Nabard hikes credit target 28%

The National Bank for Agriculture and Rural Development (Nabard) has decided to adopt credit projections of Rs 11,500 crore for priority sectors in Orissa during 2009-10.

This is 28.57 percent higher than Rs 8944.2 crore projected for 2008-09. Earlier, Nabard had assessed the potential linked credit requirement of the priority sector in the state at Rs 9959.22 crore for 2009-10 in its state focus paper. But following discussions of Nabard chairman, UC Sarangi with the state officials, the credit projections were revised upward.

The earlier projections made in the state focus paper include Rs 5030.7crore for the farm sector, Rs 961.98 crore for the non-farm sector and Rs 3862.21crore for other priority sectors. While the crop loan was projected to increase by about 14.6 percent to Rs 3874.11crore, the term loan requirement for agriculture and allied activities was assessed marginally higher at Rs 1159.59 crore in the next fiscal, up from Rs 1112.07 crore in the previous one.

Flow of ground level credit in the state has been increasing over the past five years. The ground level credit flow, which was Rs 4550.58 crore in 2003-04, reached Rs 7045 crore in 2007-08. However, as percentage of achievements against targets, it is on the decline.

The rate of achievement of credit disbursement against the target was 166 percent in 2003-04 and declined to 137.87 percent in 2004-05. After going down to 126.69 percent in 2005-06, it reached 109.67 percent in 2006-07.The rate of achievement further went down to 97.01 percent in 2007-08. The potential linked credit assessment has been incorporated in the state focus paper 2009-10 released by chief minister Naveen Patnaik during the state credit seminar, organised by Nabard.

Speaking on the occasion, U C Sarangi, chairman, Nabard said, credit is a major intervention to bring growth in the agriculture sector. About 84 percent of the landholders belong to small and marginal farmers category and 44 percent of them belong to the schedule caste and schedule tribe.

Since those farmers do not have means for self investment, they are unable to go for technology intensive agriculture without government and state intervention. Stating that the capital formation in agriculture in the country is declining, the Nabard chief said, the 11th five year plan stated that investment in the agriculture sector should be 16 percent of the agricultural GDP.

Chief minister Naveen Patnaik said, the state government has announced a new agriculture policy for improving the productivity of major crops. Finance minister Prafulla Chandra Ghadai said, Orissa has done exceedingly well in doubling of agricultural credit.