It is “diverting funds meant for rural warehousing to rich corporates,” he writes to PM
CPI leader Gurudas Dasgupta has written to Prime Minister Manmohan Singh, drawing his attention to the National Bank for Agriculture and Rural Development (Nabard) “working against the interests of the rural poor.”
Mr. Dasgupta has urged him to “initiate a thorough probe into its functioning in order to bring the much-needed relief to the rural poor.” For, the “Nabard has forgotten its mandate of ensuring rural prosperity, especially for farmers, and is instead diverting funds from a Rs. 2,000-crore corpus meant for creation of warehousing facilities in rural India to rich corporates.”
The letter quotes from an article published in The Hindu on December 10, 2012 detailing the modus operandi, which enabled disbursement of Rs. 759 crore, including as refinance to various banks to fund 516 warehouses and cold storage projects of private entities during March 16-31, 2012. Shubham Logistics, a subsidiary of the over Rs. 6,000-crore Kalpataru Group in particular, was handpicked for an interest rebate of 1.5%, allowing it to access Rs.115 crore under a government scheme at a concessional 6.5% rate, versus the market rate of 10.5%. The company, which was disbursed a total of Rs. 180.97 crore to set up 18 warehouses, became the beneficiary of another 15% subsidy under another government scheme.
Shift in priorities
The “evidence shows that Nabard’s shift in priorities is directly linked to the leadership of its chairman, Mr. Prakash Bakshi, who, in a significant deviation of policy, included private entities as eligible institutions without consulting the RBI, via a circular of September 27, 2011,” Mr. Dasgupta said.
“The Hindu, in an article published on January 28, 2013, says that the Nabard has scrapped its controversial scheme for corporate warehousing. However, this article details more information about Nabard’s favouritism towards rich corporates and harsh treatment to the rural poor for whom these schemes were originally intended. In addition, the Nabard is choking credit to the State Co-operative Agriculture and Rural Development Banks (SCARDBs) which directly impacts credit to poor and often suicidal farmers,” writes Mr. Dasgupta.