Letter to BS: Multiplicity of institutions do more harm to farm sector

Uniform budgetary target for different institutions is a must to ensure coordinated functioning

This refers to “Misuse of agricultural credit” (September 19). It has been rightly pointed out that there is disproportional disbursement of rural credit far in excess with their actual output. The basic flaw in agricultural and allied credit is the multiplicity of institutions playing various roles without any coordination. Banks disburse credit purely from the financial angle to meet priority sector norms -- that is, target-oriented financial lending. Their approach to rural finance is safety-oriented and directed towards credit recovery to prevent NPAs (non-performing assets) and ultimate accountability of the disbursing official. The seasonal requirements under agriculture including