Farm Credit Target for FY24 Exceeded by 25%

New Delhi, May 30 (KNN) The agricultural credit for the fiscal year 2023-24 surpassed its target by 25 per cent, continuing a trend of rising disbursements over the past five years.

Official data reveals that total agricultural credit increased to Rs 24.84 lakh crore, comprising Rs 14.79 lakh crore in crop loans and Rs 10.05 lakh crore in term loans, against a target of Rs 20 lakh crore.

This represents a significant increase from 2019-20, where disbursal was Rs 13.93 lakh crore against a target of Rs 13.5 lakh crore.

Despite the impressive growth, crop loans have been maintained at around 60 per cent of total farm credit.

Notably, crop loans up to Rs 3 lakh, which account for 75-80 per cent of total crop loan disbursement, are eligible for interest subvention, often becoming a political issue due to promises of debt waivers.

State-wise disbursal highlights Tamil Nadu, Andhra Pradesh, Karnataka, Uttar Pradesh, Maharashtra, Telangana, Kerala, Rajasthan, Gujarat, and Madhya Pradesh as the top 10 states, collectively accounting for 80 per cent of total loans disbursed last year.

Commercial banks dominate the disbursement landscape with a 79 per cent share, while regional rural banks and co-operative banks contribute 12 per cent and 9 per cent, respectively.

Significant regional disparities exist, with crop loans constituting 67 per cent of farm credit in Madhya Pradesh, 71 per cent in Chhattisgarh, 74 per cent in Uttar Pradesh, and 76 per cent in Rajasthan.

A former top official of Nabard emphasized the need for greater inclusion of farmers from underrepresented states, noting that 20 per cent of farm credit is shared by over 20 states.

Siraj Hussain, former union agriculture secretary, pointed out that the larger disbursement of crop loans might be attributed to their availability for fisheries and animal husbandry, which he considers a positive development.

However, he highlighted the poor disbursement in eastern states, indicating room for improvement.

(KNN Bureau)