National Bank for Agriculture and Rural Development has estimated a credit flow potential of Rs. 31,254.74 crore under priority sector in Karnataka for 2010 -11, an increase of 13.5 per cent over the previous year.

The share of crop loan formed 45.6 per cent of the total potential estimated, followed by other priority sector at 28.5 per cent, agricultural term loan at 14.9 per cent and non-farm sector at 11 per cent, a State credit seminar was informed on Wednesday.

The seminar is a forum consisting of state government departments, banks and other development agencies, to discuss the NABARD-prepared State Focus Paper (SFP) that contains the aggregation of exploitable potential, estimated for all districts of the State for the coming year.

NABARD Chairman Umesh Chandra Sarangi, however, said there is a need to enhance the potential of agricultural term loan by Rs 2,000 crore (from the projected Rs 4,667 crore or 14.9 per cent) and the total to Rs 37,000 crore, from Rs 31,254.74 crore.

Additional Chief Secretary and Finance Secretary M. R. Srinivasamurthy said the potential estimated for the agricultural term loan is rather inadequate to stimulate growth in the sector and sought it to be raised to at least Rs 7,000 crore-Rs 8,000 crore.

“We need to increase capital formation in agriculture sector”, Mr. Srinivasamurthy said.

Growth in the agriculture sector in Karnataka in the 10th plan is just two per cent on an average, Mr. Srinivasamurthy said, adding, the Government is focusing to step up ground water recharge, drip irrigation, and use of bore-wells and wells for irrigation purposes.

Karnataka’s gross state domestic product is Rs.2,80,000 crore with agriculture accounting for around Rs. 50,000 crore, he said.

He pointed out that though Gujarat is not a predominantly irrigated state, it has achieved on an average ten per cent growth in agriculture sector in the past ten years, with output being particularly high in dry areas of Saurashtra and Kutch.

Gujarat has laid stress on water harvesting structures and built two lakh check-dams, including 1.6 lakh by non-governmental organisations, in the last decade, he said.

Chief Secretary S.V. Ranganath said Karnataka’s average GDP growth in the 10th plan (7.2 per cent) is lower than the national average, only because of its poor performance in the agriculture sector.

Karnataka would aim for 4-5 per cent growth in the agriculture sector in the current plan. “Karnataka is performing below its potential in agriculture”.