Institutional Credit Flow to Agriculture

Based on the data on agricultural credit for the period 1950–2010, the study has shown a considerable increase in institutional credit flow (from 7.3% to 68.8%) and a decline in non-institutional credit flow (from 92.7% to 29.7%). Within the financial institutions, the share in agricultural credit of commercial banks has increased from 0.9 per cent in 1950 to 25.1 per cent in 2010 and of co-operative banks has increased from 3.3 per cent to 24.9 per cent during this period. The study has reported that a total of 1009.1 lakh kisan credit cards have been used by different agencies up to 2010–11. In this the share was highest of commercial banks (44.6%), followed by cooperative banks (40.3%) and regional rural banks (15.1%) and the compound growth rate for total KCCs issued in India was 9.04 per cent. Discussing initiatives taken by the government in agricultural credit flow, the study has mentioned that with the allocation of 8000 to Rural Infrastructure Development Fund (RIDF) for the year 2005–06, the total corpus fund was 78,300 crore. The study has emphasized on the need of promoting micro-finance more vigorously in the rural areas of the country.