INDIAN ECONOMY
BY,
SHRI SAPTARSHI NAG, WBCS (EXE)
1
CREDIT AVAILABILITY FOR AGRICULTURE IN INDIA
Availability of credit has been the main hindrance in development of agriculture in India.
The banking system is still hesitant on various grounds to purvey credit to the small and
marginal farmers. Less availability of credits makes it difficult to adopt modern
techniques which in turn render agriculture unremunerative and land unprofitable.
Despite government policy of financial inclusion, most of the farmers in India are still
deprived of adequate and timely availability of credit.
Though there has been instruction to the domestic banks to reserve 40% of the Net Bank
Credit for the priority sector lending and 18% out of that amount for agriculture by RBI,
banks over the years have failed in achieving the target. The Rural Infrastructure
Development Fund was set up in 1996 to solve the credit availability crisis. The
Commercial Banks make contributions to the fund for failing to achieve their target for
Priority Sector Lending. The Kisan Credit Card scheme launched in 1998-99 however
was a laudable effort by the government to make credit available at farmers' doorstep.
The scheme facilitated short term loan availability for seasonal agricultural operations
and other agricultural inputs. In addition to that Personal Accident Insurance of Rs
50,000/ against annual premium of just Rs 15/ is being offered along with the cards. So
far the performance of Cooperative banks has been commendable in issuing credit cards
whereas commercial banks lag behind their targets. The performance of the Regional
Rural Banks has been below par. Update of land records and sensitization of bank staff
through training programmes are needed to add to the spread of the scheme.
However there were crying needs for loans for investment and working capital
requirements for the farmers. To take care of the need Sw