Credit flow from different institutions in Punjab agriculture

Strengthening of Indian agriculture is important for elimination of rural poverty, unemployment and sustainable use of natural resources. Due to transformation in agriculture sector from traditionalism to commercialization, the demand for capital has increased. So, agriculture has become highly capital intensive with the introduction of high yielding varieties of seeds especially wheat and rice, chemical fertilizers, pesticides, mechanization and investments in irrigation i.e. on tubewells. These have boosted the demand for agricultural credit in the state. Agrarian credit markets have been at the centre of policy intervention in India since the beginning of the last century, when the co-operative movement was launched in an attempt to provide an institutional alternative to the exploitative moneylenders. Yet, providing adequate and timely institutional finance to farmers continues to be one of the most fixed problems. This paper looks at the falling-out of indigenous institutions, often through substantial government intervention and increasing the number of institutional sources but still farmers have to depend upon non-institutional sources.