The Finance Minister
(a) to (d): A statement is laid on the table of the house.
Statement referred in reply to parts (a) to (d) of Lok Sabha Starred Question No. *314 to be answered on 16.03.2020 regarding Agriculture Credit by SHRI UPENDRA SINGH RAWAT and SHRI KAUSHAL KISHORE
(a) to (d): The State-wise and Agency-wise agriculture credit disbursement by Banks for the last three years and current year, as on 31st December 2019, as reported by National Bank for Agriculture and Rural Development (NABARD) is provided at Annexure I-IV to this reply.
The objective of agriculture credit on pan-India basis is to meet their short term credit requirements for cultivation of crops, investment credit requirement for agriculture and allied activities and other needs.
As informed by NABARD, the share of small and marginal farmers, which is primarily rural based, in agriculture credit during the last 3 years is as under:
(Accounts in Lakh and Amount in Rs. Crore)
Year 2016-17 2017-18 2018-19
Total No. of Agri Loan Accounts 1070.68 1,131.90 1,255.35
No. of Accounts of SMFs 771.55 845.46 931.36
% coverage of SMFs in no. ofA/cs 72.06 74.69 74.19
Loan disbursed to SMFs 5,34,351 5,80,457.42 6,33,661.43
% coverage of SMFs in loan disbursed. 50.15 49.93 50.42
RBI and NABARD have reported that District wise data for agriculture credit and data on percentage of agriculture credit given to urban areas and rural areas, are not maintained centrally by them. In this regard, NABARD has also informed that since 2004, Service Area Approach has been done away with and now the farmer can avail credit from any of the bank branches. Further, agriculture credit is disbursed on the basis of land holdings of farmers, which is an omnibus concept, without any urban- rural distinction.
The Government/RBI has taken the various initiatives to facilitate hassle free credit to farmers. Some of the major initiatives are as under:
? Government fixes agriculture credit disbursement targets for the banking sector every year and banks have consistently surpassed these targets. Details of target and achievement made in respect of agriculture credit flow during the last three years as reported by NABARD is as under:
(Amount in `crore)
Year Target Achievement
2016-17 9,00,000 10,65,755.67
2017-18 10,00,000 11,62,616.98
2018-19 11,00,000 12,56,829.62
Source: NABARD
? The Master Directions on Priority Sector Lending (PSL) issued by RBI provides that within the overall target of 40% for priority sector, 18% has been earmarked for lending to agriculture sector. Within the 18% target for agriculture sector, a sub-target of 8% for small and marginal farmers has been fixed to help in increasing the flow of credit to small and marginal farmers.
? Government of India implements an interest subvention scheme under which short term crop loans up to ` 3.00 lakh are provided to farmers at a reduced interest rate of 7% p.a. The scheme provides interest subvention of 2% per annum to Banks on use of their own resources. Besides, additional 3% incentive is given to the farmers for prompt repayment of the loan, thereby reducing the effective rate of interest to 4%.
? The Kisan Credit Card (KCC) scheme was introduced in 1998 for issue of KCC to farmers. The scheme aims at providing adequate and timely credit support from the banking system under a single window with flexible and simplified procedure to the farmers to meet their short term credit requirements for cultivation of crops, investment credit requirement for agriculture and allied activities and other needs.
? The benefits of KCC along with interest subvention have been extended to Animal Husbandry and Fisheries farmers.
? To enhance coverage of small and marginal farmers in the formal credit system, RBI has decided to raise the limit for collateral-free agriculture loans from ` 1 lakh to `1.6 lakh.
? The requirement of ''no dues’ certificate has also been dispensed with in respect of small loans up to `50,000 availed by small and marginal farmers, share-croppers and the like and, instead, only a self-declaration from the borrower is required.
? To bring small, marginal, tenant farmers, oral lessees, etc. into the fold of institutional credit, Joint Liability Groups (JLGs) have been promoted by banks.
? NABARD provides short term refinance to Cooperative Banks and Regional Rural Banks (RRBs) through Short Term Cooperative Rural Credit (Refinance) Fund (STCRC Fund) and Short Term Regional Rural Banks (STRRB) Fund respectively, at concessional rate of interest.
? Further, to encourage long term investment credit in agriculture, NABARD provides refinance support to Cooperative Banks and RRBs through Long Term Rural Credit Fund (LTRCF) at a concessional rate of interest for their lending towards investment activities in agriculture.
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