Role of NABARD in Financing Social Forestry Programmes Including Afforestation of Wastelands in India

Abstract

"Afforestation of wastelands requires massive investment of funds that is beyond the reach of most of the owners of such lands. The budgetary allocations of the Government of India and State Governments also are not sufficient to meet the need. A lot of institutional credit is, therefore, needed for the purpose. Duly recognizing the need for institutional credit, the National Bank provides refinance facilities to individuals undertaking forestry activities. This is done under a number of different schemes. The number of social forestry schemes refinanced by the National Bank has been increasing at a very high rate. However, social forestry schemes constitute only 0.61 percent of the total number of schemes sanctioned and account for only 1.64 percent of the cumulative disbursements made by the National Bank up to 1992 under schematic lending. A number of factors have been identified as constraints. In particular, government policies are decelerating the progress of development programmes in the forestry sector. Unless these constraints are overcome, the National Bank cannot play any effective role in providing refinance to developmental programmes undertaken in the forestry sector in the Eighth Five Year Plan."