NABARD prepares Potential Linked Credit Plans (PLPs) for each district of India to enable effective utilization of credit and rural development resources. The document discusses the PLP process in Orissa and provides an overview of the state's economy, banking profile, trends in ground level credit flow, and NABARD's development assistance to the state. Key points include increasing agricultural credit disbursements, a focus on improving credit in KBK regions, and NABARD sanctioning over Rs. 2,154 crores for rural infrastructure projects in Orissa through RIDF funds.

1. EXECUTIVE SUMMARY
Part A : Overview of State Focus Paper 2006-07
1.1. Introduction
National Bank for Agriculture and Rural Development, being the apex bank in the country for
agriculture and rural development, is mandated with the mission of bringing rural prosperity
through effective credit support, institutional development and other innovative initiatives. In
line with the expectations, NABARD has been taking several initiatives to promote equitable
agricultural development and sustainable rural development through a variety of interventions
such as credit planning, SHG-Bank linkage programme, RIDF, institutional development and
supervision of RRBs and Cooperative Banks apart from policy advice and technical support for
the rural banking system.
1.2 Planning is the cutting edge of development and over the years, the planning process,
both credit planning and development planning in the districts, has been decentralised. In order
to make accurate planning process at micro level, NABARD has, since 1987-88, taken the
initiative of forging a link between the credit planning mechanism of banks and the development
planning process of the government by preparing Potential Linked Credit Plans (PLPs) for each
district of the country. The main objectives of PLP are to enable the various organisations
involved in the process of rural development in directing their efforts in a planned manner, in
accordance with potentials available for exploitation and to enable optimum utilisation of scarce
financial resources (specifically bank credit) by channeling the same into sectors with growth
potential. Thus it is a total Plan document which not only identifies the potentials of the district
but also points out the gaps in infrastructure supports which need to be taken care of for
exploiting the potentials.
1.3 NABARD had prepared Base Potential Linked Credit Plans (Base PLPs) coterminous
with X Five Year Plan period (2002-03 to 2006-07) for all the districts of the state. The credit
projections made in the Base PLPs for the year 2006-07 have now revised after having detailed
discussions with bankers, various Line Departments of Government , NGOs, developmental
agencies, taking into account infrastructural developments and support services, key areas and
changes in policy initiatives of GOI, State Government, RBI and NABARD.
1.4 As per revised guidelines issued by RBI, the Annual Credit Plan exercise for 2006-07 will
be based on the PLPs prepared by NABARD. Accordingly Pre- PLP meets were convened by
LDMs which had been attended by Banks, Line Departments of Government, NGOs and other
developmental agencies, to reflect their views and concerns regarding credit potential and
deliberate on major financial and socio-economic developments in the District in the last one year
and priorities to be set out for inclusion in the PLP. In the meetings, the DDMs/DDOs of
NABARD had outlined the requirements of information for preparing the PLP, and had also
sensitised the Bankers and Line Departments besides obtaining valuable feedback from all the
stakeholders. The PLPs prepared by NABARD, containing block-wise/activity-wise potential
will be placed before a Special DCC attended by all members of the DCC/DLRC. The potentials
indicated in the PLP will be presented by DDM/DDO which will be thoroughly reviewed prior
to finalisation of an implementable District Credit Plan.. Thus, the PLP is now the basis for
preparation of the DCPs and it has been an interactive process between all the players
concerned.
The Regional Office has also prepared State Focus Paper detailing developments in the rural
credit scenario and major issues of development through credit. The state level credit seminar is
intended to discuss these bankable potentials with the participating banks, heads of departments
of Government and concerned developmental agencies, deliberate on constraints / sectoral issues

2. and arrive at action plans for infrastructure / policy support so that a well thought out strategy is
orchestrated for successful implementation of the credit plan.
1.2. State profile and economy
The State of Orissa occupies 4.74% of India’s landmass and accounts for 3.74% of the country’s
population. It comprises of 3 revenue divisions, 30 districts, 58 sub-divisions, 314 blocks and
51057 villages. As per 2001 census, the total population of the State is 367.07 lakh. The percentage
of SC and ST population to the State’s total population is 16.2 and 22.21% respectively. The
literacy rate is 63.08% against the all India average of 64.8%. The male literacy rate is 75.95%
whereas the female literacy rate is 50.51%. The State is a predominantly agrarian economy and
has been divided into 10 agro-climatic zones based on land form, topography, climate, soil and
crop adaptability. As per the land use classification, the net sown area stands at 60.75 lakh ha.
and gross cropped area stands at 86.45 lakh ha. The cropping intensity for the State on an average
is 135%. The State situated in a subtropical zone, exhibits a temperate climate with normal
average annual rainfall of 1502 mm. It has an immense potential of ground water, mineral
wealth, fertile soil and diverse flora and fauna. It has vast untapped potential in the non farm
sector as it is famous for its traditional arts and crafts like pattachitra, applique.
Despite the rich endowment of the state, the state is still in the transitional stage of development
and is classified as backward in terms of development status. This phenomenon can be, among
other things, attributed to the following
Traditional farming practices with negligible commercial crops ( less than 2%)
Highest incidence of poverty at 47%
Frequent occurrence of natural calamities - floods, cyclones and droughts
Infrastructurally underdeveloped and tribal dominated, backward KBK region
Subsistence level of activity in handlooms, crafts
Keeping in view of the above it is evident that any strategy for development of the state involves
(i) building up globally competitive agriculture (ii) exploitation of potentials in sectors like
horticulture, pisciculture (iii) financing for handlooms, handicrafts in rural non farm sector (iv)
reaching the poor through micro finance (v) convergence of development interventions in KBK
egion (vi) strategic use of RIDF funds for rural infrastructure building and disaster proofing.r
1.3. Banking profile
The state has a good network of banks with 1427 branches of commercial banks, 834 branches of 9
RRBs, 316 branches of 17 DCCBs, 53 PCARDBs and 2579 PACs / LAMPS / FSS. The banking
system had Rs. 29226.13 crores of deposits and Rs. 20438.74 crores of advances with a CD ratio of
69.93% as on 31 March 2005. While 6 RRBs are in current profit and two RRBs are having
accumulated profit achieving sustainable viability, 3 DCCBs were not complying with Sec 11(1)
of BR Act, 1949 (AACS) as on 31 March 2005. OSCARD Bank has been under rehabilitation due to
its deteriorating financial health. Low recovery level has been a major constraint in accelerating
rural credit in the State. The overall recovery level for the State as on 31 March 2005 stood at
60.38%. Public Sector Commercial Banks had a recovery position of 46.13%, RRBs at 72.85% and
ooperative Banks at 64.35%.C
d Level Credit Flow1.4. Trends in Groun
A review of trends in ground level credit flow under Annual Credit Plans in Orissa reveals that
there is a small increase in annual credit plan disbursements during 2004-05.
(Rs crore)

