Page 106 - economic review

AGRICULTURE AND ALLIED SECTORS78

happened after a drastic fall in the nineties when it fell from 16.1 per cent in 1992 to 13.9 per cent in
2000. Moreover, one more positive aspect is that the advances in agriculture have exceeded the
targets consistently for the last five years .

2.164 However, the definition of priority sector has undergone a significant change over the years by
including housing, education and export credit in addition to agriculture and micro& small enterprises.
Moreover, as per the recommendations of the committee constituted by RBI to reexamine existing
classification on Priority sector Lending (Chairman:Shri M.V. Nair) the RBI has revised the guidelines
for Prority sector Lending. Following important activities among others come under Priority sector as
per the revised guidelines: Loans to corporates including farmers’ producer companies of individual
farmers, partnership firms and co-operatives of farmers directly engaged in Agriculture and Allied
Activities, Loans up to ` 5 crore per borrower to dealers /sellers of fertilizers, pesticides, seeds,
cattle feed, poultry feed, agricultural implements and other inputs for agriculture and allied activities,
Loans for setting up of Agriclinics and Agribusiness Centres. Bank loans up to ` 5 crore per unit to
Micro and Small Enterprises engaged in providing or rendering of services and defined in terms of
investment in equipment under MSMED Act, 2006, loans to individuals for educational purposes
including vocational courses upto ` 10 lakh for studies in India and ` 20 lakh for studies abroad,
Loans to individuals up to ` 25 lakh in metropolitan centres with population above ten lakh and ` 15
lakh in other centres for purchase/construction of a dwelling unit per family, Loans for food and agro
processing units etc. However, it has to be ascertained whether this has led to the dilution of the
concept of priority sector by overestimating credit flows to actual agricultural operations and also,
whether the overachievement of targets in recent years is mainly due to the inclusion of the specific
items.

2.165 Meanwhile, though public sector banks within the commercial banks have succeeded in
achieving the target, private sector banks have failed to meet the same. Also, even though the guide-
lines does not stipulate any target for the cooperative banks, they too should be encouraged to spend
more on agriculture as its is they who cater to largely small and marginal farmers

Refinance Support by NABARD

2.166 In Kerala the total refinance disbursement from NABARD was `2460.31 crores during 2013-
14 as against ` 2744.38 crores in 2012-13. Commercial Banks accounted for the highest share of
60.25 percent in the total refinance disbursed in the state. This was followed by Kerala State Co-
operative Agricultural Rural Development Bank ` 778 crore (31.62 per cent) and RRBs (8.13 per
cent ). Agency wise and purpose wise disbursement of refinance assistance by NABARD in Kerala
is given in Appendix 2.79 and Appendix 2.80 & 2.81.

2.167 The purpose-wise analysis of the refinance by NABARD reveals that as against the previous
years, the major share of assistance was availed by non farm sector (71.48 per cent ) as against 48.1
per cent in 2012-13, followed by plantation and horticulture sector (15.18 ). Other major schemes
availed refinance support was minor irrigation, SHGs and land development, dairy Development etc.
The sectors like fisheries and poultry, which are very important in the rural economy of Kerala, were
neglected during 2013-14 from the disbursement of refinance by NABARD.

Rural Infrastructure Development Fund (RIDF)

2.168 The RIDF was set up in NABARD with contribution from the Commercial banks which were not
able to fulfill the commitment of channelising at least 18 per cent of their total lending to agriculture.
RIDF has been instrumental in strengthening the rural infrastructure in the State. From RIDF I to
XIX total sanction and disbursement stands ` 161359 crores and ` 123451 crore respectively as on
31-03-2014 in India.

Kerala State Planning Board