IDEAS home Printed from
   My bibliography  Save this paper

Finance for and Bankability of Forestry Development: Projects in India


  • Gupta Tirath


The paper has discussed the procedures and problems in acquiring institutional finance for production forestry projects in India. Some steps, e.g., accounting the returns from outputs other than timber and fuelwood, raising crops by interplanting during the first 3-5 years before the main crops cover the top, and/or raising under storey crops, raising fast growing species, accounting for intangible benefits, reducing costs, have been suggested for improving “bankability” of forestry development projets. The estimated investment needs of the forestry sector during the 1970s and 1980s have been compared with the actual loans sanctioned through the regular institutional sources in India. There is a wide gap between the two which may be partly responsible for a demand for a separate institution to meet the financial needs of the forestry sector and a differential rate of interest in favour of forestry development projects. It is, however, pointed out that only 3-4 per cent of the loans sanctioned in the recent past have been utilized by the FDCs. Two main reasons for this appear to be, i) the availability of large sums of money with the FDCs out of the funds from which lease rental is to be paid to the state governments, and ii) considerably higher net returns from clearfelling natural crops compared to the initial estimates. It is pointed out that except in case of some practically bare areas, the expenditure incurred on raising new forests is likely to be considerably less than the revenues to be derived from clearfelling the area under question. Moreover, some 12 million m3 of annual used increment worth, at least, Rs 3,600 million is left unharvested. If this resource can be harnessed and 50 per cent of it can be ploughed back into forestry, the sector will have enough funds of its own to meet the investment needs of production forestry. This, however, does not obviate the need for developing institutional sources of finance, particularly for the forest poor regions/states.

Suggested Citation

  • Gupta Tirath, 1979. "Finance for and Bankability of Forestry Development: Projects in India," IIMA Working Papers WP1979-10-01_00372, Indian Institute of Management Ahmedabad, Research and Publication Department.
  • Handle: RePEc:iim:iimawp:wp00372

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iim:iimawp:wp00372. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.