A Credible Blueprint For Agriculture Credit

If implemented well, the roadmap traced by the RBI’s Internal Working Group can significantly boost farm incomes.

- S ADIKESAVAN

In these difficult times for the national economy, it pays to have a little bit of optimism similar to the outlook of the late Swedish statistician and physician Hans Rosling, who wrote in his bestseller Factfulness about “Ten reasons we’re wrong about the world and why things are better than you think”.

Last Friday’s report of the Internal Working Group (IWG) of the RBI on agriculture credit, headed by its Deputy Governor MK Jain and pivoted by Ashok Gulati, is remarkable for its data aggregation on the work done so far, which then provides the optimistic backdrop for a blueprint for immediate action.

If taken up in earnest by all stakeholders, like the governments at the Centre and the States, this plan can give a booster dose to incomes in the rural sector in general, with a focus on agriculture and allied activities.

The various initiatives taken over the years at the national level has led to a spectacular increase in the credit support for agriculture. Credit to agriculture, which was just about 20 per cent of the sectoral GDP in the 1990s (reform years), has grown to 51 per cent in 2018. In the last five years, coinciding with Modi 1.0, the jump was about 10 per cent! This is a pleasant revelation as far as credit reach in quantitative terms are concerned.

Game-changers

What then are the issues to be tackled in this crucial segment, which impinges upon the livelihood of half our working population? To my mind, four broad themes emerge from the report which if tackled properly, will be a game-changer for this sector.