Comparative Analysis of Institutional Agricultural Credit Pattern in Punjab and Kerala

Credit plays a significant role in the development of agriculture. The study examined the source wise institutional agricultural credit disbursement in Punjab, Kerala and India during the period 1985–86 to 2011–12. The secondary data required for the study were collected from Report on Currency and Finance ond State Level Banker's Committee. The source-wise pattern of the institutional agricultural credit shows that the cocoperatives were the major source of institutional agricultural credit during 19805. The period of 19905 witnessed a gradual shift among the source of institutional credit. The commercial banks replaced the co-operatives to become the main source ofinstitutional agricultural credit in Punjab, Kerala as well as India as a whole after the mid-nineties. The shift was mainly due to the increase in the number of rural branches of the commercial banks due to stronger priority sector lending rules and also due to the fall of cooperative institutions because of the lack of adequate financial resources. The share of the cooperatives was on a decline during the whole era. Hence, the cooperative credit institutions in both the states as well as in the country as a whole should be strengthened to cater to the short term credit requirement of-farmers.