Formal Agricultural Credit in India: A Time Series Analysis

This paper attempts to analyse the performance and changes in the trends and composition of multi-agency network in the disbursement of credit to agriculture sector during the liberalization and post liberalization regime by using time series data from 1990–91 to 2009–10. The data analysis reveals that the institutional credit has become a more popular source of finance to the farmers in rural India and the trends of institutional credit to agriculture sector are positive during the post liberalization period. Whereas, the share of Commercial Banks (CBs) increased and their share stood at 74 per cent in 2008–09, this is mainly because of the advent of financial sector reforms under economic liberalization. Though, over the years, the multi-agency framework of agriculture credit system in India worked well, but still, there is unmet demand for agriculture credit in the country.