Evaluating Effectiveness Among Cooperatives vis-a-vis Other Social Institutes - A Case Study of Nabard's Rural Innovation Fund & Other Schemes

Canada Congress, Saskatoon University, Canada 2007

28 Pages Posted: 13 May 2007


National Bank For Agriculture & Rural Development (NABARD) is set up as an apex Development Bank by the Government of India with a mandate for facilitating credit flow for promotion and development of agriculture, cottage and village industries. The credit flow to agriculture activities sanctioned by NABARD reached Rs 1,574,800 million in 2005-2006. The overall GDP is estimated to grow at 8.4 per cent. The Indian economy as a whole is poised for higher growth in the coming years. Role of NABARD in overall development of India in general and rural & agricultural in specific is highly pivotal. Through assistance of Swiss Agency for Development and Cooperation, NABARD set up the Rural Infrastructure Development Fund. Under the RIDF scheme Rs. 512830 million have been sanctioned for 2,44,651 projects covering irrigation, rural roads and bridges, healthy and education, soil conservation, water schemes etc. Rural Innovation Fund is a fund designed to support innovative, risk friendly, unconventional experiments in these sectors that would have the potential to promote livelihood opportunities and employment in rural areas.

The assistance is extended to Individuals, NGOs, Cooperatives, Self Help Group, and Panchayati Raj Institutions who have the expertise and willingness to implement innovative ideas for improving the quality of life in rural areas. Through member base of 250 million, 600000 cooperatives are working in India at grass root level in almost every sector of economy. There are linkages between SHG and other type institutes with that of cooperatives.

The very purpose of RIDF is to promote innovation in rural & agricultural sector through viable means. Effectiveness of the program depends upon many factors, but the type of organization to which the assistance is extended is crucial one in generating, executing ideas in optimum commercial way. Cooperative is member driven formal organization for socio-economic purpose, while SHG is informal one. NGO have more of social color while that of PRI is political one. Does the legal status of an institute influences effectiveness of the program? How & to what an extent?

Cooperative type of organization is better (Financial efficiency & effectiveness) in functioning (agriculture & rural sector) compared to NGO, SHG & PRIs.

Using secondary data, out of funded project under the RIDF scheme, suitable number of sample will be drawn from each category; namely; individual, SHG, NGO, PRIs & Cooperatives will be analyzed on the basis of performance in last three years. It will be also analyzed total number of project and amount utilized in each category and their repayment history. Major Accounting Ratio of selected period for gauging financial & operational efficiency, ROI & solvency shall be compared. Relevant quantitative tools shall be used for testing the hypothesis.

The research project will see whether cooperative is superior or otherwise in performance compared other form of formal and informal organizations? What are the influencing factors and how it can be improved in each category in general & more specific in cooperatives. The finding may be useful in designing policy at micro & macro level.

Keywords: innovation, cooperative, SHG, NGO, rural, agriculture

JEL Classification: P13, O1, Q1

Suggested Citation

Sapovadia, Vrajlal K., Evaluating Effectiveness Among Cooperatives vis-a-vis Other Social Institutes - A Case Study of Nabard's Rural Innovation Fund & Other Schemes. Canada Congress, Saskatoon University, Canada 2007, Available at SSRN: https://ssrn.com/abstract=985884

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