The Relationship between Credit Availability and Agricultural Growth in India


The Relationship between Credit Availability and Agricultural Growth in India!

Almost 60% of the labour power in India is associated with cultivation. A large number of Indian farmers are labour intensive. In such condition, farmers should be made able to invest on cultivation, land reforms and increase in produce by providing loan. In India, non-governmental businessmen, commercial banks etc. are providing loans to the farmers.

Data tell us that the users of loan in the states of Punjab, Haryana, Andhra Pradesh, Maharashtra etc. are really increasing their production. On the other hand, loans have been used less in the Eastern states like Uttarakhand, Jharkhand, Odisha etc. As a result, crop production is also less in these states.


In India, during green revolution, agricultural loans were given importance. During 2005-2006 in agricultural sector,? 117899 crore loans were made available. In last 40 years, the right use of agricultural loan made it possible to produce crops three times more.

Here, emphasis should be given on the right use of loan and precautions should be taken so that incidents like suicides by the farmers on the spoiling of their crops or incidents like not being able to gain properly by the production and moneylessness do not repeat.

The provisions for the reforms regarding the agricultural loan have been made keeping in view that many marginal farmers do not get enough loan and many organizational activities are also not efficient. In such conditions, agricultural loan cannot play its role accordingly in increasing agricultural production. The reconstruction of the village economies is important. In this way, in India getting agricultural loan and increasing agricultural production have been developing.

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