3. Year Total ground level credit Growth rate %
2002-2003 2,433.43 (-)2.0
2003-2004 4,550.58 87.0
2004-2005 4,839.13 6.3
An analysis of flow of ground level credit for production and investments under agriculture /
allied activities and non farm sector reveals an increasing trend which is poised to take greater
increase in the ensuing year in view of GoI’s recent policy initiative to double the farm credit in
next three years. The details are as follows:
(Rs.crore)
Purpose 2002-03 Share GR
%
2003-04 Share GR% 2004-05 Share GR%
Crop loan 869.51 35.73 15.0 1107.20 24.33 27.0 1480.82 30.60 33.7
Term Loan
Agri &
Allied
177.37 7.28 1.0 219.68 4.83 24.0 423.21 8.75 92.7
Total Agri
loans
1046.88 43.01 13.0 1326.88 29.16 27.0 1904.03 39.35 43.5
NFS 145.62 6.00 -43.0 271.84 5.97 87.0 252.06 5.21 -7.3
OPS 1240.93 50.99 -6.0 2951.85 64.87 138.0 2683.04 55.44 -9.1
Total 2433.43 100.00 -2.0 4550.57 100.00 87.0 4839.13 100.00 6.3
It is a matter of concern that whereas the share of other priority sector (OPS) is high in the ACP
disbursements, the growth in agricultural term loans which is essential for capital formation in
farm sector in near stagnant. This is basically due to the fact that banks are advancing more for
personal and consumer loans.
An analysis of agency wise credit flow shows that commercial banks are the largest purveyors of
credit ( 63.45%) followed by Cooperative Banks (21.63%) and RRBs ( 13.63%).
(Rs. crore)
Agency 2002-
03
Share GR
%
2003-
04
Share GR
%
2004-
05
Share GR
%
CBs 1296.62 53.28 4.4 3118.40 68.53 141.0 3070.52 63.45
SCB/DCCBs 664.58 27.31 13.8 804.57 17.68 21.0 1046.76 21.63
ARDBs 9.34 0.38 100.0 10.45 0.23 11.0 16.28 0.34
RRBs 408.96 16.81 22.6 544.93 11.97 33.0 659.71 13.63
Others 53.93 2.22 -67.0 72.22 1.59 34.0 45.86 0.95 -
Total 2433.43 100.00 -2.5 4550.57 100.00 87.0 4839.13 100.00
The flow of credit for priority sector as a whole has increased during 2004-05 indicating a growth
rate of 6.34%. Further with the boost given by the GoI’s recent policy initiative to double the farm
credit in next three years, the ground level credit in the ensuing year is expected to show an
increasing trend especially for agricultural lending thus helping in capital formation and asset
creation in farm sector.
1.5 Spatial Flow of Ground Level Credit

4. The PLP projections/SAP Targets /GLC(SAP) Achievements for the last three years in KBK and
non-KBK districts is indicated in the table given below:
(Rs.crore)
2002-2003 2003-2004 2004-2005Sr.
No PLP
Projecti
ons
(financi
al)
SAP
Target
SAP
Achiev
e-
ment
PLP
Projectio
ns
(financia
l)
SAP
Target
SAP
Achieve
-
ment
PLP
Projectio
ns
(financia
l)
SAP
Target
SAP
Achievement
KBK Districts
1 404.17 309.82 288.62 486.9 343.86 462.82 555.15 447.31 544.21
Non KBK Districts
2 2332.24 2179.11 2144.81 2999.99 2381.69 4087.75 3334.2 3062.51 4294.92
Tota
l
2736.41 2488.93 2433.43 3486.89 2725.55 4550.57 3889.35 3509.82 4839.13
The Ground Level Credit flow for Priority Sector from financial institutions for KBK region has
been on increase and registered registered a growth rate of 6.3% in 2004-05 over 2003-04.
1.6 Development Financial Assistance Support from NABARD
NABARD over the years, has become major development partner in the state. The performance
of the Orissa Regional Office during 2004-05 has been quite gratifying in both business and
development parameters with the development financial assistance in the State recording Rs.
992.31 crores.
(Rs. crore)
Short term Loan 2002-03 2003-04 2004-05
SCB/ CCBs 405.79 476.90 460.79
RRBs 54.32 43.31 54.28
Sub- total 460.11 520.21 515.07
Agriculture Term Loan
CBs 17.51 5.13 16.05
SCB/ CCBs 19.27 23.10 11.20
SCARDB 11.00 9.62 7.14
RRBs 57.30 66.00 75.80
Sub-total 105.08 103.85 110.19
NFS
CBs 29.01 16.56 15.02
SCB/ CCBs 29.27 27.58 24.55
SCARDB 0.00 0.00 0.02
RRBs 106.38 160.50 172.86
Sub-total 164.66 204.64 212.45
Total Sche. Refinance 269.74 308.49 322.64
CBs 46.52 21.69 31.07
SCB/ CCBs 454.33 527.58 496.54
SCARDB 11.00 9.62 7.16

5. Short term Loan 2002-03 2003-04 2004-05
RRBs 218.00 269.71 302.94
Total Refinance 729.85 828.60 837.71
RIDF Disbursements/
sanctions
182.41 185.10 154.60
Total Dev. Assistance 912.26 1013.70 992.31
1.7. Other developmental interventions by NABARD in the state
Several initiatives have been taken by NABARD in the state of Orissa to bring about sustainable
and equitable agriculture and rural development such as micro finance, RIDF assistance,
promotional programmes under Rural Non Farm Sector, institutional development interventions
in the form of DAP/MoU and ODI etc.
NABARD has been sanctioning projects for the infrastructure development of Orissa ever since
the advent of RIDF in 1994-95. So far, 54965 projects have been sanctioned to the State of Orissa
involving RIDF loan of Rs. 2154 crores and sector-wise details of the same are as under:
(Rs in crores)
SECTOR No. Of Projects sanctioned RIDF
Loan
sanct
ione
d
Irrigation 54,336 1021.
00
Roads 227 472.0
0
Bridges 361 659.0
0
Others 41 2.00
Total 54,965 2154.
00
In the policy for RIDF XI under implementation during 2005-06, NABARD has expanded the list
of eligible purposes. Three new purposes viz., Village Knowledge centres, Desalination plants in
coastal areas & Infrastructure for information technology in rural areas have been added to a
wide canvas of sectors. Apart from Rural Connectivity, & medium/Minor Irrigation, thrust is
being for micro-irrigation, flood control, drainage, rural marketing, rural health, primary
education etc. Rural Sanitation is being given a major emphasis, particularly for construction of
Pay & use toilets in rural areas, construction of toilet blocks in existing schools, specially for girl
students.
Accordingly, the State Government has been asked to prioritise the projects to be posed to
NABARD by giving more thrust on all these sectors in their annual development plan. Apart
from traditional sectors such as irrigation and roads/ bridges state Government is in the process
of formulating projects under rural market yards, veterinary aid centres, drainage, ayurvedic
/homeopathic dispensaries, Village Knowledge Centres, etc. Another important feature of the
projects being proposed is that the State Government has posed projects under Biju Krushak

6. Vikas Yojana (BKVY) which involves lift irrigation/ tube wells / Minor Irrigation Schemes to be
implemented through Pani Panchayats (Water Users Association).
NABARD has been playing a leadership role in upscaling of SHG Bank linkage programme
qualitatively through capacity building partners, issuing operational guidance, documentation of
best practices leading to impressive progress under the SHG-Bank Linkage programme. As at the
end of 31 March 2005, 123256 groups have been provided credit support from banking sector
with a bank loan of Rs. 25179 lakhs. Banks availed refinance assistance to the tune of Rs. 8952
lakhs from NABARD in respect of 60545 groups as on 31 March 2005.
In order to bring about sustainable employment to rural artisans and entrepreneurs, NABARD
has taken several initiatives under Non-farm Sector. District Rural Industries Project (DRIP) is
being implemented in undivided Ganjam, Bargarh, Koraput, Sundergarh and Puri with no. Of
units created being 1310 as on 31.03.05. The state of Orissa is best recognised for its unique,
traditional, colourful and intricate arts and crafts. There are 51 recognised arts and crafts
providing second largest employment after agriculture in the state. In order to protect the
traditional crafts and infuse new lease of life into them NABARD Orissa Regional Office has
identified 7 traditional crafts across the state which are being developed under NPRI Cluster
Development Programme. During the year 2004-05, total 54 Rural Entrepreneurship
Development Programmes have been sanctioned with a grant assistance of Rs. 25.83 lakh for 1269
beneficiaries. Capacity Building of bankers and NGOs in appraisal of RNFS projects and Women
Empowerment is also taken up. Further, to ensure timely and hassle free credit to rural artisans
and entrepreneurs Swarojgar Credit Card is under implementation since 2003.
1.8 Credit Projections for 2006-07
The State Credit Plan for 2006-07 has been prepared on the basis of the potentials estimated for
various activities in PLPs prepared for all the districts in the State of Orissa. It envisages credit
requirement of Rs.6164.26 crores in respect of exploitable potential for different activities under
farm, non farm and other priority sectors in the State during 2006-07. The detailed sector wise
and district wise projections are given in Annexure AI. The projections indicate 4.3 % increase in
agricultural term loan investments and 21.6 % increase for total agricultural loans in total
projections over the PLP 2005-06 and 16.46% increase for total Priority sector loans over annual
credit plan 2005-06.
1.9 Looking ahead
Orissa is endowed well in terms of natural resources and modernisation of agriculture, market
orientation of rural non farm sector and quality upscaling of microfinance programmes are the
needs of the hour to ensure rural prosperity in the State. While banks in the State need to play a
proactive role in extending financial services to commercialisation of agriculture and allied
activities (with particular emphasis on agricultural term lending), emergent market oriented non
farm sector and in reaching the unreached poor through microfinance, Government of Orissa and
other developmental agencies need to extend effective agricultural extension services, fill in
infrastructural gaps identified in the State Focus Paper and support a conducive climate for
recovery of loans in order to facilitate our joint mission of ushering in prosperity in rural Orissa.

