August 3, 2017
Mumtaz Sanghamita speaks on The National Bank For Agriculture and Rural Development (Amendment) Bill, 2017
Thank you Chairman Sir for allowing me to speak on NABARD Amendment Bill, 2017. Agriculture is a primary source of livelihood for 60 to 70 per cent of the population but its contribution to GDP is only 17.5 %. Agricultural growth in India is not constant; it is volatile. Though there is gradual increase in various grain productions, farmers’ economic status is very poor and beyond imagination. Improvement of agriculture should the main focus for rural development.
NABARD Act was formulated in 1981 which came into force in 1982. NABARD offers innovation with regards to formulation and monitoring of schemes monitoring etc. NABARD also helps in policy making, planning the implementation of the credit mechanism. It helps to carry out agricultural and other economic developmental activities. NABARD is investing mostly in the agricultural sector with growth rate of 12.16%. Till now the authorised capital of it is Rs 5000 crore and now with this amendment it will go up to Rs 30,000 crore.
This amendment will help introduce new credit products, new linkage and development, new clients and will help to give lower rates credit to kisan. The primary effect of the Bill is to transfer the share of RBI to Central Government. As per the original Act, the Central Government and the RBI together must hold 51% share in the bank. The new amendment transfers RBI’s Rs 20 crore stake to the Government in return of the equal amount.
And another point in the amendment is updating the Act. The present legislation is out of date with respect to industry ombudsman and the amendment brings it in line with the existing practice. The Bill replaces updated terminology – at ‘small scale industry and terminal and decentralised sectors’ with the term ‘microenterprises, small enterprises and medium enterprises’ as introduced by the MSME Development Act, 2006.
The Bill also proposes that NABARD will provide credit and other services to enterprises with investment upto Rs 10 crore; an increase from the previous figure of Rs 20 lakh in the original Act. Amendments in the Bill substitute provisions and definitions from ‘The Companies Act, 1956’ and replaces them with the corresponding updates and references from ‘The Companies Act, 2013’. Through the proposed amendments, existing conflicts of interests are removed.
The Act is updating, reflecting and changing the laws consistent with other legislations and industrial practice. I support this Bill. Thank you very much.