Government Of Indi The Four Distributional Aspects Of...

According to the expert group on Financial Inclusion (GOI, 2008) only 27% of farmers have access to institutional credit. It is true that there have been some improvements in flow of farm credit in recent years. However, the Government has to be sensitive to the four distributional aspects of agricultural credit. These are: (a) not much improvement in the share of small and marginal farmers . (b) decline in credit-deposit (CD) ratios of rural and semi-urban branches. (c) increase in the share of indirect credit in total agricultural credit and. (d) significant regional inequalities in credit. (Policies for Raising Agricultural Growth and Productivity in India). ( S. Mahendra Dev, Indira Gandhi Institute of Development Research, Mumbai) The Government of India has already put in place an agriculture credit policy to improve access of farmers to institutional credit. Steps would be taken for extensive coverage of farmers under the Kisan Credit Card Scheme. Micro credit and micro insurance will be promoted as an effective tool for encouraging production and reducing risk. Credit cooperatives have an important position and role in the rural financial system and priority would be given to reforms and revamping of cooperative credit institutions as per the recommendations of the Vaidyanathan Committee. Credit counselling centres would be established where severely indebted farmers can be provided a debt rescue package/ rescheduling to save them from a debt trap. National Bank