An Economic analysis of banking system supporting Indian Agriculture: A case of Kisan Credit Cards
Dr. Byatagaiah. T. P
Agriculture credit, Finance, Banking system, Thrift, NABARD, Productivity.
Indian census report, 2011, states that, around 53% of working population are engaged in agriculture. Hence agriculture is regarded as the ‘back bone of Indian Economy’. Growth of agriculture is necessary to ensure food security, which is the need of the hour. Apart from ensuring food availability and affordability, it also supports the industrial and service sectors too. Hence concentrating on Agriculture ensures all round development of the economy. In order to sustain the growth in agriculture, credit plays a crucial role. Though, agricultural credit is treated as priority sector by banks and financial institutions, availability and flow of bank credit to agricultural sector is not problem free. There are difficulties in identifying, accessing and dispensing of credit by the banks. In order to address the problems in purveying credit for agriculture, RBI had set up a one man high level committee headed by Sri. R V Gupta in 1997 to suggest measures for improving the delivery systems as well as simplification of procedures for agricultural credit. The committee had submitted its report in April 1998. As suggested by the committee, Kisan Credit Card scheme was announced in budget speech of then the Finance Minister Mr.Yashwant Sinha of NDA Government, in 1998-99. He further stated that NABARD will prepare a detailed guideline for the issue of Kisan Credit Card to farmers on the basis of their land holdings. Accordingly NABARD prepared a model scheme for the issue of Kisan Credit Card and submitted to Government of India. After much discussion, the guidelines were finalized and finally communicated to commercial banks, Regional Rural Banks and co- operative banks. The scheme aimed at adequate and timely financial support in a flexible and cost effective manner from the banking system to the farmers for their cultivation needs including purchase of inputs. The scheme was circulated to banks by RBI/NABARD. As at the end of December 2000 about 1 crore KCCs have been issued surpassing the target of 75 lakh fixed in the budget for the year 2000-01. This paper attempts to analyse the magnitude and impact of Kisan Credit cards in India.
Article Details
Unique Paper ID: 152640

Publication Volume & Issue: Volume 8, Issue 3

Page(s): 1010 - 1014
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