Lok Sabha Question No. 109 (UNSTARRED), answered on 2017-12-15
Subject: Agricultural Credit
Ministry: FINANCE
Asked by: SRIRAM MALYADRI

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

## LOK SABHA

Unstarred Question No. 109

To be answered on Friday, December 15, 2017/Agrahayana 24, 1939 (Saka)

## Agricultural Credit

109. SHRI MALYADRI SRIRAM:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government has conducted any survey on credit needs of farmers for production/cultivation, investment and consumption purposes and if so, the details thereof;
- (b)  whether  the  Government  is  aware  that  Kisan  Credit  Cards  (KCCs)  are  being  used  more  for  private consumption expenditure than the farming activities and if so, the details thereof; and
- (c) the steps being taken by the Government in this regard?

## Answer

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

- (a): National Bank for Agriculture and Rural Development (NABARD) has reported that it has not conducted any  survey  on  credit  needs  of  farmers  for  production/cultivation,  investment  and  consumption  purposes. However in  order  to  support  agriculture  and  rural  development  and  to  meaningfully  link  development  and credit planning, NABARD prepares potential-linked credit plans (PLPs) for each district in the country every year. The PLPs provide estimate of credit which can be potentially absorbed at the district level for various agricultural  sectors  and  sub-sectors,  off-farm  sector,  other  priority  sectors,  etc.,.  The  sector-wise  credit projections  captured  in  the  PLPs  are  used  by  various  banks  as  a  guide  to  arrive  at  the  credit  targets  for agricultural and allied sectors in particular and priority sectors, in general in various districts. The PLPs are prepared every year for all the districts in country.
- (b)  &  (c):  In  terms  of  Reserve  Bank  of  India  (RBI)  Master  Circular  on  Kisan  Credit  Card  (KCC)  Scheme dated 03 July 2017, KCC Scheme aims at providing adequate and timely credit support from the banking system under a single window to the farmers for their cultivation & other needs as indicated below:
- a. To meet the short term credit requirements for cultivation of crops
- b. Post harvest expenses
- c. Produce Marketing loan
- d. Consumption requirements of farmer household
- e. Working capital for maintenance of farm assets and activities allied to agriculture, like dairy animals, in land fishery etc.
- f.  Investment  credit  requirement  for  agriculture  and  allied  activities  like  pumpsets,  sprayers,  dairy animalistic.

The aggregate of components a. to e. above form the short term credit limit portion and the aggregate of components under f form the long term credit limit portion.

The credit limit under the KCC is fixed as indicated below:

- i) All farmers other than marginal farmers:

Scale of finance for the crop (as decided by District Level Technical Committee) x Extent of area cultivated + 10% of limit towards post-harvest/household/ consumption requirements + 20% of limit towards repairs and maintenance  expenses  of  farm  assets  +  crop  insurance  and/or  accident  insurance  including  PAIS,  health insurance & asset insurance.

- ii) For Marginal Farmers

A flexible limit of ₹ 10,000 to ₹ 50,000 may be provided (as Flexi KCC) based on the land holding and crops grown including post-harvest warehouse storage related credit needs and other farm expenses, consumption  needs,  etc.,  plus small term  loan investment(s)  like  purchase  of  farm  equipment(s), establishing mini dairy/backyard poultry as per assessment of the Branch Manager without relating it to the value of land. The composite KCC limit is to be fixed for a period of five years on this basis.