Evaluating the gap in demand and supply of institutional lending for paddy cultivation in Thiruvarur district of Tamil Nadu, India

DOI: 10.18805/ijare.v0iOF.7103    | Article Id: A-4380 | Page : 150-158
Citation :- Evaluating the gap in demand and supply of institutional lending for paddy cultivation in Thiruvarur district of Tamil Nadu, India .Indian Journal Of Agricultural Research.2016.(50):150-158

S. Padma Rani*, K. Mani1 and  M. Anjugam

padmaranisenthil@yahoo.com
Address :

Department of Agronomy, Tamil Nadu Agricultural University, Coimbatore-641 003, Tamil Nadu, India.

Submitted Date : 3-02-2015
Accepted Date : 13-10-2015

Abstract

Institutional banking system in India is strengthened through nationalization of banks and many innovative initiatives such as Self Help Group (SHG) - Bank Linkage Programme, Kisan Credit Card (KCC) Scheme and Financial Inclusion. However, many studies conducted in Tamil Nadu, have pointed out several issues such as inadequacy of crop loan amount owing to lower scale of finance and minimum focus on long term agricultural advances that are hampering the banking services directed towards agricultural development.  In order to address these issues, an attempt was made in the present study to assess the causes for and consequences of credit gap in the disbursement of short term / crop loan to the sample farm households; Results of the  study indicated that  the credit gap I (Credit requirement - Scale of finance) and Credit Gap-II (Credit Requirement - Credit Sanctioned) per ha of paddy were lesser in ST borrower farms, which indicted that  though the scale of finance for paddy has been fixed at higher level, i.e., well above the credit requirement, the actual credit disbursement was far lesser than the credit requirement. The working capital, in general, enhances the productivity of the crop and the external financial assistance could help farmers in purchasing the necessary farm inputs in adequate quantities and thereby the farm productivity could be improved. But the scale finance itself was far lesser than the working capital required for cultivating paddy in all categories of farms and this resulted in the wider credit gaps in the different farm categories.

Keywords

Credit gap Rural credit Scale of finance Working capital.

References

  1. Devaraja, T.S. (2011). An Analysis of Institutional Financing and Agricultural Credit Policy in India, Working paper supported by a grant from the University Grants Commission of India
  2. Mohan R. (2004). Agricultural Credit in India: Status, Issues and Future Agenda, RBI Bulletin, November, Mumbai: Reserve Bank of India.
  3. Moorthy, N.A. and Kalamkar, S.S. (2005). Structure and factors determining indebtedness, Indian Journal of Agricultural Economics, 60:288-301
  4. NABARD, (2014). Annual Report, 2013-14. Mumbai: National Bank for Agriculture and Rural Development Mumbai.
  5. NSSO, Government of India, (2013). Key indicators of debt and Investment in India, Government of India.
  6. Sidhu, R.S. and S.S. Gill. (2006). Agricultural Credit and Indebtedness in India: Some Issues, Indian Journal of Agricultural Economics, 61: 11-35.
  7. Rajeswari, S. and Neelakanta Sastry. (2011). Impact of External Finance on Farm Returns an Employment in Kadapa District, Andhra Pradesh, Financing Agriculture, 43: 6
  8. Reserve Bank of India , (2014-15). Handbook of Statistics on the Indian Economy, 2013-14, Mumbai.
  9. AIDIS (2013) Report of All India Debt & Investment Surveys (Various Issues), NSSO.

Global Footprints