7. PART B : Issues for discussions in the State Credit Seminar
GENERAL ISSUES :
There is a need for focus on disbursement of agricultural term loans in view of the recent
policy initiative on doubling the farm credit in three years.Further the projections have
been made accordingly and stagnant trends have to be corrected.
Banks need to train Branch Managers for credit marketing and relationship banking.
Controlling offices need to take charge of timely submission and quality of reporting of
Lead Bank Returns (LBR)
Innovative products suiting to different segments of the rural society such as small
farmers, agricultural labourers etc. ( such as joint liability group lending, contract
farming ) need to be developed.
SECTORAL ISSUES
1) MINOR IRRIGATION
The potential under MI for the State for the year 2006-07 is estimated at Rs.101.59 crores.
Issues :
Issues related to MI development in KBK region:
i) The dugwell / borewell and Low lift points are the most feasible Minor Irrigation structures.
The feasibility of STW is very limited.
Ii) Awareness among the tribals / farmers in respect of farmstead / homestead activities related
to their day to day needs is very necessary.
iii) More emphasis is necessary for installations of river lift points by the NGO’s / govt. agencies
on the behalf of tribals and the dissemination of knowledge of their systematic operation and
maintenance.
17. MAJOR CONSTRAINTS & SUGGESTIONS FOR MI DEVELOPMENT
CONSTRAINTS
(i) One of the major constraints in the development of this sector is the inclination of farmers for
subsidy oriented programmes / schemes.
ii) Delay in energisation, high cost of energisation, and arbitrary costing causes
demotivation to go for energisation of irrigation structures. The energy department in
consultation with GRIDCO should provide concessional facility for agricultural connections.
iii) Though attractive subsidy has been announced by Govt. of India and state Govt. for various
irrigation schemes, lack of mass awareness about the benefits is the main cause of slow progress.
Credit linkage for such programme is also very poor despite provision in SAP & PLCPs.
SUGGESTIONS
i) Selection of proper site, construction of irrigation structures as per proper design and
energisation are three important aspects of economic exploitation of groundwater. The state govt.

8. may frame a clear policy for energisation in irrigation sector in view of the power sector reforms
in the state.
ii) Benefit of irrigation can be reaped only when suitable crop rotation with recommended
package of practices are observed. Demonstration plot in each panchayat should be arranged by
Govt. with innovative irrigation techniques and scientific agricultural practices which will have a
direct impact on the farmers. Krishi Sahayak Kendras and Krishi Vigyan Kendras, field
functionaries of agriculture and horticulture department should launch vigorous mass awareness
programme on efficient irrigation techniques like sprinkler and drip systems. NGOs, VVVs,
Farmers' Clubs and bankers should be closely associated in such programmes.
iii) Formation of Water Users' Association in command area of all irrigation projects should be
made compulsory. WUAs will take over the operation, maintenance and management of projects
under supervision and guidance of the concerned department. The state govt. may enact a
legislation to this effect and issue the policy guidelines.
iv) Participation of private parties having expertise, competence and reputation should be
allowed in all Govt. sponsored programmes especially for marketing of pump sets & construction
of borewells / tubewells. If need arises, such parties be registered and a list should be made
available to concerned departments both at District and Block Level.
2. LAND DEVELOPMENT
The Potential for the State under the sector is estimated at 46.30 crores
Issues:
Inadequate use of inputs and under utilisation of potential
Need for integrated farming system on watershed basis.
Lack of awareness of modern concepts of package and practices.
Need of a long term strategic plan to combat drought and flood and completion of soil
conservation and watershed projects particularly in the KBK zone.
Need for diversifying the cropping pattern to include cash crops, oilseeds etc.
In hilly areas dominated by tribals, to avoid shifting cultivation, land may be leased to them
giving them usufructuary rights.
3. FARM MECHANISATION
The potential for the State under the sector is estimated at Rs. 210.14 crores.
Issues:
i The quantum and rate of subsidy for power tillers should be increased which is likely to
nefitbe small/marginal farmers.
ii Subsidy shall also be made applicable for second hand tractors.
iii State Government should promote Paddy threshers initially on a pilot basis and
subsequently an Area Development Banking plan in all paddy cultivated districts needs to be
repared and implemented. If required, the services of NABCONS may be availed for the same.p
4. STORAGE GODOWN & MARKET YARD
The potential under this sector for the State is Rs.71.17 crores.

9. Godowns
omotional initiatives by GOO may provide the desired enthusiasm for the
rmers/individuals.
State sponsored
elf employment programmes, so as to encourage educated unemployed youth.
ural godowns through
HGs by grant of subsidy in addition to the subsidy available under CISS.
ges to OSWC or any other concerned institution so as to make the receipts valid for
ledge loan.
shall also extent financial assistance under softer terms to SHGs taking up godowns
chemes.
i)
ii)
i) esponsibility for right choice of
promoters and establishment of units in potential pockets.
ntial under this sector for the State is estimated at Rs.114.32 crores.
Issues
1. The capacity available or created so far are mainly of intermediate or bulk storage category
owned by OSWC, which are generally not accessible by the farmers in the remote villages. The
storage capacity for primary storage at village level is negligible at present, which is the main
reason for distress sale. Therefore, the GoO may allocate a considerable share for primary
storage and motivate individual or group of farmers to take up godown in villages. Awareness
compaign and other pr
fa
2. GOO may also make the godown as an eligible activity under various Central/
s
3. As SHGs are becoming strong in rural areas, godowns can also be promoted through them, so
that the farmers has an easy access to storage facility. GoO may promote r
S
4. GoO may also formulate appropriate accreditation scheme for affiliating private godowns
located at villa
p
5. The ongoing centrally sponsored scheme viz., Capital Investment Subsidy Scheme for Rural
Godowns involving capital subsidy to the extent of 25%, may also be popularised by the DMI.
6. Banks
s
Cold Storages
Suggestions:
As the production of potato in the State is just 25 to 30% of its demand, the Department of
Agriculture needs to plan for increased area under potato every year. Local production will
not only increase the scope for cold storage potential, but also reduces the cost to a
considerable extent.
The details of Capital Investment Subsidy Scheme are to be disseminated at deeper levels by
GoI and related departments. As the scheme is now extended for entire X Five Year Plan
period, the scheme details should reach the prospective entrepreneurs. GoI should make use
of all modes of communication to spread the information.
Agencies like DIC and APICOL, can also take added rii
5. PLANTATION AND HORTICULTURE
The pote
Issues:

10. Problems and constraints
The major problems faced by the Horticulture sector in the state are
i. Small land holding size of less than 1.0 ha inhibits rapid growth in the sector.
ii. Low productivity due to adoption of traditional methods of cultivation results in lower
economic returns.
iii. Highly fluctuating prices of horticultural produce and inade
a
quate marketing
str
scourages liberal credit
ki rearing center, cocoon drying and marketing facilities for
elopment.
e
ntity
ava and
aya
tivity - Coffee Board,
t.
1. High density planting in mango and guava may be encouraged - Hort. Dept.
ntial under this sector for the State is estimated at Rs.29.57 crores.
v
in potential areas in
addition to development and proper maintenance of permanent nurseries.
infr ucture.
iv. Non availability of adequate quality planting material/ seed material.
v. Inadequate post harvest facilities like cold storage and pre-cooling units, cool chain.
vi. Inadequate extension services provided by the line department and budgetary
constraints faced by these Departments.
vii. Lack of awareness at bankers and farmers level in respect of various schemes which can
be availed for horticultural activities in the state.
viii. The problems of long over dues/ willful default of bank loans di
support.
long gestation horticultural crops.ix. Bankers some time discourage
x. Lack of coordination amongst developmental agencies and financing institutions.
xi. In adequate supply of spawn
ii. Inadequate chawx
Sericulture dev
Action points
1. Non availability of quality planting material of superior variety, timely and in adequat
qua - Dept. of Hort. and banks
2. Lack of linkage of Horticulture development with the processing Industry - State Govt.
3. Inadequate supply of tissue culture banana plant inspite of demand - State Govt.
4. Inadequate focus on commercial cultivation of fruit crops like Sapota, Gu
Pap - State Govt.
5. SHGs linked vegetable production for nutritional and economic security - Banks
6. Development of floriculture should be given priority - State Govt.
7. Slow progress in private coffee plantation, inspite of high produc
State Govt.
8. Development of horticulture through contract system - State Govt.
9. Defunct state nurseries may be given on lease to private nurseries - State Gov
0. Dry land horticulture may be given importance in the state - Hort. Dept.1
1
6. FORESTRY & WASTELAND DEVELOPMENT
The pote
Issues:
Action Points:
Go ernment:
In order to ensure availability of quality seedlings and timely supply of planting materials of
desired species, a good no of temporary nurseries should be developed

