Agricultural Credit in Bangaru Telangana

Agricultural Credit in Bangaru Telangana
Highlights

Credit occupies an important place in agricultural development strategy. Out of the total projected credit plan of Rs. 72,119 crore during 2015-16 for Commercial Banks in Telangana, Rs. 30,995 crore credit is targeted for agriculture and allied activities,which is about 42 percent of total credit plan, showing 14 percent increase over previous year allocation.

Credit occupies an important place in agricultural development strategy. Out of the total projected credit plan of Rs. 72,119 crore during 2015-16 for Commercial Banks in Telangana, Rs. 30,995 crore credit is targeted for agriculture and allied activities,which is about 42 percent of total credit plan, showing 14 percent increase over previous year allocation. About 32 percent of total credit plan is directed towards crop loans, 7 percent towards agricultural term loans, and 3 percent towards allied activities (see Figure 3.6).

Source: Annual Credit Plan of Telangana 2015-16, State Level Bankers’ Committee (SLBC)

An amount of Rs. 23,209 crore is projected towards Crop Production Loans (Production Credit) in 2015-16, as against Rs. 18,718 crore in 2014-15. An amount of Rs. 7785.87 crore is projected towards agriculture term loans including allied activities (Investment Credit) in 2015-16.

Table 3.6: Telangana State Credit Plan for 2014-15: Targets and Achievement (Rs in Crore)

Sl No.

Segment

Target 2014-15

Achievement of targets 2014-15

% achievement of targets

1

Crops Loans

18,718

18,420

98%

2

Agri. Term Loans

6,238

5,985

96%

3

Allied Agri. Activities

2,277

2,872

126%

4

Total Agricultural (1+2+3)

27,234

27,276

100%

5

Micro & Small Enterprises

6,588

13,330

202%

6

Total Other Priority Sector

6,725

7,641

114%

7

Total Priority Sector (4+5+6)

40,547

48,247

119%

8

Non-Priority Sector

22,501

65,304

290%

Total Advances (7+8)

63,048

1,13,552

180%

Source: Annual Credit Plan of Telangana 2015-16, State Level Bankers’ Committee (SLBC)

Rs.48,247 crore was allocated towards priority sector in 2014-15 as against the projected target of Rs.40,547 crore, thus registering 19 percentage point increase. During the same year, Rs.27,276 crore was disbursed, as against projected credit plan of Rs.27,234 for agriculture sector (consisting of crop loans, agriculture term loans and loans to allied activities).However, it may be noted that Rs. 22,501 crore was targeted for non-priority sector and its achievement was about Rs. 65,304 crore showing an increase of about 290 percent [see table 3.6].

Box 1: NSS Report on All India Debt and Investment Survey: Major findings for Telangana state

70th Round of the National Sample Survey (NSS) on “All India Debt and Investment Survey” (data collected during January 2013 to December 2013) gives a picture of the credit structure, asset holding, liabilities, capital formation of the households etc. Some of the highlights of the report pertaining to Telangana state are listed below:

  • The average value of the asset for cultivator and non-cultivator in the rural Telangana household is Rs.13.9 lakh and Rs. 3.8 lakh respectively while at all -India level it is Rs. 28.7 lakh and Rs. 6.7 lakh respectively.
  • The average asset value for rural household of Telangana is Rs. 6.38 lakh and that of urban Telangana is Rs 18.45 lakh, which is 2.9 times higher indicating high inequality between rural and urban population in the State.
  • The Incidence of Indebtedness (IOI) among the households in rural areas of Telangana is twice higher than the IOI of rural All-India. Around 59% of rural household are indebted in Telangana State as against 31% in All-India.
  • Indebtedness is higher among the cultivators as compared to other occupational category; about 74% of cultivators in Telangana are indebted.
  • While the debt asset ratio among the rural and urban areas of Telangana is around 7.95 % and 8.58% respectively, in case of India it is a slow as3.23% and 3.7 % respectively.

Table 3.7: Incidence of Value of asset, Indebtedness and Debt in Telangana and India

Rural

Average Value of Asset (Rs.)

Incidence of Indebtedness (in %)

Amount of Debt (Rs.)

Debt Asset Ratio

Telangana Rural

Cultivator

13,89,460

74

84,423

6.1

Non-cultivator

3,80,024

54

39,142

10.3

All-India Rural

Cultivator

28,72,956

46

70,580

2.5

Non-cultivator

6,74,527

29

25,741

3.8

Source – NSSO Report on Debt and Investment (70th Round), Government of India.

G.Rajendera Kumar

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