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Also, in respect of these underbanked regions, corrections to the credit
distribution have hardly taken place over time, not even in the current period
of implementing the credit doubling policy in the hands of public sector banks.
The relative share of the eastern region was 6.9% in 2002-03, 6.7% in 2003-
04 and it edged up to 7.0% in 2004-05, while in the case of the central region,
the comparable ratios were 15.5%, 15.8% and 17.3%. No doubt, the shares of
southern states in farm credit, which have been the highest amongst all regions,
have been on the decline in the process of correcting regional imbalances (from
43.5% in 1999-2000 to 37.8% in 2004-05). But, interestingly these losses in the
share of the southern region have hardly moved in favour of the underdeveloped
regions like the eastern and central regions. Instead, the southern region’s
losses in credit share have been accompanied by steady increases in the shares
of the northern region, which is generally well-developed and which is already
enjoying relatively high proportion of bank credit. The northern region’s share
has gone up from 22.5% in 1999-2000 to 26.8% in 2004-05. Amongst the
relatively advanced regions, the public sector bank credit share of the western
region consisting of Maharashtra and Gujarat as major states has suffered
a steady fall from 14.1% in 1999-2000 to 10.7% in 2004-05. Impliedly, the
benefits of this correction have also accrued to the northern region. As Delhi
seems to have acquired these benefits, the chances are that the bulk of the
credit disbursements may have been in the form of indirect lendings.
The above special tabulation data are available only up to 2004-05. For
the period thereafter, we have some useful inferences from the overall picture
of farm credit flow for all agencies together, as depicted and reviewed earlier
in Annexure P. As per these data, the share of the central region in total GLC,
which was around 16% until 2004-05, has steadily slipped to 12.1% in 2010-
11. Likewise, the share of the eastern region, which stood at around 6.7%
until 2004-05, fluctuated somewhat thereafter but remained at 6.7% in 2009-
10 and edged up to 7.4% in 2010-11. In respect of the southern region, on
the other hand, its share, which had fallen to 34.1% in 2004-05, increased
thereafter to 37.3% in 2008-09, only to fall back to 34% -35% in the next two
years. Because of the dominance of public sector banks in the total credit flow,
it can be inferred that the above overall trend in not improving the regional
disparities may have been contributed by the very public sector banks.
Private sector banks
It is also significant that the performance of public sector banks in
regional distribution of farm credit disbursements is hardly better than that of
private sector banks.
