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)
Cash-in Benefits of the Kisan Credit Card Scheme: Onus is Upon the Farmer
The introduction of modern technology to agricultural sector has led to intensive use of inputs and the package of practices, resulting in manifold increase in the requirement of production credit. Credit from informal sources is available but with strings attached to it. Thus realising this fact, Government of India in 1969 nationalised fourteen major banks and six more were added to this category in 1980. In spite of the various measures to rejuvenate farm credit, the flow of credit to agriculture sector remained quantitatively and qualitatively poor. The institutional sources of credit meet 51 per cent of the credit requirements of the farm sector (Rao, 2003). The non-institutional sources were mainly approached by the farmers due to lack of security assets with them, frequent needs, inadequate supply of institutional credit, undue delays, sophisticated procedure and malpractices adopted by institutional lending agencies (Singh, 1971; Singh H., 1971; Singh, 1973; Sharma, 1978; Nahatkar et al., 2002; Rao, 2003). With a view to inquire into the reasons for the tailbacks of the farm credit and suggest measures for improving the delivery systems as well as simplification of the procedures for farm credit, the Reserve Bank of India (RBI) had set up one man High Level Committee of Shri R.V. Gupta in December 1997. The Committee submitted its report in April 1998. It was against the background of this Committee’s report that RBI in 1998 directed all Public Sector Banks (PSBs), Regional Rural Banks (RRBs) and co-operative banks to introduce Kisan Credit Card Scheme (KCCS) on the lines of the model scheme formulated by National Bank of Agriculture and Rural Development (NABARD) and in due course of time the KCCS was adopted by all the directed agencies. At the all India level, the cumulative number of Kisan Credit Cards (KCCs) issued by all the implementing agencies as of, March 31, 2004, stood at 413.79 lac (Government of India, 2003-04), and the corresponding figure for Punjab was 13.88 lac (88th Meeting of State Level Bankers’ Committee). The KCCS aims at extending adequate and timely support from banking system to the farmer, to meet the crop production and ancillary activities. The credit limit