Lok Sabha Question No. 4094 (UNSTARRED), answered on 2018-08-10
Subject: Agricultural Credit
Ministry: FINANCE
Asked by: SUSHMITA DEV, JYOTIRADITYA MADHAVRAO SCINDIA

## Government of India Ministry of Finance Department of Financial Services LOK SABHA

Unstarred Question No. 4094

To be answered on Friday, August 10, 2018/Shravana 19, 1940 (Saka)

## Agricultural Credit

4094. KUMARI SUSHMITA DEV: SHRI JYOTIRADITYA M. SCINDIA:

Will the Minister of FINANCE be pleased to state:

(a) whether the Government has instructed the Public Sector Banks (PSBs) to step up the agriculture credit to all the eligible farmers in the country in view of the decline in the share of investment credit in the sector;

(b)  if  so,  the  reaction  of  the  PSBs  in  this  regard  and  the  details  of  agriculture  credit  provided  to  farmers  in  the country, State/UT-wise;

(c) whether PSBs have not met the targets for lending to micro and small enterprises during the past two years;

(d) if so, the reasons therefor; and

(e) the steps PSBs proposes to meet the target of extending loans to farmers and micro and small enterprises during the current financial year?

## Answer

The Minister of State in the Ministry of Finance (Shri Shiv Pratap Shukla )

(a)  &  (b):  Government  fixes  agriculture  credit  disbursement  targets  for  the  banking  sector  every  year  and  banks have consistently surpassed these targets. Further to increase the share of investment credit for agriculture and allied activities and to boost asset creation and capital formation in rural areas, agriculture credit targets are fixed by the Government. As reported by National Bank for Agriculture and Rural Development (NABARD), total agriculture credit disbursement during the year 2015-16, 2016-17 and 2017-18 was Rs. 9,15,509.92 crore, Rs. 10,65,755.67 crore and Rs. 11,68,502.84 crore respectively.

State-wise  details  of  agriculture  credit  provided  by  banks  during  2017-18  as  reported  by  NABARD  is  given  in Annexure .

(c) to (e): In terms of Reserve bank of India (RBI)'s Master Direction dated July 07, 2016 on Priority Sector LendingTargets and Classification, a target of 40 per cent of Adjusted Net Bank Credit (ANBC) or Credit Equivalent amount of  Off-Balance  Sheet  Exposures  (OBE),  whichever  is  higher,  has  been  set  for  lending  to  the  priority  sector  by domestic scheduled commercial banks and foreign banks with 20 and above branches. Within this, a sub-target of 18 per cent of ANBC or Credit Equivalent amount of OBE, whichever is higher, has been prescribed to all domestic Scheduled Commercial Banks, including Small Finance Banks, for lending to Agriculture. In addition, a sub-target of 7.5 percent of ANBC/CEOBE, whichever is higher has been prescribed for lending to Micro Enterprises.

As  against  target  of  40%  of  ANBC  or  Credit  Equivalent  amount  of  OBE  for  total  priority  sector  lending,  the achievement  in  respect  of  Public  Sector  Bank  was  38.39%  and  39.94%  during  the  year  2016-17  and  2017-18 respectively,  as  reported  by  RBI.  For  agriculture  Advances,  against  target  of  18%  of  ANBC  or  Credit  Equivalent amount of OBE, the achievement in respect of Public Sector Bank was 17.81% and 17.96% during the year 2016-17 and 2017-18 respectively, as reported by RBI. For lending to micro enterprises, against target of 7.5% of ANBC or Credit Equivalent amount of OBE, the achievement in respect of Public Sector Bank was 6.24% and 6.39% during the year 2016-17 and 2017-18 respectively,  as reported by RBI.

