AGRICULTURAL LENDING IN INDIA – TRENDS, ISSUES AND STRATEGIES

Sethupitchai Uthiran

Abstract


Agriculture plays an important role in Indian Economy. Agricultural sector, an important component of Priority Sector Lending (PSL). For a country to be called as a prosperous country, the base is to what extent the country is strong in its growth under Agriculture. India is struggling to achieve the growth rate of 4% under Agriculture despite various initiatives taken by Government of India (GOI), National Bank for Agriculture and Rural Development (NABARD), Reserve Bank of India and various other stake holders. Role of Indian Banks in providing technical and financial support to the farmers play a crucial role in various aspects of indicators which decides growth under Agriculture. Understanding well that nearly 80% of the farmers in India are coming under the purview of small and marginal farmer category, RBI fixed 8% of Adjusted Net Bank Credit (ANBC) as bench mark in the latest priority sector guidelines. No doubt that financing of agriculture by the commercial banks brought a change in economy of the farmers, yet financing to agriculture sector is not free from some issues and inconveniences. So this paper is an attempt to study and discuss the trends of agricultural lending in India, Issues and strategies to be adopted in near future for betterment of country’s development in various aspects of meeting demand and supply factors.


Keywords


Agricultural Finance; Priority Sector Guidelines; Issues in Agricultural Finance; Strategies to Improve Agricultural Finance; Production Credit; Investment Credit; Cross Selling Under Agriculture

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References


Bhuwan Bhaskar, “Addressing Agricultural Issues: Now, a State Responsibility” Yojana, March 2015, pp. 54 – 57.

Kewal Kumar and Atul Gambhir, “Financing of agriculture by commercial banks- Problems faced by farmers (An empirical study)”, Abhinav National Monthly Journal of Research in Commerce and Management”, vol. no. 1, issue no. 5. pp. 79 – 84.

RBI Annual report, 21st August 2014, “Credit Delivery and Financial Inclusion”, Chapter IV, pp. 64 – 71 (www.rbi.org.in)

RBI Report, “Internal working group to revisit the existing PSL guidelines” March 2, 2015.

RBI circular on Priority Sector Lending, “Targets and classification” April, 23rd 2015.

Srinivasan N, “Agricultural Finance: Some Hard Questions” - CAB calling, pp. 99 – 102.

Vyas V S, “Report of the advisory committee on Flow of Credit to Agriculture” May 18th 2004.

Website of Reserve Bank of India. URL (www.rbi.org.in).


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