153
inclusive of indirect lendings which constitute a part of the total ground-level
disbursements given in Table 5.6, we present in the same Table 5.8 the data
provided to us by the RBI on total disbursements by public sector banks
(Column 7). The Vyas Advisory Committee report has clearly spelt out that
the data in Table 5.8 represent credit to agriculture under SCAP disbursed
by public sector banks, which conforms to the data given by the RBI also for
public sector banks, as inclusive of indirect lendings. As NABARD has spelt out
in its publications, the ground-level flows include RIDF deposits of scheduled
commercial banks attributable to their shortfall in priority sector targets for
agricultural credit; by definition these are part of indirect lendings. On the
other hand, available data also suggest that the data on disbursements of farm
credit by cooperatives and RRBs do not include indirect lendings. Besides,
we have evidence that the quantum of indirect lendings of commercial banks
have grown to very high levels in recent years after 2003-04 – all of which
are apparently included in the officially-reported ground-level disbursements.
Between 2003-04 and 2009-10, indirect lendings of public sector banks have
galloped from
`
8,936 crore to
`
82,839 crore; as a ratio of total credit, such
indirect lendings of commercial banks has shot up from 17.1% to 28.4% during
the same period.
Any attempt to cleaning up of the NABARD data faces a serious problem
of non-availability of details. Hence, we have not made any adjustments for
the inconsistencies in the data series of ground-level credit flows. As data for
cooperatives in this set do not cover indirect advances (see earlier Table 5.4),
the kink in the series of indirect advances of cooperative banks reported earlier
does not affect the ground-level flow series. Taking these issues into account,
the subsequent review is based on the NABARD’s data on ground-level flows as
they appear in its official publications.
Crop loans Vs Term loans
The RBI’s
Expert Group on Investment Credit
(May 2005), reviewing
the trends in agricultural credit, had said that both term credit and short-term
credit were growing at the same pace. To quote the report:
“During the period 1995-96 to 2002-03, short-term credit increased
at a compound growth rate of 18.1% term credit and short-term credit
both increased at more or less the same pace of 18%. The share of
short-term credit in total credit has been hovering around 65%, the
balance being accounted for by term credit. The term credit which
facilitates investment in agriculture, seems to have been declining in its
importance particularly after 2000-01, as indicated by the year-to-year
growth rates” (ibid, p.30).
