(THE GIST OF PIB) Linking all Farmers to Institutional Credit
Linking all Farmers to Institutional Credit
- Government has enhanced the agricultural credit target to Rs 16.5 lakh crore in FY22 focusing more on ensuring increased credit flows to animal
- husbandry, dairy, and fisheries.
- Institutional credit has been conceived to play a pivotal role in the agricultural development of India.
- A large number of formal institutional agencies like Co-operatives, Regional Rural Banks, Scheduled Commercial Banks (SCBs), SHGs, etc. are
- involved in providing credit.
- Being more affordable, institutional credit has direct bearing on cost of production.
- Agricultural credit has nearly doubled to Rs.13.92 lakh crore during 2013-14 to 2019-20.
Issues related to agricultural credit:
- Share of non-institutional credit still is around 30%.
- Skewed agency shares in institutional credit with more dependence on SCBs.
- Regional Disparity.
Steps taken to increase Institutional credit:
- Interest Subvention Scheme, through which short term crop loans of upto Rs.3 lakh are provided to farmers at an effective interest rate of 4% per annum.
- Kisan Credit Card enabling farmers to get credit to purchase crop seeds, fertilisers, diesel and other inputs at 4% interest.
- Priority Sector Lending.