Institutional Credit to Agriculture in India: Certain Issues and Implications

Abstract

Timely availability of adequate credit is essential for any productive activity. This is more so in the case of agriculture because of its seasonal character. With the predominance of marginal and small cultivators in Indian agricultural sector, with limited resources of their own, the role of credit assumes crucial significance in Indian agriculture. A study of the recent trends in agricultural credit in India shows that though there has been an increasing flow of institutional credit to agriculture in the country, non-institutional sources have also been exhibiting an increasing trend in recent years. The study points out that attainment of the desired results in the agricultural field in the country requires measures to supplement the flow of institutional credit to agriculture by other non-credit measures, including objective credit appraisal and credit advice to the farmers. This paper is a brief discussion of these and related issues in the field of agricultural credit in India in recent years.