91
amongst the six regions and higher than the national average (about 137%).
Amongst all regions, the eastern region, consisting of Bihar, Jharkhand, Orissa
and West Bengal, has the highest cropping intensity of 158% and has fairly high
share of 28-33% of GCA and GIA, gets only less than 8% of institutional credit;
as stated earlier the region is credited with a 24% of farmer households. At the
other extreme, the crop intensity is the poorest in the southern region and it
accounts for only 16 to 17% of GCA and GIA and yet it absorbs over 38% of
institutional credit in the county (Table 4.19).
Trends in Regional Shares in Agricultural Credit
The regional disparities in banking development are a part of the
country’s history, but what is disquieting is their persistence. Table 4.20
presents data on the region-wise distribution of agricultural credit and changes
therein over the past three decades or more. Such state-wise distributions
over the past four and a half decades are depicted in Annexure E. Two key
results stand out from these data. First, the proportions of agricultural credit
acquired by the relatively underdeveloped regions in the country - the eastern
and north-eastern regions - in all-India total, have persistently declined until
2009, but since then there have been some corrections as a result of the policy
thrust of “financial inclusion” (Part A of Table 4.21). Within the eastern region,
the states of Bihar and West Bengal have suffered, over a period, losses in their
shares of farm loans. Interestingly, while the western region has suffered a
similar loss in share, the central region has gained in such share. But what is
striking is that the southern region has retained the firm grip on its farm credit
share which has been the highest in the range of 33 to 36%; the region accounts
for only 18% of farm households in the country as cited earlier (Annexure E).
A marginal decline in the southern region’s share in farm credit from 36.3%
in March 1992 to 32.6% in March 2006 is accompanied by a sizeable increase
in the share of the northern region from 17.5% to 23.5% – a region which is
relatively well-developed (Part B of Table 4.20). While the agricultural sector of
the southern region marches forward in cornering high share of the country’s
farm credit, the northern region has faced an erosion as per data until March
2011.
Secondly, befitting the all-India trend, all regions except the central
have faced declining trends in the proportions of agricultural credit in their
respective regions’ total bank credit (Part B of Table 4.21). A major plausible
reason for the absence of any such declining trend in the share of agricultural
credit in total bank credit in the central region (consisting of Uttar Pradesh,
Madhya Pradesh, Chattisgarh and Uttaranchal) is probably the paucity of any
