130
However, the only silver-lining in this respect has been that the data
show that after March 2000, there has been an improvement in C-D ratios of
backward regions, particularly in terms of
utilisation
. It should be recognised
that even this has occurred when there has been a sizeable improvement in
the overall C-D ratio at the all-India level due to sharp reductions in cash
reserve and statutory reserve rations and due to vast increases in personal
loans and other retail sector credit (EPWRF 2006); it is only in the recent
period agricultural loans may have played a role.
It may be argued that credit absorptive capacities of backward states
and regions may have eroded during the decade of the 1990s, but as is shown
in a subsequent section, this is only partially true; the supply of credit has
been found to have fallen behind the demand for it rather significantly. Also,
even after taking into account the
utilization
of credit, the C-D ratios of
underdeveloped regions are far below 60%, thus suggesting that substantial
proportions of deposits in these regions are being used elsewhere. Generation
of deposits could also be considered as a measure of economic potential for
bank lendings.
Inter-district Disparities in Bank Credit - Initial Improvement and
Subsequent Setback
Inter-regional and inter-state disparities are better reflected when we
disaggregate the banking data into district level positions; such desegregation
throws up the presence of vast intra-state disparities
The improvement in banking development in the post-nationalisation
period was reflected in a large number of districts sporting noticeably higher
growth in bank deposits, higher credit growth and improved C-D ratios.
Number of districts enjoying C-D ratios of 60% and above shot up from 136
in March 1980 to 209 in March 1985; thereafter they remained in the range of
177-163 until March 1992. In the 1990s, this improvement was arrested with
the number of districts having 60% C-D ratio at the all-India level dwindled to
as low as 110 in March 2004. However, in the second half of the last decade,
particularly after 2005, the number of districts with 60% C-D ratio has begun
to improve; it has risen from 110 in March 2004 to 210 in March 2011. Such
improvement took place in rural centres of districts too (See Annexure G).
But, as in the case of other banking indicators cited earlier, a large
number of districts began to experience in the 1990s reductions in credit
delivery in relation to deposits that they generated. At one extreme, in March
1990 or even up to March 1992, there were just about 20-28 districts (out of
