69
programme of doubling of bank credit for agricultural purposes. It is necessary
to emphasize that the quantum of agricultural credit shown under “priority
sectors” is not entirely coterminous with the quantum of agricultural credit
appearing here under the BSR reporting arrangements. All loans given to any
form of agricultural activity including animal husbandry and fishing is covered
under BSR as agricultural loans, whereas under priority sector definition,
certain parts of agricultural loans are excluded from agricultural loans. BSR,
on the other hand, does not include under “agriculture” loans given to even
indirect purposes such as financing of trading in inputs, biotechnology related
to agriculture and agricultural machinery items.
B. Doubling of Farm Credit and its Quality
Expansion of Indirect Lendings
The recent farm credit recovery, essentially under the influence of the
policy of doubling, has taken the character of forced pace of expansion and has
in turn resulted in some distinct unhealthy features which have deprived of
its quality, particularly as it forms part of the directed “priority sector” target.
This was in the first flush of banks’ enthusiasm but after 2006 or 2007, these
unhealthy features seem to have eased. First, a substantial part of the initial
increases had been in the form of indirect advances, that is, not to individuals
but to institutions and organisations serving the interests of the farm sector
indirectly. Earlier, in Table 4.7, the shares of indirect and the direct lendings
