Nabard pegs credit potential for K'taka at Rs 20,906 cr in 07-08

The National Bank for Agriculture and Rural Development (Nabard) has estimated the potential credit for agriculture and rural sector for Karnataka at Rs 20,906.71 crore for the fiscal 2007-08. This is a rise of 17.43 per cent over the current fiscal target, which is Rs 17,803 crore.

According to a draft Potential-Linked credit Plan (PLP) prepared by Nabard, the broad sector-wise potential for the state includes Rs 9,509.38 crore for crop loans (Rs 8,400 crore in 2006-07), Rs 3,162.02 crore (Rs 2,483 crore in FY07) for agriculture term loan, Rs 2,319.41 crore (Rs 1,765 crore in FY07) for non farm sector and Rs 5,915.90 crore (Rs 5,154 crore in 2006-07) for other priority sectors.

Based on the PLP, the individual banks subsequently prepare their district credit plan. For example, for the current fiscal, the banks had prepared annual credit plan of Rs 21,579 crore for the state.

In tune with the finance minister's announcement during the Budget speech early this year, Nabard has also set apart a refinance window of Rs 1,000 crore exclusively for the agro-processing infrastructure and market development for the year 2007-08, Girija Nambiar, general manager, Nabard, told Business Standard.

"Considering the immense potential the agro-processing sector possesses in improving value realisation to the farmers and growth of additional employment, Nabard has decided to create an additional credit for the sector," she said.

She said as per the Reserve Bank of India (RBI) guidelines, the sector-wise potentials estimated in the PLP would be discussed in the special district consultative committee meeting being held in January next year and arrive at the implementable district credit plan for 2007-08.

Based on the outcome of this meeting, the commercial banks will prepare a detailed district-wise credit plan for the next fiscal.

Nabard is in the process of preparing the state focus paper for Karnataka and the state credit seminar will be organised in the second week of January 2007, she said.

As against the potential credit plan of Rs 17,803 crore for the current fiscal, the banks disbursed Rs 11,566.41 crore as against the set annual target of Rs 21,579 crore, about 53.60 per cent of the annual target, by the end of September 2006.

Nambiar said under doubling of credit flow to agriculture, an amount of Rs 7,197.96 crore had been disbursed by various agencies till the end of October 31, 2006, in Karnataka as against Rs 14,645.99 crore for the current fiscal, thereby achieving 49.13 per cent of the target for the year.