PSU bank farm credit to miss target by Rs 30,000 crore | india | Hindustan Times
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PSU bank farm credit to miss target by Rs 30,000 crore

State-owned banks are likely to miss the agriculture credit target of Rs 2,80,000 crore for the current fiscal for the first time in five years.

india Updated: Mar 17, 2009 21:52 IST
Mahua Venkatesh

State-owned banks are likely to miss the agriculture credit target of Rs 2,80,000 crore for the current fiscal for the first time in five years.

In 2007-08, agriculture loans extended by PSU banks stood at Rs 2,43,000 crore. Official sources said that the banks may fall short by Rs 30,000 crore for the fiscal year that ends this month.

This comes at a time when banks have been asked to increase lending, especially to the priority sector that include the farm segment and small businesses.

A senior government official said that late rains during the kharif season and the entire exercise of providing the Rs 60,000 crore farm debt waiver package to the farmers had brought down credit disbursement in the agriculture sector.

“Though banks may miss the agriculture credit target for the fiscal, it is not a major cause for concern as it was primarily due to the debt waiver exercise,” a finance minister official, who did not wish to be quoted, told Hindustan Times. The official added that a clearer picture would emerge in another month.

As per the October-December data of 2008-09, there has been a contraction in agricultural GDP of 2.2 per cent as against a growth of 2.7 per cent in the previous quarter.