Growth and performance of Kisan Credit Card Scheme in India with special reference to Karnataka
The credit is the life blood of agriculture and which was disbursed through KCC Scheme in our country. The number of KCC issued and amount sanctioned in India, Karnataka, North-East Karnataka region and Bellary district was estimated using the compound growth rate analysis. The necessary secondary data about KCC scheme for India were collected from RBI publications since inception of the scheme. The same data for Karnataka, North East Karnataka region and Bellary district were collected for the period 2006-07 to 2011-12. The collected were pertaining to three formal agencies viz., commercial bank, RRBs and co-operatives. At national level, the commercial banks have issued the highest number of KCCs amongst the three formal financial agencies. The commercial banks issued highest KCCs (45.33%) followed by co-operative banks (40.30%) and minimum issued by RRBs (14.37%). The similar pattern was observed for Karnataka state and Bellary district. Whereas in North-East Karnataka region, the highest number of KCCs was issued by RRBs. The highest percent of operational holding covered by KCC was in case of North-East Karnataka region (610.09%) followed by Karnataka (391.82%) and Bellary district (332.87%).
Financial Innovation in Indian Agricultural Credit Market: Progress and Performance of Kisan Credit Card
Credit is one of the critical inputs in agriculture and an effective means of rural development in India. The institutional credit delivery system for agriculture was started in the country with the setting up of co-operative credit societies in 1904, but the coverage of these societies towards meeting the credit requirement of farmers was limited. Therefore, the farming community had to depend on informal money-lending sources for its entire credit requirement. The recommendations of All India Rural Credit Survey Committee in fact laid the foundations of institutional mechanism for establishing a sound credit delivery system in the country for financing agriculture and allied activities. A large number of agencies, including co-operative banks, Regional Rural Banks (RRBs), commercial banks, non-banking financial institutions, micro financial institutions and Self-Help Groups together constitute the Indian institutional rural credit delivery system. One of the objectives of the credit policy is to minimise the role of money lenders in the flow of agricultural credit. Several initiatives have been taken in this direction and the major milestones in rural credit flow are: acceptance of the Report of Rural Credit Survey Committee (1954), nationalisation of major commercial banks (1969 and 1980), opening of Regional Rural Banks (RRBs) in 1975, and establishment of National Bank for Agriculture and Rural Development (NABARD) in 1982 and introduction of the on-going reforms in the financial sector since 1991. Simultaneously, several other measures like launching of Lead Bank Scheme, directed lending for the priority sectors, linkage of banking sector with the government sponsored programmes targeted at the poor, Differential Rate of Interest Scheme, Service Area Approach, SHG-Bank linkage programme, etc. were also undertaken. In recent years, initiatives like Kisan Credit Card Scheme (KCCs), special Agricultural Credit Plans, and Rural Infrastructure Development Fund (RIDF)
Performance of rural credit and factors affecting the choice of credit sources
Credit is not only one of the critical inputs in agriculture but is also an effective means of rural development. A large number of agencies, including co-operatives, regional rural banks (RRBs), commercial banks, non-banking financial institutions, self-help groups (SHGs) and a well-spread informal credit outlets together constitute the Indian rural credit delivery system. One of the objectives of the credit policy is to minimise the role of non-institutional sources, mainly the money-lenders in the flow of agricultural credit. Several initiatives have been taken in this regard since Independence. Some major milestones in rural credit are the acceptance of Rural Credit Survey Committee Report (1954), nationalisation of major commercial banks (1969 and 1980), establishment of RRBs (1975), establishment of National Bank for Agriculture and Rural Development (NABARD) (1982) and the ongoing reforms in the financial sector since 1991 (Vyas et al., 2004). Simultaneously, several measures like establishment of Lead Bank Scheme, direct lending for the priority sectors, banking sector’s linkage with the Government sponsored programmes targeted at the poor, Differential Rate of Interest Scheme, the Service Area Approach, the SHGBank linkage programme were undertaken. In recent years, initiatives like Kisan Credit Card Scheme (KCCs), Special Agricultural Credit Plans, and RIDF schemes have been introduced to enhance the flow of credit to the rural sector. Several committees have been constituted to suggest ways to increase the availability of institutional credit to the rural areas. These include the Expert Committee on Rural Credit (Chairperson V.S. Vyas), Committee on Agricultural Credit through Commercial Banks (Chairperson R.V. Gupta), Committee on Co-operatives (Chairperson Vikhe Patil), Advisory Committee on Flow of Credit to Agriculture (Chairperson V.S. Vyas), and Task Force on Revival of Co-operative Credit Institutions (Chairperson A. Vaidyanathan). The government has accepted and implemented several of their suggestions. However, inspite of these efforts and