Major farm credit push in the pipeline

The quantum of farm credit will be enhanced from Rs 80,000 crore to Rs 1,05,000 crore during the current financial year.

The ministry has directed banks to ensure 30 per cent growth over the credit extended during the year 2003-04 and has scheduled a meeting with banks on September 9 to take a stock of the situation on agricultural credit disbursal.

"Agri-credit will be doubled in the next three years and in 2004-05, Rs 1,05,000 crore is estimated to be disbursed. To achieve this target, emphasis will be on increasing accessibility of kisan credit cards (KCCs) to farmers, bringing into fold on an average 100 new farmers in the rural and semi-rural branches of the commercial banks, financing over two new investment projects in the agriculture and allied activities, for establishment of atleast 10 agri clinics in each district and providing credit to tenant farmers and oral lessees." N S Sisodia, secretary in the ministry of finance, told Business Standard.

Sisodia was here to attend a workshop organised jointly by Indian Institute of Management-Ahmedabad (IIMA) and IIM-Bangalore (IIMB) on micro-finance.

"While the new government at the Centre is putting the focus back on rural India with thrust on increasing access to agricultural credit, there would be increasing pressure on the banking system to extend itself to the agriculture sector in a big way. The meeting with bankers on September 9 will encourage the banks to increase lending to the agri-sector by 30 per cent over last year," said Sisodia.

The poor figures of long-term capital formation in agriculture and slow growth of term advances to agriculture and allied sectors pointed towards sluggishness and indicated rural India had been neglected by the banking sector.

"The efforts of banks in purveying of credit will be monitored at the highest level and NABARD is the nodal agency for the policy implementation, operationalisation, close monitoring and follow-up amongst other," said Sisodia.