Staff Reporter

Government stresses the need for more credit flow to agriculture

  • Advances by banks during 2006-07 under priority sector expected to be Rs.24,212 crore
  • Chief Secretary says efforts should be made to create models for increasing productivity

    THIRUVANANTHAPURAM: The State Focus Paper for 2007-08 prepared by NABARD projects a quantum jump in credit flow for the year 2007-08 under priority sector to an aggregate level of Rs. 31,691 crore comprising agriculture and allied activities (Rs.11762 crore), non farm sector and agro-processing (Rs.4895 crore) and services sector (Rs.15,034 crore). The ground level credit flow by banks in Kerala during the current year (2006-07) under priority sector is expected to be Rs. 24,212 crore.

    These figures were released at a State credit seminar organised by the NABARD here on Thursday. Chief Secretary Lissie Jacob, who inaugurated it, emphasised the need for more credit flow towards agriculture and allied sector, for which 37 per cent investments was projected in the State Focus Paper. This sector was most important as it affected the largest number of people in the State. The focus of collective efforts of the Government and bankers should be on increasing the productivity for which higher levels of knowledge inputs needed to be canalised. Efforts should be made to create models for increasing productivity and to replicate these models in large numbers and to make cultivation commercially attractive for small farmers.

    Leveraging resources

    The whole business of investment was about leveraging resources of the entrepreneur and of the Government by creating multiplier effects.

    The RIDE of NABARD highly leveraged Government's limited resources for rural sector infrastructure creation and development.

    The Government machinery should pay greater attention to project preparation, timely disbursements of funds. In short, the overall efficiency of implementation mechanism was the key. There was a lot of room for improvement in this sector.

    The rural non-farm sector was an important area considering Kerala's traditional industries such as handloom, handicrafts and coir.

    They held great potential for growth if these sectors could be linked with the changing world trade scenario. Efforts would be needed for creating strong institutional leaderships, which could drive the manifold components such as design innovation, production oriented to the market, sharpening traditional skills. The Chief Secretary expressed the view that the potential for growth was great and a world of opportunities was unfolding itself before the present generation. The State had the basic strengths and capability for innovation.

    Credit plans

    Earlier, B.S. Shekhawat, Chief General Manager, Kerala RO welcomed the Chief Secretary, the Regional Director, RBI, Secretaries from the State Government and senior officers of the bank. He explained that NABARD had prepared district specific `potential linked credit plans' for Kerala for the year 2007-08, a result of the year long exercise by NABARD's district development managers to assess the exploitable potential in each district. These were aggregated, sector-wise, at State-level. The seminar was organised for the State Government and bankers to discuss the credit potential as mapped in these district plans, the constraints in implementation, and the support required from the state government and banks.

    The State Credit Seminar identified infrastructural development, agriculture and allied activities, housing tourism, information technology, SSI, micro enterprises, agro and good processing sector as the vibrant sectors of Kerala economy. During the seminar, NABARD officers made detailed presentation on minor irrigation, plantation horticulture, animal husbandry, fisheries, rural infrastructure, non-farm sector activates, micro finance and agro food processing sector. Special focus is given on `agro and good processing sector' in the State focus paper with an estimated credit potential of Rs.2,322 crore.

    The presentations were made to analyse the detail of the sector-wise status, development potential gap in infrastructure and focus of the areas where action was required by government banks and planners.

    Detailed discussions were held on GoI and NABARD's ongoing initiatives such as formulation of watershed development projects and other programmes in the three distressed districts of Kasaragod, Wayanad and Palakkad.