99
20% to 26% prevailed during the whole of the 1990s to 44% to 48% during the
latest six to seven years (Table 4.23). Year-after-year the RBI has been reporting
that the public sector banks, which are the mainstay of priority sector lendings,
have been fulfilling the 40% target except for a 0.4 percentage shortfall as on
the last Friday of March 2007 (RBI 2007, p.142). However, as stated above,
the target has been achieved because the ‘other priority sector’ advances now
constitute over 40% of the priority sector advances themselves as against
20% a decade ago; these obviously have been done at the cost of agriculture
and small-scale industries. It is thus shown that agricultural advances under
the priority sector of public sector banks have ranged from 14 to 16% of net
bank credit as per these reportings; they have never achieved the 18% target
(Table 4.24).
It is not our contention that the old definition and coverage of priority
sector deserve to be treated as immutable. It is just that the umbrella of credit
policy direction and targeting has to be used primarily for the weak and
disadvantaged sectors and sections of society whose investment and income-
earning activities are not overtly bankable and hence deserve the clutches in
the form of credit policy directives and targeting. The target had to be kept high
at 40% because the two largest sectors of the economy by employment and by
contribution to value of output, namely, agriculture and small-scale industries,
as also other informal sectors, are covered under the “priority sector”.
Table 4.23: Priority Sector Advances
(Rupees, crore)
Year
Agriculture % to
GNBC
SSI % to
GNBC
Others % to
GNBC
Total
Priority
Sector
% to
GNBC
Gross
Non-food
Bank
Credit
(GNBC)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
1990-91
16750
15.0
17181
15.4
8984
8.0
[20.9]
42915
38.4
111795
1999-00
44381
10.8
52814
12.9
34632
8.4
[26.3]
131827
32.1
410267
2000-01
51922
11.0
56002
11.9
46490
9.9
[30.1]
154414
32.8
471443
2001-02
60761
11.3
57199
10.7
57299
10.7
[32.7]
175259
32.7
535745
2002-03
73518
10.8
60394
8.9
77697
11.4
[36.7]
211609
31.1
679736
2003-04
90541
11.2
65855
8.2
107438
13.3
[40.7]
263834
32.8
804824
2004-05
125250
11.8
74588
7.0
181638
17.1
[47.6]
381476
36.0
1059308
2005-06
173972
11.9
91212
6.2
245554
16.7
[48.1]
510738
34.8
1466386
2006-07
230398
12.2
117880
6.3
285864
15.2
[45.1]
634142
33.6
1884669
2007-08
275343
11.9
132698
5.7
340032
14.7
[45.4]
748073
32.3
2317515
2008-09
338656
12.4
168997
6.2
424806
15.6
[45.6]
932459
34.2
2729338
2009-10
416133
13.0
206401
6.5
469645
14.7
[43.0] 1092179
34.2
3196299
2010-11
460333
11.9
229101
5.9
549952
14.2
[44.4] 1239386
32.0
3877800
2011-12
522623
11.5
259191
5.7
617286
13.6
[44.1] 1399100
30.9
4530548
Notes:
(i) Data are provisional and relate to select banks (47 banks for 2003-04 and 52 banks from 2004-05
onwards) which account for 90% of bank credit of all scheduled commercial banks
(ii) Figures within square brackets in col.8 are percentages to total "priority sector advances" in col.9.
Source:
RBI (2012):
Handbook of Statistics on the Indian Economy
, 20011-12 (website version)
