Year: 2017 | Month: March | Volume 62 | Issue 1
Study on Access to Farm Credit by the Small and Marginal Farmers in India under the Policy on Priority Sector Lending (PSL)
DOI:10.5958/0976-4666.2017.00024.9
Abstract:
This study attempts to review quantitatively on the present scenario of access to farm credit by small and marginal farmers and its performances under the policy of priority sectors lending (PSL) in India from different secondary sources of information w.e.f. 2001. The aim of PSL program is to ensure adequate credit to vulnerable sectors of the economy like agriculture. Farm credit, in India, has increased by 15.78 per cent from FY10 to FY15. Despite various policy attempts at priority lending to poor farmers, very little progress has been made. Nearly, 51.9 per cent of Indian farmers and 85 per cent of marginal and small farmers are under debt but formal credit facilities extended to them is very poor (30%). Only 40 per cent of the total farmers have received Kishan Credit Card. Most of the PSL programmes are related to interest rate subvention. As per RBI policy, 40 per cent of loans should go to PSL sector of which 18 per cent were to go to agriculture. But, it was just 13 per cent in 2015. Due to changes in norms and regulations, scope of PSL has been. The share of direct agricultural loans to marginal farmers has fallen sharply from almost 23 per cent in 2005 to just 4.3 per cent in 2013. They are 85.03 per cent in no. of holdings and 44.5 per cent in area operated. But, the present shares are only 7 per cent and 8 per cent respectively. India’s agricultural production and extent of credit have shown a positive growth rate. But loans to farmers are not driving the rise in agricultural credit but are agri-businesses and corporate sectors involved in agriculture. So, delivery and access of farm credit to poor farmers under PSL is not yet satisfactory. Various experts emphasized Govt.’s proactive role and suggested for appropriate design and innovation in implementation of PSL policy effectively. It is, thus, suggested that more effort can be inter alia alternative livelihood, poverty alleviation, mainstreaming marginalized groups and promotion for appropriate technologies/inputs for higher production, income and quality of lives of small and marginal farmers.
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