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Budget may raise agri credit to nearly ₹18 lakh crore
Successive budgets have enhanced the farm-credit target over the years, from about ₹10 lakh crore in 2017-18 to about ₹16.5 lakh crore in the current financial year
The Union Budget 2022-23 to be presented on February 1 is likely to increase agricultural credit target to ₹18 lakh crore, an increase of 12.5% from ₹16.5 lakh crore for the current fiscal year, officials aware of the development said.
The budget may see announcement of steps to strengthen agricultural lending by scheduled banks and primary agricultural credit societies, which are last-mile village institutions that play a key role in disbursal of farm credit to millions of farmers, the official said.
Successive budgets have enhanced the farm-credit target over the years, from about ₹10 lakh crore in 2017-18 to about ₹16.5 lakh crore in the current financial year.
“In the current financial year, banks are expected to exceed the target set for loan disbursal for farm activities,” an official said, requesting anonymity because he is not authorised to speak to the media.
Since banks and credit societies have exceeded the target consistently, the target is likely to be raised in the upcoming Budget, the official added.
The livelihoods of nearly half of all Indians is tied to the agriculture sector.
Timely availability of loans is critical for farmers, who take credit to meet expenses related to various farm inputs, such as fertilisers and seeds.
The Agriculture Infrastructure Fund, announced as part of the Atma Nirbhar Bharat Abhiyan, is likely to further boost credit to the agriculture sector.
Analysts say that though the actual disbursal of loans have always exceeded the target set in the Budget, credit has traditionally been geographically skewed towards south India, while in north-east, it is very low. “There is a need to ensure more equitable spread of farm credit flow,” said Anand Vishwanath, a former agricultural credit officer with Union Bank of India .
According to the annual Economic Survey 2020-21, during 2020-21, in the actual disbursal of loans up to November 2020, southern states had a 40% share, while this was less than 2% for northeastern region. “This shows that farming is largely non-commercial and subsistence-led in the north-east,” Vishwanathan said.
