A Study on Trends and Impact of Agricultural Credit in India (original) (raw)
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Trend and Growth of Flow of Credit to Agriculture after 1991 in India
Agriculture in India is at a crossroads and major challenge of the policy makers is to reverse the trend of deceleration in agricultural growth which is directly associated with the declining of public investment in agricultural research and development, fragmentation of holdings, lack of infrastructure and structured markets, outdated technology and inappropriate input pricing policies of the government. The crisis of agricultural stagnation needs immediate attention and treatment on the part of planners and policy makers. Recognizing the continuous deceleration of agricultural growth, the present study attempts to analysis the trend and growth of flow of credit to agriculture after 1991in India. The study based on secondary sources of data compile from several sources, revealed that structure of credit outlets has witnessed a significant change and commercial banks have emerged as the major source of institutional credit to agriculture in recent years, but the declining share of investmental credit in total credit may constrain the sustainable growth of agriculture in India. The situation calls for concrete efforts to augment the flow of credit to agriculture, alongside to exploring the new innovations in the farming practices, product design and methods of delivery through better use of technology and related processes. Facilitating credit through processor, NGO's and input dealers that are vertically integrated with farmers for providing them critical inputs or processing their produce, could increase the credit flow to agriculture significantly.
Emerging growth & trends of agricultural credit in Uttar Pradesh: An overview
International Journal of Academic Research and Development, 2016
Agriculture sector has been playing an important role in economic development as well as for improving socioeconomic conditions of small and marginal farmers in Uttar Pradesh. Capital plays an important role for increasing agricultural production, productivity, income, employment, and food security. However, capital formation is a major problem faced by this particular sector. Farmers are basically facing the problems of access to adequate credit, timely and low cost credit from institutional sources. Therefore, to raise the agricultural production, an adequate and timely credit is essential. The government has brought several reforms in banking sector to increase the agricultural credit for agricultural development in Uttar Pradesh. But, credit institutions have been failed to provide credit to the marginalized section of farmers. Credit institutions are facing various constraints like recovery problem, security problem and sound socioeconomic problems in the state. The major challenge of the credit institutions is to provide adequate credit, remove inequality among farmers, and increase productivity. The purpose of this study is to analyse the growth of agricultural credit in Uttar Pradesh. This study is based on both primary and secondary data. Primary data has been collected from Bundelkhand region and Western region of Uttar Pradesh. Credit is a vital tool for increasing economic activities, supporting farmers for better protection as well as for bringing about a balance in the economy. Credit must be provided timely to the farmers for increasing agricultural production.
Agriculture Credit in India: An Analytical Study
This paper examines the concerns and issues in agricultural credit in India. The analysis states that the credit delivery to the agriculture sector continues to be insufficient. It appears that the banking system is still hesitant on various grounds to provide credit to small and marginal farmers. Transformation in banking policies and practices and the resultant of and access to total bank credit during the post-bank nationalization period have not satisfactorily addressed equitable and efficient delivery of agriculture and rural credit. Due to declining in public capital formation in the rural and agriculture sector and the persistent unenthusiastic attitude of rural bankers towards formal financing, the planners and policymakers are believe on microfinance to suitably supplement formal banking in rural India.
CONTRIBUTION OF LENDING INSTITUTIONS IN THE GROWTH OF INDIAN AGRICULTURE
CONTRIBUTION OF LENDING INSTITUTIONS IN THE GROWTH OF INDIAN AGRICULTURE, 2020
The study examined the role of lending institutions in the development of Indian agriculture. Data for the study was obtained from secondary sources obtained from published articles, annual reports of RBI, NABARD, publications of Central Government Offices etc. The data were analyzed using descriptive statistics such as percentages, frequencies and compound annual growth rate (CAGR). The results reveal that in the early years particularly during the pre-green revolution era, agricultural credit was dominated by non-institutional sources, mainly moneylenders who are known to extort the farmers by charging exorbitant interest rates. However, the turn of the post liberalization era witnessed a paradigm shift with the institutionalization of agricultural credit in India. This has led to a remarkable success in terms of agricultural credit provision with the institutional sources of credit performing a leading role in agricultural credit delivery to farming households. Recently, institutional credit sector has performed astonishingly by surpassing its annual targets with few exceptions from 2011-12 to 2018-19. Furthermore, the results indicate that the commercial banking sector has controlled its counterparts in agricultural credit disbursement in rural areas as pictured by both CAGR and achieved credit targets of the institutions.
