Growth and issues in agricultural credit with special reference to Uttar Pradesh: A district level analysis

Agricultural credit in itself is not an input but it helps in creating environment for the adoption of modern production technology and encouraging private investments on the farms. A large number of institutional agencies are involved in the disbursement of credit to agriculture. The Government of India, Reserve Bank of India and National Bank for Agriculture and Rural Development (NABARD) has initiated several policy measures to improve the accessibility of farmers to the institutional sources of credit. Due to the proactive policies, agricultural credit disbursement in the country increased from Rs.46268 crore in 1999-2000 to Rs.1392729 crore in 2019-20 at a compound annual growth rate (CAGR) of 19.81 per cent and that for Uttar Pradesh increased from Rs.29056 crore in 2008-09 to Rs.1 17444 crore in 2019-20 at a CAGR of 15.96 per cent. The per hectare credit flow indicates that in Uttar Pradesh there was an impressive increase from Rs.15431 in 2011-12 Rs.43718 in 2019-20. However, there exists wide inter-district disparities as are indicated by the range of Rs.13862 per hectare in Banda district to Rs. 186787 per hectare in Meerut district. Only 34 districts out of the 75 had per hectare credit flow above the state figure. Thus the inter-districts disparities across the state in the disbursement of agricultural credit by the Rural Financial Institutions is very significant. Therefore, it warrants attention of the policy makers for mitigating regional and inter-district disparities. The ratio of agricultural credit to GDDP varied from 4.14 per cent in Sant Ravidas Nagar to 125.53 per cent in Gautam Budh Nagar district and this ratio for the state is 14.20 per cent as compared to the 46.73 per cent for all India. While the ratio of agricultural credit to GDDP in 29 districts was more than the state average, 46 districts have less than the state average. There is need to increase the agricultural credit flow in the credit starved districts/regions (Bundelkhand and Eastern Region) in the state to achieve sustainable agriculture growth and contribute more towards attaining the status of Atmanirbhar Bharat. Study suggests that the access and distribution of agricultural credit is skewed in favour of better endowed districts/regions and within the same region tilted towards better off agricultural households.