UP credit potential up 25% at Rs 80K cr

In line with efforts to increase credit flow in agriculture and improve credit deposit ratio (CDR) in Uttar Pradesh, the potential of state ground level credit has been pegged at almost Rs 80,000 crore for 2012-13.

This would be about 25 per cent over the state credit target fixed for the current financial year.

Against the 2011-12 Potential Linked Credit Plan (PLP) for UP at Rs 64,531 crore, the PLP for the next fiscal has been estimated at Rs 79,988 crore.

National Bank for Agriculture and Rural Development (NABARD) executive director Ram Krishna Rao released PLP figures at the state credit seminar here in the presence of state chief secretary Anoop Kumar Mishra, agricultural production commissioner Alok Ranjan and senior bank officials.

As per Reserve Bank of India (RBI) guidelines, annual PLP is part of decentralised credit planning undertaken by NABARD through consultative process to estimate credit potential in various sectors of economy, both farm and non-farm.

Of Rs 79,988 crore, Rs 55,900 crore have been envisaged for agriculture, including Rs 42,000 crore of crop loan and rest agricultural term loan. Agricultural term loan pertains to allied activities, such as farm mechanisation, animal husbandry, water resources, renewable energy, food processing, warehousing, forestry etc.

Rao emphasised on increasing productivity, private capital formation in agriculture, removal of gaps in infrastructure, inclusive growth and financial Inclusion.

On the basis of PLP, the commercial banks prepare Annual Credit Plan (ACP) for UP, which fixes individual bank targets under Lead Bank Scheme.

The various thrust areas for UP have been identified as increasing farm productivity, private capital formation in agriculture, removal of gaps in infrastructure and financial inclusion.

The banks have been asked to launch special credit drives in eastern UP.

“UP has been doing well with Rural Infrastructure Development Fund (RIDF), but more work is needed for augmenting the state credit absorption capacity for faster economic development,” Rao later told Business Standard.

The chief secretary said dairy and horticulture were potential areas for credit absorption in UP.