NABARD Current Affairs

North Koel Reservoir Project: Water Resources Ministry ink MoU with Bihar and Jharkhand

The Union Ministry of Water Resources, River Development and Ganga Rejuvenation has inked Memorandum of Understanding (MoU) with Bihar and Jharkhand for completion of balance works of North Koel reservoir project.

Moreover, supplementary Memorandum of Agreement (MoA) was signed between Ministry of Water Resources, National Water Development Agency, NABARD with both states for funding under Long Term Irrigation Fund (LTIF) for the project.

Funding

The project is scheduled to be completed in 30 months at the estimated cost of Rs. 1622.27 crores. Of this Rs. 1013.11 crores will be borne by Union Government as grant from LTIF under Pradhan Mantri Krishi Sinchai Yojana (PMKSY). I60% will be financed by Central Government from LTIF and remaining 40% of cost will be borne by the States through loan financed by NABARD.

North Koel Reservoir Project

The project is situated on North Koel river, tributary on Sone River. It aims to provide irrigation to 111,521 hectares of land annually in most backward and drought prone areas in Jharkhand and Bihar.

The construction of the projected originally had started in 1972 and continued till 1993 when it was stopped by the Bihar forest department over environmental concerns.

The Mandal dam as part of the project had threatened to submerge portions of the Palamau Tiger Reserve and Betla National Park. The National Wildlife Board (NWB) had cleared the project in June 2017 with certain conditions.

North Koel River

North Koel River rises on Ranchi plateau in Jharkhand. It joins the Sone River (only right bank tributary of Ganga River) a few miles north-west of Haidarnagar. Its principal tributaries are the Auranga and the Amanat. It meanders through the northern part of Betla National Park.

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Parliament passes NABARD (Amendment) Bill, 2017

Parliament has passed the National Bank for Agriculture and Rural Development (Amendment) Bill, 2017 with the approval of Rajya Sabha. Lok Sabha already had passed the bill in August 2017.

The Bill seeks to amend National Bank for Agriculture and Rural Development (NABARD) Act, 1981. The Act establishes NABARD for providing and regulating facilities like credit for agricultural and industrial development in the rural areas.

Key Features of the Bill

The Bill allows Union Government to increase capital of NABARD from Rs. 5000 crore to Rs 30,000 crore. Further, it allows Union Government to increase the capital more than Rs 30,000 crore in consultation with the Reserve Bank of India (RBI), if necessary.

The Bill provides that Union Government alone must hold at least 51% capital share of NABARD. Further, it transfers share capital held by RBI valued at Rs. 20 crore to Union Government. Currently RBI holds 0.4% of paid-up capital of NABARD and remaining 99.6% is held by Union government and this causes conflict in RBI’s role as banking regulator and shareholder in NABARD.

The Bill replaces terms ‘small-scale industry’ and ‘industry in tiny and decentralised sector’ with terms ‘micro enterprise’, ‘small enterprise’ and ‘medium enterprise’ as defined in MSME Development Act, 2006.  Further, it allows NABARD to provide financial assistance to banks if they provide loans to the MSMEs.

The Bill substitutes references to provisions of the Companies Act, 1956 with references to the Companies Act, 2013. It includes provisions dealing with definition of a government company and qualifications of auditors.

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