11. Government may consider evolving a suitable policy for development bamboo sector , which
has the potential to contribute significantly towards poverty alleviation, employment generation
and rehabilitation of degraded/waste land.
With a view to promote cultivation of Tree Borne Oilseeds like Jatropha, Karanja etc in the
degraded/wasteland, Government may consider development of suitable infrastructure for
cultivation, processing and marketing of such crops.
Government may consider leasing out non-forest wasteland to entrepreneurs/corporates for
raising farm forestry/ agro forestry.
Necessary infrastructure facilities for processing of NTFPs should be developed and
marketing facilities to be developed for the processed products.
A survey of wastelands may be undertaken to assess the ownership wise distribution( i.e
forest/ revenue/ private) as well as the status of degradation, for facilitating preparation of need
ba es d developmental plan.
The Forest Department should organise awareness camps to educate the people and help
them in realising the importance of forestry. NGOs with good tack record may be involved for
romotion of the sector.p
such activities by way of
e banks should increase their credit outflow due to their wide reach and rural
appraisal of forestry projects and develop expertise for
steps for
reasi this sector, by availing refinance at a reduced rate.
. ANIMAL HUSBANDRY
airy
he potential for the State under the sector is 86.31 crores.
sues:
ies may also be advised to follow feeding practices
nufacture of indigenous
milk products such as panneer, khoa and ghee are to be encouraged.
Banks:
Forestry projects being long gestation in nature, banks generally do not show much interest
in financing such projects in fear of non- repayment of loan by the borrowers. For this reason, the
ground level credit for the sector is significantly less as compared to other sectors, despite having
potential for development. Banks should adopt a proactive role in popularising the contract
farming by extending necessary credit support for implementing the industry sponsored farm
forestry projects.
Banks should consider allowing incentives to farmers taking up
charging concessional rate of interest on liberal terms and conditions.
In view of the importance of the sector, the financing banks particularly RRBs and
cooperativ
presence.
Banks should train their own staff in
speedy disposal of pending proposals.
Since 100% refinance is available from NABARD, banks may take necessary
inc ng the flow of credit under
7
D
T
Is
Banks
SGSY beneficiaries complain against drastic drop in milk yields (to the extent of 50% over the
milk yield at the time of purchase) in case of C.B. Cows purchased from A.P. Payment of 50%
money at the time of purchase and remaining 50% based on the average one week’s milk
yield may be followed. Further, beneficiar
of the seller to maintain milk production.
Calf rearing, heifer rearing and commercial dairy proposals are to be encouraged
Milk Processing schemes both in large scale and in small scale for ma

12. SHGs may be grouped as fodder groups, dairy farming groups, processing groups - Khoa,
ghee and panneer and linkages among them are to be established and financed for the
respective activities.
Chaff cutter may also be included in the outlay of dairy units.
Area/cluster approach may be followed in dairy financing to ensure organised milk
collection by OMFED and private dairies. Availability of milk at 4.5 litre per km. has to be
ensured for extension or introduction of milk route by OMFED.
Gomitras may be financed for setting up mini dairy units under venture Capital scheme in
other than operation flood districts and under schematic lending in operation flood districts.
Finance for setting up of private veterinary clinics may be taken up in developed districts
such as Cuttack, Puri, Dhenkanal, Balasore and Ganjam.
Quality financing under the Venture Capital Scheme of GoI.
S.T. Loan for fodder cultivation may also be extended for dairy units
Bank loans may be extended for Gauchar Land development for fodder cultivation
Inclusion of fodder cultivation in scales of finance.
tation for the production of exotic semen may be established at
istricts with high
asture lands may be leased to dairy societies on long term basis
popularised and the farmers are trained
eason wise and district wise.
isation of Venture Capital Scheme of GoI.
lk collection units may be
procurement
DoAH
AI operations may be strengthened
Financial and functional autonomy may be given to OLRDS
Another frozen semen breeding s
Chipilima, Sambalpur district
In Bhadrak, Jajpur, Balasore, Koraput, Malakangir, Kendrapada, Angul, Nawrangpur,
Phulbani, Boudh, Rayagada, Naupada, Bolangir, Dhenkanal and Ganjam districts, more AI
centres need to be opened. Even the services of good NGOs may be availed to increase AI
coverage in these districts. Performance of AI centres also needs to be improved.
Castration of local bulls, calf protection and fodder cultivation should also be encouraged to make
cross breeding programme successful.
AI charges need to be increased from the present Rs.5-7 to Rs.20 per AI to make OLRDS self
sustainable
SGSY beneficiaries complain against drastic drop in milk yields (to the extent of 50% over the
milk yield at the time of purchase) in case of C.B. Cows purchased from A.P. Beneficiaries
may be advised proper feeding practices to maintain milk production. Further, methodology
followed at the
More number of veterinary dispensaries may be opened especially in the d
potential for AH activities.
Refrigerators may be provided in veterinary dispensaries to stock vaccines
Vacancies in the veterinary hospitals may be filled up
Govt./Common p
Techniques such as urea treatment of straws may be
in the technique
Fodder demonstration plots are to be developed
Fodder availability and demand is to be assessed s
Popular
Well organised Livestock markets may be set up.
OMFED
More milk routes may be provided in Angul district.
d automatic miMilk houses, milko testers, bulk milk coolers an
established by OMFED to ensure proper milk collection and

13. OMFED and milk unions may reduce cost of concentrate feed.
Fodder demonstration plots are to be developed.
istricts
rapada
Higher milk price for clean milk production under Venture Capital Scheme of GoI.
rtite agreement may be entered into with banks and beneficiaries to credit milk
proceeds to the dairy loan accounts
ential under this sector is 40.30 crores
roiler hatcheries, Contract
g farms for low input technology birds under
ng contract farming in maize especillay in Ganjam, Gajapati, Nawrangpur, Bolangir,
ms in western
r poultry under Agri Clinic scheme
a districts.
nding S.T. Loan for maize cultivation and inclusion of maize cultivation in scales of
g maize
oAH
LFED
ularising Venture Capital Scheme of GoI.
Khaki campbell ducks may be supplied for duckery units
Is u
Techniques such as urea treatment of straws may be popularised and the farmers are trained
in the technique.
evive defunct dairy societies in Deogarh,Steps are to be initiated to r Gajapati, Kandhamal
Kendrapada, Malkangiri, Mayurbhanj, Nawrangpur, Rayagada and Kalahandi districts.
Streamlining of milk procurement in Ganjam and Gajapati d
Extension of milk routes in Kalahandi, Nayagarh, Rayagada, Sambalpur and Kend
districts
Strenthening of Women Dairy Project in Sambalpur district.
Tripa
Poultry
The pot
Issues:
Banks
Financing for commercial layer and Broiler units, Com. Layer & B
broiler farming.
Financing central grower units and Breedin
Venture Capital fund of GoI. Also financing satellite layer units.
Promoti
Khurda, Keonjhar and Mayurbhanj districts.
Financing for Environmental Controlled broiler units and broiler breeding far
Orissa.
Encouraging broiler meat processing schemes, retail poultry dressing units, and egg
cart/broiler cart schemes under the Venture Capital Scheme of GoI.
rajaFinancing SHGs for setting up backyard poultry units with Vanaraja, Giri
Financing for setting up feed mixing plants, feed analytical labs under Venture Capital
Scheme of GoI.
Financing Disease diagnostic laboratories, feed supply fo
Financing for egg cold storage in Bolangir, Ganjam and Khurd
Exte
finance.
Financing for setting up of godowns for stockin
D
Strengthening OPO
Pop
Sheep/Goat /Piggery
es:s
Banks

