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A closer examination of the coverage of the above two sets of data and
the definitional differences between them raise a few interesting questions.
Key coverage and definitional differences boil down to the following. First,
while the BSR data cover all agricultural accounts irrespective of the size of
loan for direct advances, those under the priority sector have some size limits.
For instance,
control returns
cover agricultural advances under the “priority
sector” which by definition should normally exclude many big-size advances
given against agricultural operations (such as loans beyond
`
10 lakh against
pledge/hypothecation of agricultural produce, and loans for input distribution
for allied activities beyond
`
40 lakh shown as indirect finance), whereas the
BSR data include all agricultural advances. Likewise, finance provided to
corporates, partnership firms and other institutions for agriculture and allied
actions for an aggregate amount up to
`
one crore or one-third of loans in
excess of
`
one crore, are only taken into account as part of direct agriculture
advance under the “priority sector”, whereas the BSR data do not make any
such distinction based on size. This classification difference
ipso facto
should
make the BSR data appear to be more than the priority sector data insofar as
agriculture credit figures are concerned.
On the other hand, there is a contrary issue insofar as the indirect
agricultural advances are concerned. While the BSR data specifically excludes
from agricultural loans, for instance, loans given for the distribution of
fertilizers, seeds and other inputs as well as farm machinery at the retail as
well as wholesale level and covers them under “Trading” activities, whereas the
‘priority sector’ advances cover credit for purchase and distribution of various
inputs for agriculture as well as allied activities under “indirect finance” for
agriculture. “Trading” under BSR is an independent occupation category
and it is not covered even as “indirect” agricultural credit; these are covered
under wholesale and retail trade codes 51403 and 52301 [BSR’s
Handbook of
Instructions
, March 2008, pp.65-66].
Another reason for the difference could be the treatment of loan accounts.
While the BSR data treat loan accounts separately depending upon the nature
of accounts (crop loans or terms loans), for priority sector purposes, it appears
that a single agricultural borrower is treated as having one agricultural loan
account irrespective of difficult types of loan accounts he/she may enjoy.
The differences in the above two sets of data do not seem to be falling
in line with their definitional differences enumerated above. Briefly, these
differences are (i) first, the numbers of loans accounts have consistently
remained higher in BSR data as compared with the numbers of farm loan
