Karnataka might be the first state to present an exclusive budget for agriculture. However, the agricultural sector is not in the pink of health because of very low per hectare credit, inactive Kisan Credit Cards and defunct Self Help Groups(SHGs) which play a pivotal role in growth in rural areas.
The credit flow to the agriculture sector in Karnataka during 2010-11 was Rs 26,150 crore, though Nabard had put it at Rs 41,085 crore. However, again this year, Nabard, which prepares the potential linked credit plan (PLP) for each district by assessing potential available in agriculture and rural sector annually, has estimated the credit flow potential for the State in 2012-13 as Rs 52,168 crore, which is 26 per cent higher than last year. It remains to be seen if the State can realise its full potential amidst nagging problems including poor credit-deposits, lower per hectare credit.
Recently, Chief Minister D.V. Sadananda Gowda expressed concern over poor investment credit in agriculture sector in Karnataka and mooted sub-targets (for investment credit) within agriculture credit to the banks. Mr B.S. Shekhawat, executive director of National Bank for Agriculture and Rural Development (Nabard), shared the same concerns: “The Agriculture term loans in the State are low. Repayment of loan will remain difficult to the farmer as Karnataka has 2.5 lakh hectares of dry lands prone to drought. The State’s institutional credit per hectare is Rs 20,400, against that of Andhra Pradesh (Rs 36,000) and Tamil Nadu (Rs 59,000). After Rajasthan, Karnataka has the second highest dry land. So, we must expand the watershed programmes through adequate funding.”
Chief secretary S.V. Ranganath said, “Karnataka fares poorly in credit-deposit ratio in Agriculture sector compared to its neighbours Andhra Pradesh (113%) and Tamil Nadu (110 %). A mere 76 per cent of credit deposit ratio leaves a lot to be desired. While, 65 per cent of our population relies on agriculture, the sector accounts for 70 to 80 per cent of the GDP. So, it is very important to bridge the gap between the bankers and borrowers (farmers). For this, we must cultivate and strengthen network of NGOs, SHGs and farmers clubs. Karnataka has 40 lakh Kisan credit cards (KCC) but 17 lakh are inactive.”
Uma Shankar, regional director of RBI mooted enhancing of agriculture credit with focus on capital formation and investment credit. “Every farmer should be given KCC, which are to be renewed annually. While, scope of funding in the sector should be extended to micro irrigation, recharging of ground water, desilting of water bodies, horticulture, sericulture, grading and packaging, micro hydel projects, bio-fuels.”