14. Financing for Goat rearing, Goat rearing with Boer bucks, Boer breeding farms and sheep
rearing with Nellore rams
A
to sheep and goatery units and AI
aged.
Setting up of modern abattoir
Pursuing with the municipalities for setting up of scientific slaughter houses for hygienic
meat production
Stringent quality control checks in meat processing
Availability of PPR vaccine may be improved
Promoting leather processing units in cluster approach
Financing SHGs for ram lamb/kid rearing units
Financing working capital to butchers, sheep/goat rearing units to farmers in
cluster/integrated approach.
Financing silvipasture schemes
Financing meat processing units
Do H
eding bucksSupply of Nellore breeding rams and Boer bre
with Boer semen may be taken up.
Sale of sheep/goat for meat by weight basis may be encour
8. FISHERIES
The potential under this sector is estimated at Rs. 82.03 crores.
Issues:
Freshwater Fisheries:
a. tilisation of existing tanks/ponds:U
To enhance production in a cost effective manner, development of the existing tanks/ponds
rath new tanks/ponds may be taken up on a priority basis. Effort of the Stateer than creation of
Govt. to lease out selected water bodies on a long-term basis (5-7 years) is a welcome step. As on
date SHGs. In order to7338 tanks with 9079.68 ha. area have already been leased out to 5164
ensure effective implementation of the said policy, following are suggested.
i. , these derelict water bodies may be developed/renovated under variousBefore leasing out
Govt. sponsored schemes like SGSY, NFFWP/RSVY etc.
ii. Better coordination among all the stakeholders have to be ensured to ensure effective
implementation.
iii. In case of SHGs taking up pisciculture activity in lease out tanks, line department have to
ensure timely guidance and on-hand training to the members.
iv. In case of preferential allotment of GP tanks to SHGs, steps may be taken to avoid unrealistic
hike in lease rent.
b. Implementation of reservoir policy:

15. Production of 0.10lakh MT form 1.97lakh ha (138 nos) of reservoir is one of the lowest in the
country. With an aim to change the earlier concept of capture fishery to culture based capture
fishery, “State Reservoir Fisheries Policy” was promulgated for large water bodies (>40ha WSA).
Under the policy, department stocked 138.56 lakh seeds in the 100 leased out small reservoirs.
Effort also been initiated for preparation of macro and micro plan for development of reservoirs
and training of personnel on management of reservoirs through a consultant. In effective
utilization of these water bodies following points should be looked into.
i) Infrastructure like approach road, captive nurseries, landing centers should be developed on a
priority basis.
ii) Fishermen cooperatives in the periphery of these large water bodies should be strengthened.
iii) Involvement of local fishermen in fishing operation should be ensured.
iverine Fisheries:R
(i) Strict implementation of pollution control measures by industries to ensure optimal standards
for pisciculture.
(ii) Strict conservation regulations
(iii) Maintenance of minimum water flow in rivers.
Brackish Water Fisheries:
a.Re-survey of suitable area:
The information on suitable area for brackish water farming in the State is related to a survey,
which was carried out well before the restriction imposed on taking up in specified area on the
coast. On the line of the Coastal Aquaculture Act, 2005, there is a need to re-survey the area
suitable for brackish water culture.
b.Streamlining leasing policy:
In the state, major part of the suitable land is coming under the purview of Government. Revenue
Department needs to simplify land-leasing policy for coastal land suitable for brackish water
farming. The activity may be declared as an allied activity so that land conversion and water tax
can be dispensed with.
c. Provision for basic infrastructure:
The S t of common facilities/infrastructures like road, powertate Govt. may promote the concep
supply, disease diagnostic center etc on a cluster basis. In this regard the possibility of utilising
financial assistance under RIDF or participation of corporate bodies may also be explored
d. Development of model farm:
To ensure sustainable growth of the sector, there is a need to impart on-hand training to fish
farmers in general and small farmers in particulars on scientific culture practices. In this regard
establishment of model farm, may be in Public Private Participation (PPP), would be a wise
proposition.
e. Maintenance of sustainable natural production:

16. In order to enhance the production from the sector and to provide livelihood to lakhs of
traditional fishermen, sustainable production from the natural sources needs to be ensured. It
also carries significance in providing quality brooders. In this regard, Govt. has to ensure strict
enforcement of the act in controlling natural seed collection, capture of broods etc.
f. Diversification of culture:
Present brackish water culture is mostly confined to the culture of shrimp. In order to diversify
the risk and to meet the demand, it is suggested to take up activities like crab fattening, sea bass
culture , oyster culture etc. on a selective way.
g. Streamlining policy of Registration:
Permission from Aquaculture Authority of India (AAI) is mandatory for taking up brackish
water farming. Even after 8 years of the promulgation of the act in this regard, less than 15% of
the farms in the state have got the required permission. So there is a need for strict enforcement
of the said act in the state. In order to ensure clearance of proposal on a time bound manner,
there is a need for streamlining the process of sanction. Possibility of empowering State Level
Committee for clearance of smaller units may also be explored.
h. Provision for institutional credit:
The bitter experience of the past has made bankers skeptical in sanctioning new cases.
Considering various developments in the sector, bankers may come forward in financing units
with clearance of AAI and adopting sustainable production technology. Ground level
machinery of the line departments may also associate with bankers in recovery of due.
Marine Fisheries:
a.Infrastructure at landing centers:
As cing value added products, infrastructure likethe quality of the raw material counts a lot in produ
approach road, water and power supply, cold storage, auction hall etc. in fishing harbors/
landing centers and Jetties needs to be developed on a priority basis. In this regard, the State
Govt. may explore the possibility of utilising facilities extended by GoI, NABARD etc. Private
participation in construction, operation and maintenance of the fishery harbours and fish landing
centers on BOOT concept may also be encouraged.
b.Utilisation of data:
On account of non availability of navigational aids on the crafts and limited reach, Potential
Fishing Zone (PFZ) advisories provided by National Remote Sensing agency is not fully utilised
for the benefit of coastal fishing communities. In this regard, line department in association with
Indian National Centre for Ocean Information Services (INCOIS), ORSAC may initiate steps not
only in establishing more and more Information Kiosks, Electronic Display Boards etc but also for
effective utilization of information by traditional fishermen.
c.Restriction on introduction of new vessels:
In the State, as reported by the national review committee, fishing fleet in the size range of 8 to
15 meters OAL has attended the optimum strength. In this regard there should be a strict
prohibition in introduction of new vessels of the said size. Specific vessels beyond 15 meter OAL
may be added to the fleet to tap resources beyond 50-meter depth. In addition, emphasis may be
accorded for motorisation of the existing boats
d.Spread of micro credit concept:

