Chief General Manager, however, said some issues required to be addressed for accelerating credit disbursal in the State. This included acceptance of the Vaidyanathan Committee report for co-operative bank reforms.

The suggested reforms included writing-off of non-performing assets. For assessing the quantum of write-offs, a panel of independent auditors would be required and assess the quantum of capitalisation required for the purpose, he said.

Six States had accepted the proposals and the reforms were in various stages of implementation. Karnataka, he said, was yet to ratify the proposals. The proposals also included reducing the State Government's stake in the co-operative banks to less than 25 per cent and managerial reforms.

These changes were essential for strengthening the short-term and long-term co-operative credit structure in the State. These structures were weak in the State. Though the State Government had made some budgetary provisions for interest waivers during the current year, these were not sufficient, Mr Mohanty said. More support was necessary, he added.

Nabard also wanted amendments to the existing co-operative societies statute for better credit. In addition, it had also sought budgetary provisions for settling the claims of co-operative banks during 2005-06. Nabard had also sought Government guarantees and managerial reforms for the revival of co-operative sugar mills.

Credit requirement: For the next fiscal year, credit requirement in the State was estimated at Rs 17,803 crore, of which Rs 10,884 crore was for agriculture and allied sectors. Besides, Nabard had also begun efforts for identifying sectoral credit requirements and including those for the non-farm rural sector.

This year, Nabard had provided refinance to the extent of Rs 5,729 crore, which mainly contributed for capital formation in agriculture.

Besides, another Rs 1,300 crore was provided for productions credit to the co-operative sector and regional rural banks.