218
The above improvement in private capital formation in agriculture
seems to have been supported by increased institutional credit flow (Table
8.5). Over the latest two decades for which turn loans from GLC are related
to private capital formation in nominal numbers, there has been a zig-zag
movement in the relevant ratio. In the initial period between 1992-93 to 1995-
96 term credit flow as percentage of private investment in agriculture registered
a smart recovery from 33.2% to 51.4%. This rise, however, appears statistical,
in that there was a steep decline in private investment during 1993-94 to 1995-
96 when turn credit for the sector continued to rise and hence the credit to
investment registered a jump.
The period after 1995-96 shows an interesting trend. Private investment
as percentage of GDP, it may be recalled [see earlier Table 2.9(a)] began to
register a steady improvement. But, following the full-fledged implementation
of banking reforms, the share of agricultural credit in total bank credit had
drastically fallen from the peak of near 18% towards the second half of the
1980s to around 9% to 10% in March 2002 (see earlier Table 4.5). As a
consequence, the ratio of term credit to private farm investment dipped for the
next six years from 51.4% in 1995-96 to 42.4% in 2002-03.
Table 8.5: Share of Term Loans (GLC) in Private Capital Formation
in at Current Prices
(Rupees, Crore)
Year
Private Sector Capital Formation
For Agriculture and Allied
Activities (
`
)
Term Credit
From All Institutions
(
`
)
Term Credit as%
of Private Sector GCF
(
`
)
(1)
(2)
(3)
(5)
1992-93
15,307
5,078
33.2
1993-94
13,512
5,223
38.7
1994-95
13,284
6,841
51.5
1995-96
14,601
7,507
51.4
1996-97
18,521
9,413
50.8
1997-98
23,024
11,316
49.1
1998-99
28,100
12,957
46.1
1999-00
46,137
17,303
37.5
2000-01
43,697
19,513
44.7
2001-02
60,279
21,536
35.7
2002-03
56,525
23,974
42.4
2003-04
52,988
32,004
60.4
2004-05
58,498
49,247
84.2
2005-06
66,922
75,136
112.3
2006-07
72,570
90,945
125.3
2007-08
91,094
73,265
80.4
2008-09
127,816
91,447
71.5
2009-10
142,966
107,858
75.4
2010-11
148,591
132,741
89.3
2011-12
-
114,871
-
Source:
Same as in Table 8.4