17. Even though the concept of empowering women through the concept of SHG has seen a
movement in the entire state, the same is very limited in coastal districts. There is immediate
need on the part of line departments not only to spread the message but also to assist them in
taking up income generating activities. Nodal Departments like Mission Shakti may take
initiative in imparting training to the line department personnel in this regard.
e.Marketing of dry fish:
Under STEP 3000 members of 32 Primary Fisher Women Cooperative Societies (PFWCS) were
trained on production of value added products like dry fish and fish/prawn pickle. In the
absence of proper information on marketing, they are unable to realise better price. In this regard
line department may initiate steps for collection of information on various market players, scope
for expansion in North-Eastern states, interaction between producers and traders etc.
f. Effective implementation of Centrally Sponsored Schemes:
As the fishermen are prone to various natural calamities, fishermen welfare schemes like
Development of Model Fishermen Village, Group Accident Insurance for Active Fishermen,
Saving-cum-relief scheme are in operation in the state. Timely contribution of share, active
par ation of the line departmticip ent in timely utilization of the fund would be immense
beneficial. In order to make the Janashree Bima Yojana a viable proposition, there should be wide
coverage and increase in group size.
hanadi river system
ere affected by heavy rainfall during the post monsoon season.The state had received excess
n
the were opened due to which the crops in the down streams areas were washed
way. The state had declared that as many as 23 districts were effected by the floods.Further,the
e claim may be submitted expeditiously after completion of the formalities
for the same.
Banks/RRBs on the basis of their eligibility and on
9. PRODUCTION CREDIT
The potential under this sector for the State is estimated at Rs. 2520.67 crores.
Issues:
1. Tackling of the Flood situation in the state
The state has been affected by yet another natural calamity during Kharif 2004. Most of the
coastal districts and also districts on the situated in the river basin of the Ma
w
rai fall in some districts. Due to the rise in the water level in the Mahanadi reservoir the gates of
Hirakud dam
a
following measures may be taken by banks to tackle the flood like situation.
The crop insuranc
Banks are requested to cover all their crop loan borrowers under KCC Scheme so that the
problem of crop loans lime delay in credit, delay in inputs supply, etc., can be favorably
addressed.
Banks may grant MT(Conversion)/MT(Rephasements/Reschedulement) loans to borrowers
whose standing crops are damaged. NABARD would consider providing conversion of
ST(SAO) loans sanctioned to Cooperative
completion of all formalities.

18. elf Help Groups under SHG-Bank Linkage Scheme. NABARD
provides cent percent refinance to banks.
To enable the members of the SGSY SHGs to take up income generating activities and
increase their family income, the banks may consider sanctioning of Economic Assistance
RD provides 90 % of the loan amount disbursed to
R
oldings.With poor irrigation facilities in the
g basis and
are mostly dependent on the money lenders to meet their credit requirements for carrying
rmation of Tenant Farmers
The
out of 9 RRBs have reported to have formed TFGs .
3. N
make a concerted effort to increase the non credit input in agriculture for
because of the traditional agricultural practices of the cultivators and lack of
To enable the farmers to undertake farming activities, the banks may consider providing
credit assistance to sound S
Loans to eligible SGSY groups. NABA
SGSY groups as refinance.
2. efinance to SF/MF and SC/ST farmers.
It is observed that the size of the average holding is decreasing over the years which is an
area of major concern. Though there has been a growth in the release of crop loans to SF/MF
and SC/ST farmers, still there is ample scope for increasing the credit flow as a majority of
them still do not avail credit from institutional sources.
Further, since there was incomplete coverage of SF/MF and SC/ST by the banks in view of
the absence of ownership land holdings , the scheme of Tenant Farmers Groups/Oral Lessess
was introduced by NABARD and it has become mandatory for banks to finance 2% of their
total loans to these groups.The Orissa state is predominantly an agrarian economy with a
high proportion of small and marginal land h
state , even the big farmers lease out a portion of their holdings to small farmers or make
share cropping arrangement with them.However, nowadays it is observed that land less and
farm laborers cultivate some small land holding either on oral lease or on a sharin
out their cultivation. Therefore there is ample scope for the fo
Groups (TFGs) in the state as illustrated below:
CCBs and RRBs have made a beginning in the formation of Tenant Farmers Groups (TFGs)
and 7 out of 17 DCCBs and 2
eed for increasing the Production & productivity of farm land.
The productivity of various crops is very low when compared to the national average. The
govt. should
increasing the productivity.
Lack of adequate irrigation facilities and recurrence of natural calamities like flood, cyclone
and drought have a negative bearing on the agricultural development of the State. In the
absence of assured irrigation, cultivation in these vast stretches of farmland is dependent on
rain water.
The major portion of the cultivable land in the state is monocropped.
Though potential for irrigation has been created, the same is not optimally utilised mainly
entrepreneurship.

19. Mechanised farming is yet to gather the required momentum.
Water logging, salinity, soil erosion due to shifting cultivation, excess acidity etc. are some of
s/fungicides should be encouraged.
The production and distribution of chemical fertilizers need to streamlined by encouraging
4. M
eting of various crops is negligible. Major portion of the
ue to inadequate storage
facilities/financial constraints at the PACS level and the limited role played by various
storage, etc., are to be provided particularly to the SF/MF to ensure
remunerative prices for the produce during the entire season.
mpany viz, National
Collateral Management Services Ltd, a company floated by NCDEX to procure rice from 4
rough share capital contribution, institutional credit, etc.
icient and vibrant marketing system for which the
e DLTC meeting is attended by officials of Line departments such
s Deputy Director Agriculture,Plantation & Horticulture Deptt, LDM, DRCS, representative of
OSCB, some progressive farmers and the DDM/DDMs of the concerned districts.
the reasons for low productivity levels.
Further, adequate use of pesticides/herbicide
Use of organic manure / bio-fertilisers on a large scale is to be encouraged.
participation of private sector also.
arketing support for Agricultural Produce.
Unremunerative prices for the crops is a major concern of the farming community. There is
wide difference in the farm gate prices and market prices.
Institutional arrangement for mark
produce is marketed through the unorganised channels. Exploitation by middle men and
distress sale of produce are not uncommon.
These unorganised channels have developed mainly d
procurement agencies in the state.
Major thrust should be given for institutional arrangements for marketing to encourage an
efficient marketing system. Necessary infrastructure facilities viz., transportation, post
harvest technologies for
It has come to notice that the FCI has hired a private risk management co
districts in Orissa (Bolangir, Nuapada, Bhadrak and Balasore) at MSP and it is proposed to
extend the operation for Rabi season also. This scheme could be extended to other districts
also to help the SF/MF.
The financial position of nonviable societies is to be reviewed and their resources have to
augmented th
The govt. should endeavor to establish a eff
credit institutions can avail refinance facility through a separate line of credit opened by
NABARD for marketing of agricultural produce. Recently NABARD has increased the loans for
marketing of crops against pledge of agricultural produce to 75% of the value of the produce
pledged subject to a ceiling of Rs. 5.00 lakh per borrower. More banks may avail of this facility
uring the year.d
5. Need for moderation in scales of finance
In the state of Orissa there are 17 DCCBs who are conveners of DLTC for fixation of Scale of
finance in all the 30 districts.Th
a

20. As regards fixation of SOF as a range,in most of the districts there is separate scale of finance for
Traditional and HYV varieties of crops like Paddy, Maize, Sugarcane and vegetables.Further, in
some districts there is separate scale of finance for irrigated and non irrigated crops like pulses
viz arhar, biri mung and ragi.
s crops are to be fixed by the DLTCs well in advance before the
m TCs.
r
s
entation of the NAIS. should be popularized and the coverage be broadened in
terms of both crops and area.
For conducting the crop cutting experiments, Gram Panchayat may be taken as the defined
d by
everyone.
7. P s of the weavers sector
o
mproved tools/equipments etc., so as to enable the weavers to
rly
production a
8. the redit C
The KC e is bein ented ooperative B , RRBs an ial b
8-99 onwards. As at the end of September 2005, the number of cards
sued by the above banks are as under :
(Rs. lakh)
The Scales of finance for variou
co mencement of the cropping season. However, delay was observed in convening the DL
Fu ther, wide variations in the SoF fixed by DLTCs in the same agroclimatic zones have also been
ob erved. The SCB should convene the meeting of the SLTC and moderate the SoF fixed by the
DLTCs.
6. Stabilisation arrangements
As the state is effected by successive natural calamities, the ACSF should be augmented.
The implem
area.
It is observed that three different agencies assess the crop yield in the state. The state should
endeavor to ensure that only one set of data are compiled and the same are accepte
roblem
The primary societies are saddled with the problems of operating / accumulated losses, declining
duction / sales, acpr cumulated stock and non-viability. These factors are analysed below :
The societies are unable to get adequate marketing support from OSHWCS. In case of several
societies, the production and sales are declining year after year leading to reduction in credit
limit.
Non receipt of Rebate claims/ dues from MDA for years together resulting in increasing
interest burden.
The State Government / Apex Society have to increase their efforts on design development,
training, providing i
undertake market oriented production.
The State Level Societies may undertake research and market studies to assess the customer
preferences, provide designs/patterns to suit the customer taste and make the production
customer oriented.
Staff of the DCCBs are not prope trained for supervising the societies engaged in
ctivities.
Implementation of Kisan C ard.
C Schem g implem by the C anks d Commerc anks
in Orissa from Rabi 199
is
Cumulative cards issued Aggregate credit limit sanctioned
Comercial Banks DCCBs RRBs Comercial Banks DCCBs RRBs
259918* 2395746 297543 NA 457544.27 53402.11

