The state level bankers? committee (SLBC) in Andhra Pradesh has projected a higher credit plan of Rs 47,000 crore during fiscal 2008-09, against projections made by the National Bank for Agriculture and Rural Development (Nabard) of Rs 42,460 crore for the period. For the year 2007-08, SLBC had projected a credit plan of Rs 42,000 crore.
Giving higher priority to agricultural credit, the banks projected Rs 20,000 crore towards crop loans and Rs 6,000 crore towards agriculture crop loans. Small industry and other priority sectors get Rs 7,000 crore and Rs 14,000 crore, respectively. Thus, agriculture has got a major share in the overall credit, with a 12% increase over the last year.
According to the credit plan, the banks will give greater thrust to micro-irrigation (Rs 611 crore), farm mechanisation (Rs 886 crore), horticulture (Rs 489 crore) and dairy development (Rs 1,677 crore).
Interestingly, banking sources said banks were more willing to extend loans to farmers in the state, since the recovery rate was on par with self-help groups. Also, AP will get about 22% of the total agri debt relief scheme announced by the government. ?While AP constitutes 10% of the total farmers in the country, it will get Rs 22% of the total debt relief i.e., Rs 12,500 crore,? a senior banker told FE. This has made the bankers concentrate more on credit to the farm sector. For instance, banks disbursed crop loans to 4,54,250 new farmers during 2007-08 worth Rs 996.45 crore, against 4,31,800 in the previous year.
For the current year, 2008-09, the government proposes to cover five lakh new farmers additionally, besides five lakh tenant farmers.
This apart, the bankers also expressed their happiness over the state government?s interest subsidy scheme of 4%, which is aimed at inculcating financial discipline among the small farmers. ?We have created a budget provision of Rs 300 crore towards the interest subsidy scheme and the government is committed to increase this, if required,? said chief minister YS Rajasekhara Reddy, while thanking banks for increasing farm credit.
However, in the same breath, Reddy criticised bankers for low enthusiasm towards education loans. ?I have reports that most of the eligible students pursuing professional courses are not able to get bank loans. The banks have to change their attitude towards the students. Every eligible student must be given loans,? Reddy said. He said education loans should not be treated as loans but as investment for the future.
While about Rs 3,063 crore was outstanding as on March 2008, the banks have disbursed about Rs 946 crore during 2007-08. For 2008-09, banks are projecting Rs 1,013 crore towards education loans. However, Reddy wanted the banks to give education loans to every eligible candidate without putting a cap on total disbursements.