Need to make agri credit system equitable -Bishwa Bhaskar Choudhary

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published Published on Dec 5, 2022   modified Modified on Dec 7, 2022

-The Tribune

The agency-wise share indicates that agricultural credit dispensation in the country is heavily dependent on commercial banks and points towards the poor credit delivery capability of cooperative banks and regional rural banks.

THE availability of finance is a key driver of progress in any sector. In the case of agriculture, access to adequate credit assumes vital significance since most of the agriculturists are small or marginal farmers. It has been argued that credit provides control over resources and facilitates liquidity to the farmers. A defining feature of agricultural credit is that it is an indirect input that enables the farmer to redirect agricultural activities and adopt modern production technologies, which have a bearing on what happens on his farm and, ultimately, on his income and livelihood. This criticality of agricultural credit lends it a power that no other indirect input has commanded. The provision of institutional credit has always occupied a central place in planned development of India.

The agricultural credit delivery system in the country is characterised by the coexistence of informal and formal sources of credit supply. The informal sources mainly include commission agents, traders, private moneylenders, etc. Before the beginning of the planning era in India, almost all credit requirements of agriculture were met by usurious informal sources. Since Independence, interventions have been made by the Government of India for unconstrained credit expansion through institutional sources to protect the farmer’s interest and spur impel agricultural growth.

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The Tribune, 5 December, 2022,

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