With the aim of doubling farmers’ income by 2022, the government is likely to raise farm credit target to about ₹19 lakh crore in Budget 2021-22 to be presented on February 1, according to sources. For the current fiscal, the government has set a farm credit target of ₹15 lakh crore.
The government has been raising credit target for the farm sector every year and this time too, the target is likely to be increased to around ₹19 lakh crore for 2021-22, sources said.
“Non-banking finance companies (NBFCs) and co-operatives are active in the agriculture credit space. The Nabard refinance scheme will be further expanded. Agriculture credit target for the year 2020-21 has been set up at Rs ₹lakh crore,” Finance Minister Nirmala Sitharaman had said while presenting Budget 2020-21.
The agricultural credit flow has increased consistently over the years, exceeding the target set for each fiscal. For instance, credit worth ₹11.68 lakh crore was given to farmers in 2017-18, higher than the ₹10 lakh crore target set for that year, they added. Similarly, crop loans worth ₹10.66 lakh crore were disbursed in 2016-17, higher than the credit target of ₹9 lakh crore.
Credit is a critical input in achieving higher farm output. Institutional credit will also help delink farmers from non-institutional sources where they are compelled to borrow at usurious rates of interest, sources said.
