Lok Sabha Question No. 185 (STARRED), answered on 2024-12-09
Subject: Sharp Decline in Small Farmers' Agriculture Loan Accounts
Ministry: FINANCE
Asked by: Shri Kuldeep Indora

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

## LOK SABHA STARRED QUESTION NO. *185

ANSWERED MONDAY, DECEMBER 9, 2024/AGRAHAYANA 18, 1946 (SAKA)

## Sharp Decline in Small Farmers' Agriculture Loan Accounts

- *185 Shri Kuldeep Indora:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government is aware that there is a sharp decline in the absolute number of Marginal and Small Farmers' agricultural loan accounts;
- (b) if so, the details thereof and the reasons therefor;
- (c) whether the banks are giving preference only to develop areas in the disbursement of bank credit to the agriculture sector; and
- (d) if so, the reasons therefor along with the steps taken/being taken to mitigate the regional inequality in credit flow to the agricultural sector?

## ANSWER

THE FINANCE MINISTER (SMT. NIRMALA SITHARAMAN)

- (a) to (d): A statement is laid on the Table of the House.

*****

Statement referred in reply to parts (a) to (d) of Lok Sabha Starred Question No. *185 to be answered on 09.12.2024 regarding Sharp Decline in Small Farmers' Agriculture Loan Accounts by Shri Kuldeep Indora:

(a)  and  (b):  The  number  of  accounts  pertaining  to  Small  and  Marginal  Farmers  have consistently increased in the last three years, as indicated below:

| Year    |   Number of Agricultural loan accounts of Small and Marginal Farmers (in crore) |
|---------|---------------------------------------------------------------------------------|
| 2021-22 |                                                                           11.67 |
| 2022-23 |                                                                           12.38 |
| 2023-24 |                                                                           13.06 |

Source: Agriculture Credit data submitted by NABARD

(c)  and (d): To mitigate the regional inequality in credit flow to the agricultural sector the Government has taken various steps which include:

1. The priority Sector Landing (PSL) guidelines prescribe that banks will provide 18% of their  total  loans  to  agriculture  and  allied  sector.  Further,  within  overall  agricultural target, a sub target has been fixed for small and marginal farmers which at present is 10%. Further, PSL guidelines also prescribe an incentive framework for districts with comparatively lower flow of credit and a dis-incentive framework for districts with comparatively  higher  flow  of  priority  sector  credit  which  also  include  credit  to agriculture and Small & Marginal farmers.
2. As  part  of  Ground  level  Credit  (GLC)  target  for  agriculture,  regional  targets  are provided to mitigate regional disparity in agriculture credit flow. Further, in order to ensure increased credit flow to  animal  husbandry, dairy  and  fisheries activities,  the Government also provides a sub-target for these activities. For FY 2024-25, a sub-target of Rs. 4.20 lakh crore has been fixed for these activities within the overall agri credit target of Rs. 27.50 lakh crore.
3. As part of Atmanirbhar Bharat Abhiyan, a Kisan Credit Card (KCC) saturation drive has been launched for farmers including PM Kisan beneficiaries, fisherman and dairy farmers.  Further,  with  a  view  to  cover  maximum  number  of  fishermen,  animal husbandry  &  dairy  farmers  under  KCC  scheme,  the  Government  has  launched  an exclusive weekly district level campaign starting from 15 November 2021 under the ongoing KCC saturation drive.
4. Various steps like technology upgradation etc. have been taken to strengthen Rural Financial Institutes (Rural Cooperative Banks and Regional Rural Banks) which are primarily operating in rural and backward areas of the country.
5. As part of RBI's Lead Bank Scheme, State Level Bankers Committee (SLBC) prepares Annual Credit Plan (ACP) and presents macro perspective on the bank credit potential under  the  Priority  Sector,  rural Infrastructure,  other  support  services,  etc.  and achievement  under  ACP  are  monitored  at  various  fora  viz.  SLBC,  Block  Level Bankers' Committee (BLBC), District Consultative Committee (DCC) etc.
6. The  Government  through  NABARD  provides  allocation  under  Rural  Infrastructure Development  Fund  to  support  the  rural  infrastructure  creation  which  creates  credit absorption capacity in rural areas of the country.
7. A differentiated strategy for financial inclusion has been introduced for support from Financial Inclusion Fund (FIF), wherein more thrust is given to backward districts that are  constrained  by  various  physical,  economic  and  sociological  characteristics. Financial Institutions are creating financial awareness in remote areas through Financial Literacy camps, customer outreach programs.

*****