RBI has informed that, there exist appropriate provisions to monitor the performance of banks against the stipulated targets/ sub-targets, including Agriculture. To ensure continuous flow of credit to priority sector, the guidelines have also  prescribed  monitoring  of  priority  sector  returns  figures  on  'quarterly'  basis.  As  per  the  directions  of  RBI, Scheduled Commercial Banks (SCBs) having any shortfall in lending to priority sector shall be allocated amounts for contribution to the Rural Infrastructure Development Fund (RIDF) established with NABARD and other Funds with NABARD/NHB/SIDBI/ MUDRA Ltd., as decided by the Reserve Bank from time to time. The interest rates on banks' contribution to RIDF or any other Funds, tenure of deposits, etc. shall be fixed by RBI from time to time. Further, non-achievement  of  the  priority  sector  targets/  sub-targets  are  also  taken  into  account  by  RBI  while  considering regulatory clearances/ approvals for various purposes to the banks.

Government and RBI have taken  several  steps  to  facilitate  easy  loans  to  Micro,  Small  and  Medium  Enterprises (MSMEs). These inter-alia include, advise to all SCBs to achieve a 20% year-on-year growth in credit to Micro and Small Enterprises (MSEs), allocation of 60% of the MSEs advances to the micro enterprise accounts, a 10% annual growth in number of micro enterprise accounts, adoption of clusters, operationalising at least one specialised MSME Branch in every district etc. SCBs have been mandated not to accept collateral security in the case of loans up to Rs.10 lakh extended to units in the MSE sector and computation of working capital requirements of MSE units has been simplified to make it minimum 20% of the projected annual turnover of the unit.

Annexure to Lok Sabh USQ No. 4094 for 10.08.2018

## Agriculture Credit Disbursement Data for the period 2017-18  (Provisional)    (Rs. In Lakh)

| S.No.                 | State/UT              | Total Agriculture Credit   |
|-----------------------|-----------------------|----------------------------|
| 1                     | DELHI                 | 19,59,799.17               |
| 2                     | HARYANA               | 55,51,071.86               |
| 3                     | HIMACHAL PRADESH      | 14,33,919.48               |
| 4                     | JAMMU & KASHMIR       | 11,30,172.98               |
| 5                     | PUNJAB                | 73,20,150.96               |
| 6                     | RAJASTHAN             | 80,98,976.83               |
| 7                     | CHANDIGARH UT         | 2,35,818.44                |
| 8                     | ARUNACHAL PRADESH     | 8,342.09                   |
| 9                     | ASSAM                 | 6,75,613.84                |
| 10                    | MANIPUR               | 27,280.04                  |
| 11                    | MEGHALAYA             | 35,073.62                  |
| 12                    | MIZORAM               | 17,493.61                  |
| 13                    | NAGALAND              | 20,501.71                  |
| 14                    | SIKKIM                | 12,499.28                  |
| 15                    | TRIPURA               | 2,32,572.61                |
| 16                    | A & N ISLAND          | 12,023.51                  |
| 17                    | BIHAR                 | 26,98,673.37               |
| 18                    | JHARKHAND             | 3,78,093.39                |
| 19                    | ODISHA                | 22,77,721.45               |
| 20                    | WEST BENGAL           | 40,92,023.21               |
| 21                    | CHHATTISGARH          | 15,19,922.76               |
| 22                    | MADHYA PRADESH        | 60,43,188.47               |
| 23                    | UTTARAKHAND           | 7,88,127.24                |
| 24                    | UTTAR PRADESH         | 85,13,614.74               |
| 25                    | GOA                   | 1,24,550.64                |
| 26                    | GUJARAT               | 62,68,293.45               |
| 27                    | MAHARASHTRA           | 76,72,266.10               |
| 28                    | D & N HAVELI UT       | 6,584.22                   |
| 29                    | DAMAN & DIU UT        | 3,325.96                   |
| 30                    | ANDHRA PRADESH        | 1,13,42,747.74             |
| 31                    | TELANGANA             | 58,90,751.41               |
| 32                    | KARNATAKA             | 79,38,377.02               |
| 33                    | KERALA                | 84,17,707.69               |
| 34                    | PUDUCHERRY            | 2,60,798.66                |
| 35                    | TAMILNADU             | 1,58,41,700.46             |
| 36                    | LAKSHADWEEP UT        | 505.70                     |
| TOTAL 11,68,50,283.71 | TOTAL 11,68,50,283.71 | TOTAL 11,68,50,283.71      |

Source: NABARD