No doubt good Institutions are real strengths for any economy to grow fast, but they cannot remain parasites and turn out to be white elephants in the long run. NABARD and SIDBI were set up with lot of fanfare but a seriuos introspection would reveal that they have not played their role effectively and both agriculture and small Industries have suffered over a period cannot be ignored. NABARD could have done wonders by playing the role of a coordinating agency bringing in the necessary infrastructure to give a boost to agricuture and rural development.Agricultural sector suffers for want of adequate and timely finance, lack of adequate infrastructure like roads, stoarge, transportation , marketuing and exploitation my politicians and middlemen in all possible ways one can imagine. If NABARD had been proactive, agricultural greowth and its share in GDP would not have registered such a steep fall and shamed the nation which is predominantly an agricultural one.The farmers even today suffer for want of irrigation, insurance, timely finance, infrastructure etc which NABARD could have easily taken care of with proper coordination with states agricultural departments, Insurance Companies, marketing and distribution agencies with proper storage facilities and cheap transportation facilities. Instead they concentrated on refinancing ignoring the presnce of Cooperatives, RRBs and other agencies involved in rural development. The fact remains that after creation of NABARD, agriculture and Rural segment has suffered cannot be challneged.Similar is the case with SIDBI. Small Scale sector which is the provider of maximum employment opportunities and which can give a boost to our exports have not been given the required support to grow with all potential it had. Institutions are there to identify the gaps in infrastruture, the potential for growth and provide the required support in terms of finance, professional management for enhanced, productivity with quality and export etc.Hope MUDRA Bank will learn its lessons from the failures of NABARD and SIDBI and will emerge as a unique set up to set up and support new and old micro units. The author has expressed his concern from past experience and seeing perhaps the poor performance of agriculture, Small scale units and micro units with all institutional presence exclusively set up for giving a phillip to the rural segemnt.
Dr.T.V.Gopalakrishnan
(This comment appeared in Money Life dated 11/4/15 against the article Mudra Bank Confusions Galore)
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