The impact of institutional credit on agricultural output in India: An empirical analysis^#

The study attempted to analyse the relationship between gross agricultural production of various states with the institutional credit disbursed to these states, their net irrigated land, and net sown area based on panel data covering the period from 2000 to 2017. The study analysed the impact change in institutional credit provision, expansion of irrigational facilities, and the cultivated area on the total agricultural production. The results suggested that irrigational facilities and the expansion of the net sown area significantly impacted the agricultural output than institutional credit. The growth of agricultural credit is essential for supporting production; however, it would be untrue to assume a perfect correlation. Even though the flow of credit had increased exponentially, it had a limited influence on the output production since it also catered to the farmers' non-productive needs.