Nabard announces Rs3.36 trillion lending plan for priority sector in Maharashtra in FY18
- Padmaavat release: Rajasthan minister says Raje govt to approach Supreme Court
- 20 AAP MLAs have sought time to meet President Kovind: Manish Sisodia
- Donald Trump marks year one with US government shutdown drama
- Bawana factory fire: 17 feared dead, Delhi govt orders inquiry
- IMF, World Bank laud RBI for ‘strengthening’ supervision
Mumbai: The National Bank for Agriculture and Rural Development (Nabard) on Tuesday announced a Rs3.36 trillion lending plan for the priority sector in Maharashtra in 2017-18. The plan includes Rs58,862 crore in crop loans and Rs27,973 crore in agriculture term loan.
In the total priority sector lending plan for 17-18, agriculture credit--crop loans and agriculture term loans—accounts for 26% or Rs86,836 crore. Farm credit accounted for a similar share in Nabard’s priority sector lending projections in 2016-17.
In 2016-17, Nabard had projected to issue crop loans of Rs54,352 crore which it later revised to Rs51,235 crore. The investment credit target for agriculture and allied activities was Rs27,116 crore in the previous fiscal year.
R.N. Kulkarni, Nabard’s chief general manager, Maharashtra regional office, said that lending institutions—public sector banks, co-operative banks, and private sector banks—had achieved 82% of the revised target in 2016-17. The overall priority sector lending plan of Rs3.36 trillion marks a 13.6% increase over the previous financial year’s projection of Rs2.96 trillion, Kulkarni said.
Nabard on Tuesday presented its ‘state focus paper’ to Maharashtra chief minister Devendra Fadnavis, who asked the agency to look at the credit projections not only from the monetary point of view. “Especially for the commercial banks, priority sector lending is by compulsion. Don’t let it be so. These projections are fine but also look at the number of farmers institutional lenders reach out to,” Fadnavis said.
The credit projections estimate that the Mumbai region will have the highest share --52% or Rs1.74 trillion--of the total priority sector lending in 2017-18. The sugar-rich Western Maharashtra follows with a 21% share. Nabard has observed in its credit plan that “credit has a tendency to flow in those areas where infrastructure is well developed. This is amply established by the fact that after Mumbai, Western Maharashtra, which has better infrastructure compared to other regions, accounts for 21% of the projections.”
Ironically, the Marathwada and Vidarbha regions, the most critical zones in terms of the intensity of Maharashtra’s farm crisis and chronic drought, are projected to get a share of only 7.91% and 7.90%, respectively. Kulkarni admitted that regional imbalance in Maharashtra was a “real factor that needed to be acknowledged”. Nabard has projected that farmers in Vidarbha will be issued crop loans of Rs14,327 crore and Rs13,735 crore in Marathwada. Farmers in Western Maharashtra, a bulk of whom are sugar cane growers, are projected to get crop loans of Rs20,762 crore.
Saying that the ground-level farm credit flow shows better coverage over the years, Kulkarni added that the share of priority sector lending had gone up to 36% in 2015-16 from 30% in 2013-14. “In absolute terms, credit for agriculture and allied activities went up by 84% during the period 2013-2016. As regards investment credit which forms the basis for capital formation in agriculture, the increase in absolute terms during this period was 291%,” Kulkarni said.
The Maharashtra government and Nabard on Tuesday agreed to set up a joint committee to find a model that brings farmers back into the institutional credit system. The committee should suggest a “sustainable model” that makes farmers who have gone out of the institutional credit system “credit-worthy again”, Fadnavis said while announcing such a committee.
Kulkarni agreed to form the committee and depute representatives from the public sector banks. Maharashtra government’s additional chief secretary, finance department and additional chief secretary, planning department, will be on the committee, Fadnavis said.
Nabard on Tuesday presented its ‘state focus plan’ to the Maharashtra government that projects to lend Rs3.36 trillion to the priority sector in Maharashtra in 2017-18. Agriculture credit accounts for 26% of this credit plan. Fadnavis pointed out that “a number of farmers have gone out of the institutional credit system over the years for a variety of reasons. This has happened especially during the drought years.”
He said Nabard and other banks should think about ways to bring these farmers back into the formal credit system. “In the last two years we have rescheduled farm debt which gave relief to a large number of farmers. But this is not a sustainable model because these farmers have not been brought back into the system,” Fadnavis said.
Pointing out that the farm sector in Maharashtra had recorded a 12.5% growth in 2016-17 due to bumper production of food grains and oil seeds, Fadnavis said the “turnaround year of 2016-17 should not be a rare phenomenon”. “We want to achieve a sustainable farm sector growth of more than 10%. For that to happen, lending institutions like Nabard need to take a 360 degree view of the farm sector and their annual credit plans. Unless we all follow a holistic approach to agriculture, we won’t be able to double farmers’ income by 2022,” Fadnavis said.
Referring to Indian Meteorological Department’s forecast of normal rainfall in 2017, Fadnavis said even if Maharashtra received its average rainfall this year, he was confident that the state would come out of the agriculture distress.