Analysis of institutional credit to agriculture sector in India

Since the middle of the fifties, there has been dramatic swell in the supply of agricultural credit in India accompanied by increase in the base of institutions providing such credit. The green revolution, witnessed in some parts of the country, was facilitated by institutional credit. The financial institutions played a leading role in mobilizing savings and then channelizing these savings for investment into dynamic economic activities. Several programmes, namely Small Farmers Development Agency (SFDA), Integrated Rural Development Programme (IRDP) were launched with credit as the main apparatus for their accomplishment. New institutions like RRBs and NABARD were formed to facilitate increased supply of formal credit to agriculture and pass on added plunge to agricultural rural development. The opening of remarkable rural branches of commercial banks helped not only in spreading out of rural credit but also enlistment of rural savings. The professional money lenders had nearly gone from the villages and the role of informal credit has decreased noticeably. Since credit is one of the vital inputs for agricultural development. It capitalizes farmers to commence and implement new technologies. The paper is an attempt to analyze the performance of the financial institutions in loan disbursement to agriculture sector in India for the period from 2012–15.