Major farm credit push ahead

Credit disbursals to double from Rs 80,000 cr to rs 160,000 cr in the next three years

Finance ministry is all set to double farm credit in the next three years from, Rs 80,000 crore in 2003-04 to over Rs 1,60,000 crore.

The jump in farm credit in the current fiscal year would be to the tune of Rs 1,05,000 crore.

The ministry has ordered the banks to ensure a 30 per cent growth over the credit extended during 2003-04.

The ministry has scheduled a meeting with top bank officials on September 9 to take stock of the matter and felicitate those banks which have achieved the target of farm credit disbursal.

"Our ministry is all set to achieve the target set by the Union finance minister P Chidambaram. The agri-credit will be doubled in the next three years, and during the current fiscal year, it would go up by 30 per cent over the previous year," said N S Sisodia, secretary, ministry of finance.

"To achieve this target, the emphasis has been on increasing accessibility of Kisan Credit Cards (KCCs) to farmers, bringing into fold on an average 100 new farmers by 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 at least 10 agri clinics in each district and providing credit to tenant farmers and oral lessees," said Sisodia.

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

The rural-urban credit-deposit ratio have been adverse for the rural credit segment. Even the dramatic turnaround of several sick regional rural banks has been attributed to treasury operations because of arbitrage income due to falling interest rates.

"While the new government at the Centre is putting the focus back on rural India and a 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 scheduled meeting of the finance ministry with the bankers on September 9 will encourage the banks to increase its lending to the agri-sector by 30 per cent over last year," said Sisodia.

The figures of long-term capital formation in agriculture, the growth of term advances to agriculture and allied sectors, all point towards a sluggishness in that sector, which reflects that rural India has not been getting as much attention from the banking sector.

"The efforts of the banks towards farm credit disbursal will be monitored at the highest level and Nabard has become the nodal agency for policy implementation, operationalisation, close monitoring and follow-up among other," said Sisodia.