Banks urged to up credit flow to small, tiny sector beneficiaries

Banks should increase the flow of credit to the small and tiny sector, Devaki Muthukrishnan, regional director, RBI, said at the State Credit Seminar 2006-07.

Total advances outstanding under SSI as of September was Rs 4,974 crore, constituting 6.67 per cent of the total advances.

Investments towards converting wasteland and fallow land should also be treated as an integral part of agriculture lending and Karnataka is yet to exploit this, she said.

Estimates towards development of forestry and wasteland in the state is projected at Rs 18.51 crore for 2006-07.

Urging the state's planners, Nabard and bankers to come together and chalk out strategies for appropriately utilising resources for augmenting the production of farm and other produce, she said this should result in greater socio-economic development in the state.

During the last 13 years, the proportion of net irrigated area to net sown area has improved 4.9 per cent only from 20 per cent in 1990-91 to 24.9 per cent in 2002-03.

"We have to look at potential of sprinkler, drip, soil, water retention method through watershed development, minor, medium and major irrigation to increase the ratio of net irrigated area to net sown area," she said.

With regard to farm mechanisation, she pointed out that Rs 735.18 crore fixed for 2006-07 is lower than Rs 771.41 crore the target set for 2005-06.