DISTRIBUTION OF AGRICULTURAL CREDIT IN THE PRE AND POST REFORM PERIOD
Journal Title: International Journal of Management, IT and Engineering - Year 2012, Vol 2, Issue 9
Abstract
Agriculture plays a crucial role in the development of the Indian economy. It accounts for about 19 percent of GDP and about two thirds of the population is dependent on the sector. (Economic Survey, 2009). Recognizing the importance of agriculture sector in India’s development, the Government and the Reserve Bank of India (RBI) have played a vital role in creating a broad-based institutional framework for catering to the increasing credit requirements of the sector. The policy measures increased the institutional sources of credit. The policy measures increased the institutional sources of credit. In 1991-1992, the amount of loan issued by the co-operatives was Rs.3934 crore, whereas the scheduled commercial banks disbursed only Rs.2341 crore. The dominance of the co-operatives in the agricultural loan disbursement was retained till the year 2004-2005. In 2005-2006, the direct loan disbursement from the scheduled commercial banks was higher than the co-operative banks. The amount of direct agricultural advances from the scheduled commercial banks was Rs.45644 crore whereas it was Rs.35624 crore for cooperatives in 2005- 2006, the regional rural banks provided Rs.12816 crore in the same year. The agricultural credit policies and the economic reform in general aim to have positive influence on the total volume of institutional credit. However, the rural banking system in India made tremendous quantitative achievement by neglecting the qualitative aspects of the credit delivery system (Shrivastava and Padma Saxena. 2007). Hence an attempt was made to analyze the “Impact of economic reform on the distribution of agricultural credit in India”. To findings of the study shows that the co-operative banks dominated in the total agricultural credit disbursement in the pre reform period. The loan outstanding in the direct agricultural credit was higher for the co-operatives than the scheduled commercial banks in the pre reform period. The dominance of the co-operatives in the agricultural loan disbursement was retained till the year 2004-2005. In 2005-2006, the direct loan disbursement from the scheduled commercial banks was higher than the co-operative banks. The distribution of agricultural credit in the post reform period was significantly higher than in the pre reform period. The economic reform 1991 had significant impact on the distribution of agricultural credit.
Authors and Affiliations
Dr. S. Gandhimathi
Keywords
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