E-Paper
Farm lending cheerful despite difficult monsoon
A weak monsoon and a drought-like situation in some parts of the country have not affected the flow of agricultural credit in the current fiscal year.
A weak monsoon and a drought-like situation in some parts of the country have not affected the flow of agricultural credit in the current fiscal year.
According to official estimates, credit disbursement to farmers in the April to September period has been on target and state-owned banks have already achieved about 50 per cent of the total farm credit target for the whole of the year.
There were fears that demand for farm credit could slump on account of a weak and late monsoon and public sector banks would fail to meet the set target. The target for agriculture credit flow in the current financial year had been set at Rs 3,25,000 crore. Of this, Rs 1,10,000 crore has already been disbursed. “Disburse-ment for credit towards agriculture sector has been healthy despite a weak monsoon and we hope to meet the set target for the current financial year,” a senior government official said, asking not to be identified. He said state-owned banks, in fact, may even surpass the set target.
Finance ministry sources also said that there is no significant increase in non performing assets on account of farm loans.
The demand for credit during the Rabi season has also been satisfactory. For the previous financial year, the target for farm credit was set at Rs 2,87,000 crore.
While growth in farm loan has been on track, overall appetite for non food credit has been weak in the current financial year. Finance Minister Pranab Mukherjee has already said that the low credit growth in 2009-10 is a cause for worry.
The Reserve Bank of India has indicated that the low credit growth is due to less demand from the manufacturing sector and also the availability of revenue from non banking sources.
