Agricultural Credit (వ్యవసాయ పరపతి) in India part 8

 Okay, here are the key points from the Telugu video lecture on Agricultural Credit and NABARD, structured as notes:

Topic: Agricultural Credit (వ్యవసాయ పరపతి) in India

I. Recap of Previous Topic:

• Agricultural Price Policy (వ్యవసాయ ధరల విధానం) including:

  • Minimum Support Price (MSP - కనీస మద్దతు ధర)

  • Procurement Price (సేకరణ ధర)

  • Issue Price (జారీ ధర)

  • Administered Prices (పాలిత ధరలు)

II. Introduction to Agricultural Credit:

• Focus on the role of credit in the Indian agricultural sector.

• Introduction of NABARD (National Bank for Agriculture and Rural Development) and its significance.

III. Classification of Agricultural Loans based on Duration:

1. Short-Term Loans (స్వల్పకాలిక రుణాలు/పరపతి):

   • Duration: Typically 2 months to 15 months.

   • Purpose: Meeting immediate needs like purchasing seeds, fertilizers, pesticides, paying wages, fodder for cattle, and general crop cultivation expenses (Crop Loans - పంట రుణం).

   • Key Example: Crop Loan.

   • Note: Horticulture is generally not considered short-term.

2. Medium-Term Loans (మధ్యకాలిక రుణాలు/పరపతి):

   • Duration: 15 months to 5 years (or 60 months).

   • Purpose: Purchasing smaller farm implements (sprinklers, sprayers), buying livestock (cattle), land improvements, digging wells, horticulture development.

3. Long-Term Loans (దీర్ఘకాలిక రుణాలు/పరపతి):

   • Duration: 5 years to 15 years (or sometimes longer).

   • Purpose: Purchasing expensive machinery (tractors, harvesters), significant land development, purchasing additional land.

IV. Classification of Agricultural Credit based on Source:

1. Non-Institutional Credit (సంస్థాగతం కాని పరపతి):

   • Sources: Moneylenders (వడ్డీ వ్యాపారులు), landlords (భూస్వాములు), traders, commission agents, relatives, friends.

   • Characteristics: Informal, often high interest rates, historically dominant but share has decreased significantly.

2. Institutional Credit (సంస్థాగత పరపతి):

   • Sources: Formal financial institutions like Cooperative Banks (సహకార బ్యాంకులు), Regional Rural Banks (RRBs - ప్రాంతీయ గ్రామీణ బ్యాంకులు), Commercial Banks (వాణిజ్య బ్యాంకులు - Public & Private), Government agencies (Taccavi loans - historically).

   • Characteristics: Formal, regulated interest rates, share has increased significantly over time.

3. Historical Trends & Data (Approximate):

   • 1950-51: Non-Institutional Credit ~93%; Institutional Credit ~7%. (Moneylenders alone were ~70%).

   • 1995-96: Non-Institutional Credit ~25-30%; Institutional Credit ~70-75%. (Significant shift towards institutional sources).

   • Recent Trends (2022-23 Data approx): Commercial Banks are the largest source (~70%), followed by RRBs (~20%), Cooperative Banks (~7%), and Small Finance Banks (~3%). Note: RRBs have overtaken Cooperatives in share.

V. NABARD (National Bank for Agriculture and Rural Development):

1. Establishment: July 12, 1982.

2. Recommendation: Based on the B. Sivaraman Committee report (Committee constituted in 1979).

3. Full Form: National Bank for Agriculture and Rural Development.

4. Apex Body: Serves as the apex institution for rural credit in India.

5. Primary Objective: Rural Development (గ్రామీణాభివృద్ధి) - this includes agriculture but is broader.

6. Initial Capital: ₹100 Crore (Jointly funded 50:50 by RBI and Government of India).

7. Current Capital (as of March 31, 2022): ₹17,080 Crore.

8. Current Ownership: 100% owned by the Government of India (RBI stake divested).

9. Role:

   • Provides refinance facilities to institutions lending for agriculture and rural development (like RRBs, Cooperatives, Commercial Banks).

   • Does not provide direct loans to farmers.

   • Supervises and regulates Regional Rural Banks (RRBs) and Cooperative Banks (under Banking Regulation Act, 1949, Sec 35(6)).

   • Promotes institutional development for rural credit.

   • Supports various development initiatives.

VI. Key Schemes & Concepts Related to Agricultural Credit:

1. Kisan Credit Card (KCC - కిసాన్ క్రెడిట్ కార్డ్):

   • Launched: 1998 (Recommended by R.V. Gupta Committee).

   • Purpose: Provide timely and adequate credit to farmers in a hassle-free manner. Covers cultivation needs, post-harvest expenses, consumption needs.

   • Recent Expansions: Extended to Animal Husbandry and Fisheries sectors.

   • Recent Initiatives: KCC Saturation Drive (under Atmanirbhar Bharat), Kisan Bhagidhari Prathmikta Hamari campaign.

2. Interest Subvention Scheme:

   • Government provides interest subsidy on short-term crop loans (usually up to ₹3 Lakh) to make credit cheaper for farmers.

   • Standard Rate: Usually around 7%.

   • Subvention: Centre provides a certain percentage (e.g., 1.5% or 3%), making the effective rate lower.

   • Prompt Repayment Incentive: Additional subvention (e.g., 3%) for farmers who repay on time, often bringing the effective rate down to 4%.

   • State governments may provide additional subvention.

   • Recent Changes (2022-24): Mentioned Centre's subvention changes and specific focus on KCC.

3. Other NABARD supported Funds/Programs:

   • Producer Organization Development Fund (PODF).

   • Agricultural Marketing Infrastructure Development Fund (AMIDF).

   • Watershed Development Program (funding long-term loans for irrigation projects).

   • Tribal Development Program (supporting horticulture etc. in tribal areas).

4. Taccavi Loans: Direct government loans to farmers, largely discontinued after 2007-08, replaced by institutional finance focus (Multi-Agency Approach - MAA).

VII. Target & Achievement (Agricultural Credit Flow):

• 2020-21 Target: ₹15 Lakh Crore; Achieved: ₹15.75 Lakh Crore.

• 2022-23 Target: ₹18.5 Lakh Crore; Achieved: ₹20 Lakh Crore (by Dec 2023).

• 2024-25 Target (Interim Budget): ₹22 Lakh Crore (aiming for ₹22-24 L Cr range).