A study on institutional credit to agriculture sector in India
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The institutional credit has been conceived to play an important role in the agricultural development of India. A large number of institutional agencies are involved in the disbursement of credit to agriculture. However, the persistence of money lenders in the rural credit market is still a major concern. In this backdrop, the present study has assess the quantum of loans issued and outstanding by institutional agencies and to examine the progress of Scheduled Commercial Banks in supplying agricultural credit in India. The relevant information was gathered through secondary data and compound growth rate were used for the analysis of data. The study reveals that the highest increase in loans issued was in the case of Scheduled Commercial Banks while the lowest was in the case of Co-operatives on the other hand the total number of account holders in scheduled commercial banks has increased from 5,841 to 30,538, whereas the amount of finance increased from 14,516 to 2,71,670 in the ref...
Agriculture including allied activities, accounted for 14.5 per cent of gross domestic product (GDP) at 2004-05 prices, in 2010-11 as compared to 14.7 per cent in 2009-10 and 46.3 per cent in 1970-71. For the modernization and to create competitiveness in agricultural sector credit is an important input. Since independence Government of India (GOI) has been taken various measures to institutionalize the agricultural credit. The flow of credit to agriculture sector was not increased as expected by policy maker in Ninth FYP. In light of this, the GOI announced a „Comprehensive Policy on Agricultural Credit (CPAC)‟ on 18 June 2004. Subsequently, the Union Budget for 2004-05 presented on 8 July 2004 proposed „Doubling of Agricultural Credit (DAC)‟ in the remaining period of three years of the Tenth FYP i.e. during 2004-05, 2005-06 and 2006-07 over 2003-04 as the base year. The relevant information was gathered through secondary data and compound growth rate were used for the analysis of data. The study reveals that credit flow to agricultural sector increased by this policy, but momentum lost in eleventh FYP. And also appear some serious issues like, regional imbalance in credit supply, mismatch with real sector indicators of the economy, skewed toward large farmers etc
Dynamics of agricultural credit flow in the pre and post reform period in India
International Journal of Advanced Education and Research, 2017
Agriculture is the lifeline of majority of the people in India. It accounts for about 19 percent of GDP and about two thirds of population is dependent on the sector. In view of this importance the Government and Reserve Bank of India (RBI) have played a important role in setting up a broad based institutional framework for catering to the credit requirements of this sector. The policymakers over the past years increased the institutional sources of credit but neglected the qualitative aspect of credit delivery system. Agricultural growth in terms of major crops has witnessed a deceleration despite jump in quantity of credit delivery. The major challenge of the policy makers is to reverse the trend of deceleration in agricultural growth. Such a deceleration is directly associated with the declining of public investment in R&D, fragmentation of holdings, lack of infrastructure, obsolete technology and improper input pricing policies of the government. Hence the crisis of agricultural stagnation needs urgent attention and rigorous treatment on the part of planners and policy makers. Given this macro scenario, the study attempts to analyse the trend and growth of flow of credit to agriculture both in pre and post reform period. The study based on secondary sources of data compile from several sources and these data revealed that structure of credit outlets has witnessed a significant change and commercial banks have emerged as the major source of institutional credit to agriculture sector in the recent past few years. But the declining share of investment credit in total credit may constrain the growth of agriculture in India. This alarming situation calls for serious efforts to augment the flow of credit to agriculture.
Impact of Agricultural Credit on Agriculture Production: An Empirical Analysis in India
Available data suggest that agricultural credit has been rising in recent years as a share of both the value of inputs and the value of output. There are wide regional disparities in the disbursement of agricultural credit by scheduled commercial banks. At the same time the share of agricultural GDP in total GDP is falling. In this context, this paper examines the role of direct and indirect agriculture credit in the agriculture production taking care of the regional disparities in agriculture, credit disbursement and agriculture production in an econometric framework using Dynamic Panel Data Analysis with Instrumental Variables using Arellano-Bond Regression. The analysis suggests that the direct agriculture credit amount has a positive and statistically signifi cant impact on agriculture output and its effect is immediate. The number of accounts of the indirect agriculture credit also has a positive signifi cant impact on agriculture output, but with a year lag. These results reveal that even though there are several gaps in the present institutional credit delivery system like inadequate provision of credit to small and marginal farmers, paucity of medium and long-term lending and limited deposit mobilisation and heavy dependence on borrowed funds by major agricultural credit purveyors, agriculture credit is still playing a critical role in supporting agriculture production in India.
An Analysis of Agricultural Credit by Scheduled Commercial Banks: A Study of Himachal Pradesh
2018
After the nationalisation of Banks in 1969, the commercial banks were made to play a more direct role in financing the agricultural sector. Since then they have come a long way and have become the pivotal institution in providing agricultural credit. The present study has been undertaken to study the growth of agricultural credit advanced by scheduled commercial banks (SCBs) in India in general and Himachal Pradesh in particular. It was found that there was significant growth agricultural credit given by SCBs. The relationship between agricultural credit by SCBs and agricultural gross state domestic product (AGDSP) was also assessed using simple linear regression model. Not only was the model found to be significant, but it was also found that agricultural credit by SCBs had a significant impact on the AGDSP.