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The Uttar Pradesh government wants commercial banks to increase agricultural credit to farmers and simplify the process of sanctioning loans to bolster investment flow to the sector.
The government is targetting to increase per hectare credit ratio from Rs 15,000/hectare at present to Rs 25,000/hectare in the current financial year.
One of the main reasons identified for low credit is the large number of inactive Kisan Credit Cards (KCC) in the state. Of the 17 million farmers holding KCCs, hardly 35-40 per cent avail of agricultural credit from the banks.
The banks have been told to reenergise all the KCCs, UP principal secretary agriculture Debasish Panda told Business Standard.
There are 22.5 million farmers families in UP, of which 12.5 million are small agriculturists having land holding of acre or less. We aim to bring all the farmers under the institutional credit net to facilitate more investment in the sector, Panda added.
In this regard, state agricultural production commissioner Alok Ranjan on Tuesday held a meeting with the representatives of all commercial banks, agriculture, institutional credit, rural development, dairy, fisheries and horticulture departments.
We will hold a follow up meeting within a week with the officials of Reserve Bank of India (RBI) and National Bank for Agriculture and Rural Development (Nabard), said Panda.
For the 12th Plan (2012-17) period, the state is targetting agricultural growth rate of five per cent.
The ground level credit potential in UP has been pegged at Rs 1,01,315 crore for 2013-14 by Nabard. The potential credit estimates comprise Rs 73,490 crore for agriculture, including Rs 58,928 crore for crop loan. Besides, potential of Rs 12,894 crore have been pegged under non farm sector, including Rs 886 crore under food & agro processing, and Rs 14,931 crore for other priority sector. This aggregates Rs 1,01,315 crore for 2013-14.
The Nabard estimates are incorporated in the State Focus Paper, which aims increasing productivity, private capital formation in agriculture, removing gaps in infrastructure, inclusive growth and financial inclusion.
