International Journal For Multidisciplinary Research

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A Widely Indexed Open Access Peer Reviewed Multidisciplinary Bi-monthly Scholarly International Journal

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NABARD and Rural Infrastructure Development Fund (RIDF) An Empirical Study on Agricultural Growth and Rural Transformation

Author(s) Dr. Mrityunjai Singh
Country India
Abstract In this paper, we study the development impact of Rural Infrastructure Development Fund (RIDF) in India with National Bank for Agriculture and Rural Development (NABARD) on agricultural growth and rural development through public capital. In view of rural infrastructure as a major force in productivity, market integration and inclusive development, we have extended the descriptive institutional analysis in order to make a realistic empirical analysis of RIDF as a development finance instrument. Based on a panel set of states with a panel size of approximately two decades, we use fixed effects and dynamic panel estimation techniques, with lag and non-linearity and distributed effects to account for the long-standing and heterogeneous nature of infrastructure development.
The study investigates two key questions: whether RIDF expenditure plays a linear role in agricultural growth and how this can be used to reduce regional disparities between Indian states. It is done in this way by incorporating key variables like irrigation coverage, credit intensity, rural literacy, and rainfall variation for the model that can be considered as the confounding factors in addition to the heterogeneity and endogeneity we cannot observe in our model. It also extends the empirical framework by including governance quality as a moderating factor and highlights the role of institutional capacity in the development of infrastructure investment.
We expect the findings to show that RIDF operates through lagged and possibly non-linear channels and therefore has stronger medium-term impacts on agricultural output and productivity. If the effects of RIDF are diminishing or threshold and if they are, it would suggest that returns to infrastructure depend on the initial conditions and investment scale. Importantly, the study assesses if RIDF serves as an equalizing mechanism by generating more returns in infrastructure deficit or lagging states, and hence driving regional convergence.
By linking infrastructure finance to development and poverty reduction outcomes such as productivity and poverty reduction, this study offers a comprehensive and policy-oriented perspective on RIDF. This research contributes to the literature by relating institutional finance to public capital and causal inference, and in particular spatial and temporal impact. The research has provided guidance for policymakers on the design and targeting of rural infrastructure investments and highlighted the need for complementary institutional capacity and the need for strategic planning in order to make contributions to development in rural areas.
Published In Volume 4, Issue 4, July-August 2022
Published On 2022-07-08
DOI https://doi.org/10.36948/ijfmr.2022.v04i04.74287

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