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Our Bureau

Focus on manufacturing sector leading to distress migration of rural poor

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Pune Jan. 23 Mr Prabhakar Karandikar, Divisional Commissioner, Government of Maharashtra, has stressed the need for removal of regional imbalances in credit dispensation. Addressing the State Credit Seminar organised by the National Bank for Agriculture and Rural Development (Nabard) here on Tuesday, he said banks should ensure that uniform attention is given for growth and development of all regions by financing all the potential activities.

He also pointed out that micro irrigation and wasteland development programmes should be thrust areas keeping in view the State's agro climatic situation. The urban-rural divide is widening mainly due to focus on service and manufacturing sectors. "It is leading to distress migration and shifting of rural poverty to urban areas and can be addressed only when agriculture is made a commercial proposition," he said.

The State Focus Paper, which was also tabled today, noted that the aggregate potential for 2007-08 for all districts amounted to Rs 20,972 crore, about 27 per cent higher than the credit potentials estimated for the previous year. Out of the above potential, the paper noted that Rs 10,381 crore was towards short-term crop production loans; Rs 4,606 crore towards investment credit for agriculture and allied activities, including agro-processing activities; Rs 2,107 crore for non-farm activities and Rs 4,312 crore towards other priority sector activities.

To tap this potential, concerted efforts need to be put in not only by banks but also by the Government departments and others concerned. It noted that there has been a considerable gap in the potential linked credit plans and the achievements under the service area credit plans. It also pointed out that food security continued to be a matter of concern.

Mr Ratnakar Gaikwad, Director General, Yashwantrao Chavan Academy of Development Administration (Yashada), noted that mere achievement of credit target would not be sufficient. He was of the view that still large number of farmers/rural entrepreneurs were not getting adequate support from the financial institutions and were resorting to borrowing from local money lenders. He, therefore, stressed the need for banks to cover these people .

Low yield

Mr H.R. Khan, Principal, College of Agriculture Banking, Reserve Bank of India, said that productivity of farms in Maharashtra was quite low when compared to some of the neighbouring States with similar agro-climatic condition.

"This is due to inadequate financial support to the farmers for their farming activities despite instructions from RBI/Nabard for adoption of flexible approach for sanctioning crop loans to farmers,'' he added.

He also pointed out that technological upgradation in farming practices is not factored in while determining the scales of finance in case of those farmers who are cultivating crops adopting scientific methods. According to him, there should be convergence of efforts of banks and government agencies, conducive policy environment and commitment to the cause for enhanced flow of ground level credit in the State.

New initiatives

Mr N. Srinivasan, Chief General Manager, Nabard, said the banking sector had to take up new initiatives and innovate products for financial inclusion. He noted that there was considerable expansion of agricultural credit made by the banking system and the State was poised to achieve doubling of credit.

He said the irrigation infrastructure needed attention from the State and last mile problems of setting up a distribution network had rendered the projects non-performing.

More Stories on : Credit Market | Agricultural Institutions | Maharashtra

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