UP farm credit potential at Rs 2.68 trn in FY20, up 13% over current fiscal

Higher credit flow to boost state's agro economy in crucial election year

Amid high-pitched political rhetoric over farmers’ issues in run up to the 2019 Lok Sabha polls, the aggregate credit potential in the agricultural and allied sectors of Uttar Pradesh has been pegged at more than Rs 2.68 trillion for 2019-20.

This is 13 per cent higher than the corresponding figure of Rs 2.37 trillion for the current 2018-19 financial year. National Bank for Agriculture and Rural Development (Nabard), in its UP State Focus Paper (SFP) for 2019-20, has projected the state rural credit potential for the next fiscal to grow by over 13 per cent to Rs 2,68,250 crore.

However, 13 per cent growth for the next fiscal is lowest compared to previous years, which are marked with steeper growth of as high as 25 per cent in 2012-13 and 2016-17. (See Table)

Meanwhile, the estimated credit flow would supplement different agricultural and allied segments, such as crop production, animal husbandry, fisheries, water resources, plantation and horticulture, rural infrastructure, renewable energy, rural housing, export and education etc.

Of total potential, agriculture accounts for the lion’s share of 67 per cent in the projections, followed by the Micro, Small and Medium Enterprises (MSME), which has witnessed its outlay increase by a whopping 33 per cent over the previous year keeping in view the thrust accorded to the sector by the Yogi Adityanath government under its flagship One District, One Product (ODOP) scheme.

The UP government has been working in consort for achieving the goal of doubling the farmers’ income by 2022. In 2007, the state had announced the waiver of crop loans worth Rs 36,000 crore pertaining to almost 8.5 million small and marginal farmers in UP to provide succour to farmers and enable them seek fresh loans from banks.

Recently, Prime Minister Narendra Modi also launched the ambitious PM Kisan, which is the minimum guarantee scheme covering over 120 million small and marginal farmers in India. Of these, nearly 21.4 million are estimated from UP. The scheme would cost the exchequer Rs 75,000 crore annually and entitle beneficiaries to a sum of Rs 6,000 in three equal installments. On Sunday, more than 10 million farmers, including four million from UP, were disbursed the first installment payout of Rs 2,000 in their bank accounts.

SFP contains aggregate of credit potential under different sectors of economy, both farm and non-farm, the status of infrastructure under each sector/sub sector and critical gaps. It is part of the RBI-initiated decentralised credit planning by Nabard to estimate credit potential in different sectors of economy. Depending upon this Nabard roadmap, commercial banks prepare the Annual Credit Plan (ACP) for UP, fixing individual bank targets under the lead bank scheme.