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significant economic diversification within the region; as shown later, the share
of services sectors in state domestic product remain low in this region. The
southern region, which has a well-spread banking network and which also
enjoys a relatively better diversified economic structure, presents a picture of
much steeper decline in its share of agricultural credit in total bank credit.
The southern states have all experienced this phenomenon up to March 2004
but after the policy of doubling began, the agricultural share in total credit has
increased. Interestingly, the central region states of Uttar Pradesh and Madhya
Pradesh have shown a contrary picture with their farm credit shares declining
after 2004 (Annexure E). The latter are the states which have shown relatively
poorer agricultural growth; they have also diversified less. In the eastern
region, West Bengal had shown some decline in agricultural share until 2004
but experienced an improvement thereafter like the all-India picture. Bihar did
not experience any such fall reflecting the same feature of poor diversification,
but after 2004, there has been a substantial increase in its agricultural share
in total credit possibly reflecting an improvement in its output performance.
A third and final interesting revelation regarding inter-state disparities is
brought out in the same Table 4.21. In the state-wise distribution of agricultural
loan accounts in total all-India agricultural loan accounts, the four southern
states have experienced steady improvement between the mid-1990s and now.
The northern states of Haryana, Punjab, and Rajashtan stood their ground
until 2004 but lost some thereafter. An underdeveloped state to show still better
improvement is Uttar Pradesh; its share in farm loan accounts increased from
13% in the mid-1990s to 15 to 16% until March 2007; thereafter there has
been a fall. In contrast, laggards in this respect are Gujarat and Maharashtra
in the western region and Bihar, West Bengal and Orissa in the eastern region –
all have experienced loses in their shares of all-India agricultural loan accounts
(Table 4.21).
The above trends in the state-wise distribution of agricultural loan
accounts broadly hold true also for the corresponding distributionof agricultural
loan amounts outstandings. However, there is a major qualitative difference
between the two distributions. First, the percentage shares in loan amounts in
underdeveloped states like Bihar and UP are considerably smaller than their
relative shares in loan accounts, implying that they obviously absorb lower
average size per loan account; the opposite is true of Maharashtra, Punjab and
Haryana, while the shares of loan amounts far exceed percentage shares in
loan accounts. Secondly, the southern states of Andhra Pradesh, Tamil Nadu
and Kerala which have enjoyed a growing share in agricultural loan accounts,
have not benefited from similar increases in loan amount share until 2009;
thereafter there have been some noticeable increases in Maharashtra, which
