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Farmer-the most endangered species

Maharashtra hampered by poor credit

Posted by Ramoo on January 24, 2007

BUREAU
Posted online: Wednesday, January 24, 2007 at 0039 hours IST

PUNE, JAN 23 : A large rural population outside the institutional field, regional disparities in credit flow, continued ineffective use of Kisan Credit Cards by co-operatives. Poor credit flow for marketing are hampering the credit delivery in Maharashtra.

Agricultural credit flow in the state is low as compared to high performing states such as Punjab, Haryana, Andhra Pradesh, Karnataka, Tamil Nadu and Goa. “Around 45% of the population still remains outside institutional credit. Credit is just Rs 3,500 per hectare in Maharashtra, three times lower than Punjab and Haryana,” N Srinivasan, chief general manager, Nabard, Pune, said.

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Regional disparities in income have been sharp from Rs 1,700 per hectare in Marathwada to Rs 6,800 per hectare in Konkan. Actual financing is less than scales prescribed, he said. “Business levels in Maharashtra are well below than that of the other states. The number of deposit accounts per 100 households was just 216 compared to 936 in high performing states. Number of advances per 100 households in the state was 48 as compared to 86 in these states,” he said. Srinivasan was speaking at the state credit seminar 2007-08 held by Nabard to discuss the potential linked credit plan (PLP) projections for the state.

Nabard has prepared a total plan outlay of Rs 20,972 crore for 2007-08 as part of the Central package to double the flow of credit to agriculture over three years from 2004-05.

Srinivasan said the availability of the government subsidy on several investments in rural areas had a dampening effect on credit flow. “With schemes not making bank credit mandatory, there is no post investment monitoring of assets created out of subsidy. The leveraging effect of subsidy and its ability to generate larger assets with consequent impact on employment and incomes is lost on account of disconnect with the banking system,” he pointed out.

“Irrigation infrastructure needs attention from the state. Created storage through several irrigation projects has not been converted into realised irrigation demand. The last mile problems of setting up a distribution network have rendered the projects non-performing. There is a need to prioritise such projects that have created storage,” he said.

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