Uttar Pradesh says credit deposit ratio up: Imbalance among districts, regions persists

A State Level Banker’s Committee (SLBC) review indicates that UP’s credit deposit ratio went up from 46% in March 2017 to about 52% in June 2021

Amid the Uttar Pradesh government’s claims of a significant jump in the credit deposit (CD) ratio, an indicator of growing economic activity, a huge imbalance persists among different districts and regions of Uttar Pradesh.

A district-wise breakup indicates that nine of the nearly 30 districts of eastern UP have a credit deposit ratio of less than 40%. ( Picture for representation)

A State Level Banker’s Committee (SLBC) review indicates the state’s CD ratio went up from 46% in March 2017 to about 52% in June 2021 with the deposits increasing to ₹ 12,80,745.00 crore and advances to ₹ 6,61,811.00 crore.

Chief minister Yogi Adityanath, who presided over a meeting of the State Level Banker’s Committee (SLBC) here on August 11, 2021, said the CD ratio witnessed a 6% jump. He said 43,000 new banking outlets were set up in the past four years and mega credit camps were being organised online, adding that such steps resulted in the increase in the state’s CD ratio.

An additional increase has been claimed on the basis of the SLBC’s revised data in view of the state government’s mega loan distribution drives in recent months, officials said.

The SLBC, constituted in April 1977 as an apex inter-institutional forum to create adequate coordination machinery for development of states, meets regularly and comprises representatives of commercial banks, including small finance banks, wholly owned subsidiaries (WOS) of foreign banks, RRBs (regional rural banks) , payments banks, state cooperative banks, NABARD, heads of government departments and Reserve Bank of India (RBI).

A district-wise breakup indicates that nine of the nearly 30 districts of eastern UP have a CD ratio of less than 40%. Four of them have a CD ratio of less than 30%.

In Bundelkhand, five of the seven districts have a 50%- plus CD ratio while the remaining two districts are in the 40% plus range. No district in central and west UP, however, falls in the less than 40% CD ratio category and most of the districts there are in the range of 50%-plus CD ratio.

“Yes, most of the districts in west UP have a better CD ratio. Although only nine districts in east UP have a CD ratio of less than 40%, the situation in all the west UP districts remains much better,” said a senior officer.

“An increase in the CD ratio is a sign that Uttar Pradesh’s economy is progressing towards higher investment and growth. A rising CD ratio is also indicative of the fact that UP’s improved ranking in the ease of doing business (2nd rank) is translating into increased investment activities. An increased flow of credit to agriculture, industry and trade will also spur entrepreneurship and lead to creation of more jobs. Since Uttar Pradesh is a big state, there is a high disparity in the CD ratio among districts. The state government needs to closely monitor the credit flow in such districts,” said professor Yashvir Tyagi, former head of department of economics, Lucknow University.

“At the all India level, the CD ratio is 70% and above and, therefore, the state has a long way to go to reach close to the national average,” said Tyagi.

About the impact of the government’s support schemes, Tyagi said, “Although the Covid-19 pandemic led to contraction in economic activities in the state, the Yogi government’s proactive approach in facilitating loans to the MSMEs, street vendors, farmers and labourers has helped in maintaining the CD ratio at a higher level.”

“An increase in the CD ratio is a good development. The state government has ensured large amount of loans to MSMEs and small vendors amid Covid-19 pandemic. East UP has remained a neglected region and the state government should come out with special programmes to remove the disparities in neglected districts,” said AK Singh, former director of Giri Institute of Development Studies, Lucknow.

UP’s former chief secretary Alok Ranjan said the CD ratio was in important indication towards where the state’s savings were being spent. “As chief secretary, we also made consistent efforts to increase the CD ratio. Some states like Tamil Nadu have more than 100% CD ratio. Our savings go to states like Maharashtra and there is a need to increase UP’s CD ratio further,” said Ranjan.

Director general, institutional finance, Shiv Singh Yadav said, “We will ensure an improvement in the districts having a CD ratio of 40% or less. We have organised online mega credit camps and an amount of ₹ 9000 crore has been disbursed in the past few months. We are going to hold more mega credit camps in mission mode to ensure the flow of credit. Various credit camps will be organised at the district level next month and block levels thereafter. A target of 60% CD ratio has been set and we will achieve it soon. District consultative committees have been set up and we hope to bring about a further improvement in the situation by the end of 2021.”

CD RATIO IN DISTRICTS

EASTERN UTTAR PRADESH

Azamgarh (22.53%), Ghazipur (29.49%), Jaunpur (29.78%), Mau (29.64%), Sultanpur (32.69%), Ballia (35.26%), Deoria (32.08%), Siddharth Nagar (34.46%), Sant Kabir Nagar (39.09%), Varanasi (40.10%), Kushinagar (40.77%), Ambedkar Nagar (40.68%), Sonbhadra (40.56%), Balrampur (41.22%), Basti (41.55%), Prayagraj (41.76%), Chandauli (41.78%), Gorakhpur (42.35%), Pratapgarh (42.08%), Bhadohi (44.94%), Mirzapur (45.17%), Amethi (47.82%), Maharajganj (46.71%), Gonda (48.08%), Ayodhya (48.23%), Kaushambi (48.32%), Rae Bareli (49.30%), Shravasti (56.47%), Bahraich (59.97%) and Lakhimpur Kheri (65.27%).

BUNDELKHAND

Jalaun (43.85%), Jhansi (46.17%), Banda (52.16%), Hamirpur (50.83%), Mahoba (52.69%), Chitrakoot (52.16%), Lalitpur (72.16%))

CENTRAL UTTAR PRADESH

Unnao (41.53%), Lucknow (44.49%), Sitapur (56.26%), Kanpur Dehat (59.69%), Kanpur Nagar (60.30%)), Barabanki (66.05%), Fatehpur (40.05%) and Hardoi (55.48%).

WESTERN UTTAR PRADESH

Etawah (41.56%), Auraiya (42.60%), Ghaziabad (46.37%), Bulandshahr (50.49%), Firozabad (52.50%), Gautam Buddh Nagar (53.38%), Bareilly (53.84%), Aligarh (54.04%), Baghpat (54.14%), Meerut (56.54%), Farrukhabad (54.47%), Mainpuri (56.87%), Shamli (60.81%), Agra (62.63%), Hapur (61.37%), Saharanpur (61.45%), Hathras (62.07%), Bijnor (62.75%), Mathura (63.66%), Kannauj (69.47%), Muzaffarnagar (64.13%), Pilibhit (74.03%), Rampur (79.07%), Shahjahanpur (70.71%), Etah (74.62%), Kasganj (75.97%), Moradabad (71.73%), Badaun (79.80%), Amroha (84.65%) and Sambhal (88.89%).