21. * Position as on 31.03.05
Outreach:
S to
ring the above farmers under KCC fold. 09 out of 17 DCCBs and 02 out of 09 RRBs have formed
if and Rabi fixed by Cooperative Banks and RRBs and allowing opération on
e limit within the sub-limits during a particular season is restricting the flexibility of KCC.
hinery, dugwell, pump set & allied activities is
vailable from banks. But except Cuttack RRB, no other bank has reported to have advanced term
loans under KCC.
PAIS : f Orissa, RRBs hav plementing the PAIS in a m per the
details . However, DCCB t been showing keenness not-so-
rden.
The DCCBs/RRBs have made special drive to reach out to the farmers to cover them under CCC.
Although KCC is more or less stabilised but defaulters, share croppers, tenant farmers and oral
lessees are yet be fully covered under CCC. RRBs and coop. Banks have started forming TFG
b
756 TFGs as on November 2005.
Usage : With the introduction of KCC, farmers are satisfied of getting crop loan in time . But the
sub-limits for Khar
th
With the enlargement of scope of KCC to inc lude term loan, requirement of credit of farmers for
purchase of plough, bullocks, agricultural mac
a
In the State o
given under
e been im
s have no
odest scale as
due to their
strong financial position in sharing the bu
KCC issued as on 30.09.05 KCC - covered under PAIS
RRBs 297543 115895
Coop. Bank 2395746 Not covered
SUGGESTIONS FOR IMPROVEMENT
More publicity measures for educating the farmers would have to be taken up by the banks.
rvesting so that the farmers would get remunerative price for their
produce.
a unit for the coverage of crop insurance.
ost of cultivation and
umption purposes.
arm sector as it has tradition of handicrafts,
n
t
v
r maintenance of industrial estates, uninterrupted power supply to various SSI and
ollect, preserve and update various project profiles in respect of different RNFS
Currency of each drawal may be allowed to run for 12 months instead of raising demand
immediately after the ha
Gram Panchayat to be treated as
Agriculture Department should make arrangement /efforts to educate the farmers about the
latest agricultural practices through on location demonstration camps from time to time.
The credit limit should be fixed realistically so as to cover the entire c
cons
10. NON FARM SECTOR
Orissa has excellent potential for rural non f
ha dlooms. The potential under this sector is estimated at Rs.647.28 crores.
Issues:
Ac ion Points/ Points for discussion
Go ernment departments/ other agencies
Regula
other RNFS units
DIC may c
activities and make them available to the needy entrepreneurs.

22. The State Government may fill up vacant post of IPOs in various districts.
g marketing of RNFS produces in the
tating tourism development through appropriate infrastructure and service support,
Developing post-harvest infrastructures like grading, packing and branding of various RNFS
ted produces.
s
revived.
ster based lending.
s/
f artisans/other needy borrowers under Swarojgar Credit
Cards scheme/ Artisan Credit Card(ACC)/Laghu Udyog Cards(LUC).
o /SISI/NABARD may be made
available to the prospective entrepreneurs.
licity of various schemes- For creating awareness among rural masses various schemes
f leaflets/
Issues:
ORMAS may further intensify their efforts in promotin
State.
Imparting quality training on Entrepreneurship Development with the help of professional
institutes.
Setting up Common Facility Centres, Design Development centres for the traditional crafts.
Importance to Cluster approach for development of Handicrafts/Handloom products.
Encouraging private investment in RNFS by way of incentives.
Revival of Apex Handloom and Handicraft agencies.
Upgradation/capacity building of Handicrafts Training Centres.
Facili
promoting Orissa as a tourist destination.
Setting up of more agro based industries to absorb the unutilised manpower from
agriculture sector.
rela
Development of eco-tourism, eco-technology such as vermiculture, waste management
technology etc. by involving NGOs/ SHGs/ Local Bodies to create awareness may be taken
up.
Setting up of export oriented units for various handicrafts and handloom item
Due to lack of managerial ability and working capital, many powerlooms units in
cooperative sector have become sick and needs to be
Banks
Banks may consider extending finance to trainees supported by NABARD under its
promotional Programmes such as REDP, Skill Development Programme etc.
Banks with the help of NGO may form the SHGs of artisans of various crafts whereby
fulfilling their credit needs through bank linkage preferably in cluster basis.
Banks have to play a proactive role in graduating SHGs into SMEs by providing adequate,
timely and hassle free finance to the matured SHGs.
Working capital needs of RNFS units have to be fully met.
Banks may follow clu
Banks may identify committed partner NGOs/ volunteer agencies/ registered societie
clubs and utilise their services for RNFS development.
Banks may cover more number o
M del projects available with various agencies such as DIC
Pub
available with DIC/NABARD/SIDBI/Banks etc may be propagated in the form o
pamphlets/ media.
Low cost housing technology adopted by the borrowers may be encouraged by the banks
Banks have to come forward to conduct more number of EDPs in collaboration with
institutions like RUDSETI model.
11. RURAL INFRASTRUCTURE DEVELOPMENT FUND

23. Action points / Suggestions for smooth implementation of on-going RIDF projects
I. The State Government may periodically convene High Power Committee (HPC) meetings and
ensure quality and timeliness in completion
volving Fund exclusively for Survey & Investigation
hich helps in proper assessment of Project Estimates & preparation of Detailed Project Reports.
f preparation of projects, preparation of
imbursement claims.
take detailed review of the implementation of projects.
ii. The State Government may provide specialised training to all its officials associated with RIDF
regarding project preparation, project appraisal, implementation, supervision/monitoring,
evaluation etc.
iii. The State Government may formulate better tendering procedures to weed out incompetent
contractors from the impaneled list of contractors to
of projects.
iv. The State Government may create a Re
w
v. The State Government may computerise the system o
re
vi. The State Government may augment the staff strength of quality control departments for
better implementation of qualify control measures.
vii. The State Government may make proper budget provision for all the projects at the
commencement of the financial year itself.
Suggested Strategy for sanctions RIDF during 2006-07
1. Since the State Government has been drawing substantial assistance under RIDF, it is
preferable that it may take stock of potentials of all sectors that can be covered under RIDF in the
ars( as normally allowed under RIDF), the projects may be
ojects vis-a-vis medium irrigation
may implement intensive programmes through the help of NGOs
y motivate and orient the farmers for the concept of
ent.
ify roads/bridge projects as far as possible under the overall
state for exploitation over a period of 2-3 years and come out with a blueprint identifying specific
activities and create a shelf of projects to be submitted under RIDF.
2. Instead of posing medium irrigation projects of high outlays which is not feasible to be
achieved in the span of two to three ye
posed in a truncated fashion.
3. Priority may be accorded to BKVY and Minor Irrigation pr
projects which can be implemented generally at a lower cost per hectare.
4. The Participatory Management of irrigation structures under BKVY programme is yet to
stabilise and State Government
and institutions like WALMI to properl
participatory irrigation managem
5. The State Govt. may ident
connectivity planned instead of posing in a scattered fashion.
6. Diversification State Government may accord priority for fisheries, animal husbandry,
, social sectors while identifying projects for diversification. Some of the
. Slaughter Complexes for ensuring supply of hygienic meat
watershed management
sectors are suggested below :
I. Fish landing centres in potential areas.
ii. Production of animal vaccine.
iii. Flood protection measures.
iv
Synergy between RIDF and other developmental programmes.
The RIDF projects are having a substantial impact on the infrastructural development in rural
and investment credit and extension activities. It
areas which should have a multiplier effect on other developmental programmes particularly ,
credit dispensation in respect of both short-term
calls for the following steps by various agencies.

