Advanced Search
MyIDEAS: Login to save this article or follow this journal

Rural credit delivery in India: structural constraints and some corrective measures

Contents:

Author Info

  • Satyasai, K.J.S.

Abstract

In view of the importance of rural credit to agriculture and rural development, this paper has examined a few structural constraints that hamper the credit delivery and has discussed some of the measures taken to improve the situation. The public policy on rural credit in India has been focussed on institutionalisation as a means of providing cheaper credit to farmers. As a result, the share of private moneylenders has decreased substantially from 93 per cent in early-1950s to 31 per cent by 1991. Disturbingly enough, they have emerged as an important source, more so for the resource-poor with a share of 39 per cent by 2002. The multiagency system onset for giving a wide choice to farmers has turned out to be ineffective due to deficiencies of design and architecture. Also, ailing cooperatives, backtracked RRBs and commercial banks with waning interest in rural credit have contributed to the ineffectiveness of the multiagency system, hampering the credit delivery. Several measures have been taken to revitalise the system from time to time. Cooperatives are being given a package assistance for revival following the Vaidyanathan Committee Report. RRBs have been amalgamated and are being given capital to cleanse up their balance sheets. Commercial banks have been successfully involved in ‘Farm Credit Package’ for doubling the credit and other initiatives of Government of India. The SHG-bank linkage has been promoted on a large scale to supplement rural credit delivery. But, its high transaction costs make it a costly alternative, especially when the business is handled solely by NGOs/MFIs. A thorough overhauling of the rural credit system and its restructuring is the need of the hour. However, it cannot be effective if done alone in isolation without revitalising the Indian agriculture itself.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://purl.umn.edu/47889
Download Restriction: no

Bibliographic Info

Article provided by Agricultural Economics Research Association (India) in its journal Agricultural Economics Research Review.

Volume (Year): 21 (2008)
Issue (Month): 2008 ()
Pages:

as in new window
Handle: RePEc:ags:aerrae:47889

Contact details of provider:
Email:
Web page: http://www.geocities.com/aeraindia/
More information through EDIRC

Related research

Keywords: Agricultural Finance;

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Satyasai, K.J.S., 2012. "Access to Rural Credit and Input Use: An Empirical Study," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 25(2012).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ags:aerrae:47889. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.