Letters: Target vs performance

With reference to “Lifting rural productivity” (February 6), the editorial rightly highlights the futility of increasing total agriculture credit to the level of Rs 10 lakh crore and that this proposed credit is short-term, highly subsidised and cornered mostly by big farmers. Since there are, many times, two crops in a year, the same loan is counted twice to show higher performance, making the process of achieving the target highly suspect. Why does the government not base targets on the actual agriculture loans outstanding during the peak season of kharif and rabi crops? Why we do not simply base our performance on an 18 per cent agriculture credit (of total credit) target which is a more reliable indicator?
 
Furthermore, what constitutes agriculture credit in India is also beyond international definitions. For priority sector credit purposes, the definition has been redrawn, including and excluding many manufacturing and service sector activities. Sadly, in the Reserve Bank of India’s fortnightly published data on deployment of credit, such nuances make no difference at all. In fact what constitutes agriculture credit needs a deeper look. Interest subsidy on short-term agriculture credit has simply vanished. Major users of such credit were farm mechanisation and irrigation activities. Tractor companies are paying discounts on cash purchases which discourage bank loans. Further, the farmer wants freedom to use his cash surpluses any which way he likes. Sadly, there is no attention from the National Bank for Agriculture and Rural Development or the Centre to reform this situation.
 
The only possible way to pump long-term funds in Indian agriculture is by financing rural housing by banks with long repayment periods. Previous data showed only four per cent of rural houses have institutional finance. This, in turn, requires proper maps and titles/ownership documents of household areas within lal dora demarcations so as to facilitate easy mortgage of rural properties by deposit of title deeds. We have not spared a glance for the residential areas of our 60 per cent rural population, which take away the liquid surplus of the farmers for real long-term uses, leaving nothing for health, education or social occasions. With five-year plans now part of history, the finance minister cannot see beyond his next Budget or elections. The title and contents of your related editorial on March 2, 2016, on the 2016-17 Budget (“Budget’s rural push will fail without capacity building”) are likely to echo for a long time to come.

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