24. i) Increasing the extension support by the line departments of GoO to the areas which have been
provided with better irrigational facilities, better connectivity so as to bring about higher
production and productivity through propagating scientific and commercial agriculture.
ii) Creation of Water User Associations by GOO in the feasible areas where irrigation is created to
promote participatory irrigation management.
e banking sector to agriculture and
one block each of 5 selected districts viz, Malkangiri (K Guma), Nabrangpur
osagumuda), Nayagarh (Daspalla), Kandhamal (Khajuripada) and Kalahandi (Th.Rampur)
ce and special block plans may be prepared by the
r RIDF.
V clubs and SHGs in feasible areas.
lity and spread of NGO are
ritical factors.From bankers side , rating, appraisal , credit linkage , repeat lending and post
nkage follow are to be done on scientific basis. SHGs which are self administered micro forums
r proximity,trust,commitment and flexibility are to attempt democratic functioning, fund
anagement and encourages income generating activities for quality upscaling of
nge should emanate from people’s willingness,desires and involvement
and promoters should be successful in eliciting organized effort from poor in
iden
of N
SH
rces and their
iii) Providing adequate short-term and long-term credit by th
allied activities in the above areas. Agro-processing units and non-farm activities may be
encouraged by banks. A list of completed RIDF projects is already sent to SLBC / DCCs for
taking into account increased need for credit in such areas.
iv) Under the scheme of Pilot Project for Integrated Development being implemented by
NABARD in
(K
projects identified should be given preferen
State Government unde
v) Banks may launch VV
vi)Diversification: State Government may accord priority for fisheries, animal husbandry,
watershed management, social sectors while identifying projects for diversification. Some of the
activities like Fish landing centres in potential areas, Production of animal vaccine, Flood
protection measures and Slaughter Complexes for ensuring supply of hygienic meat may also be
considered.
12. mICRO CREDIT INNOVATIONS
Issues for discussion :
Even though SHG-Bank model has emerged as a mainstream model for delivering micro finance
services, all is not well.Only 60% of the groups, meet the NABARD standards that means that the
promoting agencies including NGOs will have to ensure promotion and nurturing as per the
method prescribed for which quality,size,resources,expertise,credibi
c
li
fo
m
SBLP.Commitment to cha
and NGOs
increasing control over resources and regulatory institutions by making them aware and
tifying available resources in and around them.However, the human touch which is the hall
GOs should not b be diluted while developing professionalism .
Specific issues in brief
G level
A great deal of local feeling and knowledge is required to assess the local resou
potential , different ways of exploiting them, the cost involved and after all the finance.This
technical knowledge is not made available to SHGs.The government agencies should play a
supportive role by providing the processed information for better decisions at the SHG end.
On account of non-expansion of knowledge base , limited absorption of new skills and
refinement of existing skills.Thus, the SHGs follow a set agenda thereby making it stereotype
and monotonous.

25. High dependency on subsistence oriented Agriculture has not helped SHGs to come out of
poverty trap. Even though there has been sectoral shift of output, the sectoral distribution of
rimary,secondary and tertiary sectors has remained stagnant.
anks operating in rural areas provide credit for productive purposes. Pure
aves the field wide
s against the wish of the GOI, there lies a vast gap in promotion of mFIs in the country,In India ,
more than that of banks. Approximately, 700 of such
gro f :
networking, non-
s and social investors
hal
break even and become sustainable. For which they will have to
household index
roducts and services by market research
del
n
rations and managing risks
not help sustainability
workers across p
MicroFinance movement may have made strides in poverty alleviation and women’s
empowerment, but it has not been able to free rural Orissa from the stranglehold of local
shylocker i.e.money lenders.The traditional money lender lives and lives well. Typically,
mFls including b
consumption loans are discouraged and most often not sanctioned. This le
open for the money lender to step in, especially in times of marriages or festivals or for
household expenses, healthcare,emergencies and the like.
mFI level
Promotion of mFIs
A
the profitability of better performing mFIs is
mFIs exists in the country and very few are operating in Oirssa. Most of the mFIs are unable to
w on account o
Week character(poor closeness,diluted commitment and less transparency
Less capacity&competency(infrastructure,trained manpower and rapport,
adoption of business model)
No skill in credit and financial intermediation
No research and innovation
entry to commercial marketNon-profitability character restricting
lenges before sustain ability of mFIsC
However , the NGOs are to
act as under:
Spreadsheet calculations to know how many clients would need to be served to break even
leading to know the cost of operations
Recruit and train staff. Some heavy up front investment might be required
Minimizing leakage of funds for non-poor by using
Group promotion by clients
Development of demand driven p
Manage risk portfolio around 5% expecting to loose half of this
Keep operating cost ratio below 20%
Develop a strategic business plan and financial mo
Co tributors to sustainability
Lowering costs ope
Broader offerings in terms of products and services combined with higher asset qualities
helped mFIs push up the productivity frontier
Cost cutting by decentralizing and standardizing MIS, simplifying appraisal with credit
scoring and basing compensation on performance
Building equity to leverage more debt
Efficiency and staff productivity
Improving MIS and portfolio tracking to ensure quality of portfolios
Mobilisation of money through grants has its limitations and does

26. Ch llenges to Institutional Financial Sustainability
Cost of providing micro Finance services are high and mFIs charging in the range of 20-24%
can meet the costs
Pull between least cost business model and full service business model- More the diversified
products and a full range of services, more is the scope for competitive interest rate
a
d to have commercial minded boards, commercial orientation , address to the need
lated structures while not loosing social
rove performance,
anagement and build appropriate information systems that
he need for coming closer
nd supply banks will
IS
rtise in professional knowledge have not been able to develop an MIS for
ance portfolio
Ser
The
Loc re very much controlled on quality of services, investment , credit
ating is a key tool for transparency.
an objective assessment of an MFI’s potential
Rat CRIL AND CRISIL have been helping funders and mFIs to gain an objective view of
ent,acceptability and dissemination of standards
e to the needs of
t linkage
at initial stages.
ynamic view of the organization and shoud not be static. It should
Rat sider high returns instead of capital inadequacy
MFIs nee
of the stakeholders , need to move into more regu
aspects. The experience of SHARE microfin ltd has revealed the centrality of an appropriate
legal form to the profitability, sustainability and growth of an mFI
MFIs need to diversify its sources of livelihoods just like it wants its clients to and should
offer fee based services in addition to fund based services
Innovation in integrating with financial market is critical in India where the regulatory
framework does not permit raising of public deposits. MFIs need to imp
transparency, internal controls, m
meet both current and future needs.Most importantly if mFIs are to have a more commercial
orientation, they need to move into regulated structures while not loosing on social aspects.
Bank Level
Banks and mFI synergy - T
Commercial banks have high potential as a source of funds,especially in India where banks are
fairly liquid. In India, mFIs have been able to leverage their equity at levels far higher than
anywhere else in the world. However, going by the large gap demand a
have to show interest in wholesaling rather than retailing and therefore, the relationship
between banks and mFIs has space both for cooperation and competition.
and Creditable databaseM
Banks despite expe
monitoring the health of micro fin
Issues in mainstreaming
Serving poor is still a taboo for bankers for various reasons
ving poor is still identified with social banking and considered at par with state run
interventions
re exist so many disempowering practices while dealing with the poor
al area banks a
decisions,manpower planning and investment in infrastructure , technology etc including
regulation on interest rates
Issues with Raters
R
Rating helps funders to gain
Rating helps institutions to indentify,analyse risks and examines break even for sustainability
ers like M
their performance, supporting developm
and promotion of information sharing.However , the raters must be sensitiv
the MFIs who are engaged in poverty reduction as ratings may not allow any marke
Ratings should take a d
consider growth according to business plan
ings should con

27. Low ratings should not be the end of the road
Issues with Government
Focus on promotion government sponsored subsidized micro finance services rather than self
help
ess emphasis on working with VAs/NGOs
Moderate stress on capacity building of Mission Shakti field level functionaries
Less mobilization of extension services for building capacity of poors and entrepreneurs
MicroInsurance -issues
Designing product for minor but frequent ailments-lower cost and higher frequency from
self-insurance
Higher cost and critical by formal insurance companies
Middle of the spectrum by credit
Thus MI should morph from savings to credit to institutional insurance
L