Packing batteries with more punch
Indian researchers are working on cells that can store more energy, last longer
File photo - THE HINDU
BL Research Bureau
The Centre has been raising the agriculture lending target year after year. But there are still several weak links to the sizeable flow of credit to agriculture. Diversion of agriculture loans for non-agriculture purposes is one such key issue that needs immediate attention. According to the RBI's recent report of the internal working group on agriculture credit, in some of the states, said that agri-credit is far higher than their agri-GDP, indicating the possibility of diversion of credit for non-agricultural purposes.
For instance, in states such as Tamil Nadu and Kerala, agri-credit outstanding is a high 170-180 per cent of the underlying agri-GDP. In Karnataka and Telangana too, the ratio of agri-credit to agri-GDP is over 100 per cent. On the other hand, north eastern states, West Bengal, Jharkhand, Madhya Pradesh, Odisha and others., have very low ratio, implying low credit demand and access in these states.
Another key metric that raises concerns over the diversion of agriculture loans, is the ratio of crop loan disbursed to input requirements. According to RBI data, some of the states are getting significantly high credit against their input cost requirement such as Andhra Pradesh (7.5 times), Kerala (6), Goa (5), Telangana, Tamil Nadu and Uttarakhand (4) and Punjab (3).
In some other states such as Jharkhand, NE states, West Bengal, Chhattisgarh, Bihar, Odisha, Maharashtra, Uttar Pradesh and Rajasthan data suggests that credit is not sufficient to meet their input requirements.
Diversion of agriculture loans in some of the states is a huge cause for concern, as it accentuates the problem of debt overhang. RBI data suggests that there is a high risk of indebtedness in some of the states. The ratio of crop loans to crop GVO (gross value output) shows that while the all-India average was 0.32, there were 11 states with higher loan/output ratio– Kerala being the highest at 0.90, and Tamil Nadu at about 0.65. The higher level of credit intensity in some of the states is a big cause for worry, in light of the rising NPAs within the sector.
Bankers say that most of the farmers have become overleveraged, over a period of time due to restructuring and doling out additional funding.
Over the years, GNPAs in agriculture loans have been rising sharply. From about 2.5 per cent some five years back, GNPAs have shot up to 8.44 per cent as on March 31, 2019 in the agriculture sector according to the RBI report.
The deterioration in credit culture has come on the back of loan waivers announced by state governments, which has led to many borrowers withholding repayment. In 2016-17 and 2017-18, NPA level increased sharply, indicating strategic default (in anticipation of a loan waiver) arising from the state-level loan waiver announcements. The incidence of NPAs has been higher in states such as Maharashtra, Karnataka, Uttar Pradesh, Punjab and Bihar.
Indian researchers are working on cells that can store more energy, last longer
To fix a broken bone, doctors often harvest another bone from the patient’s body or from someone else. It ...
Superconductors from IIScScientists at IISc Bangalore have invented a device with a nanocrystal structure ...
Engineering and construction giant L&T has won a licence from the Council of Scientific & Industrial ...
Will a stock continue its current trend or will it reverse? We tell you how you can read chart patterns to ...
Option price falls more than it rises for the same change in underlying
A long-term vacation here is worth a check-in
The fund delivered a return of 31.5% in 2020 compared with the category’s 15.5%
In these isolated times when people yearn for a slice of the familiar, amateur and professional chefs are ...
With strokes of quirky humour, Partha Pratim Deb uses pulp, terracotta, glass and discarded cloth to create ...
Given the events in Washington DC on January 6, this week’s quiz is all about buildings that house or housed ...
While good writing wars against the cliché, television gives it a natural home
Digital is becoming dominant media, but are companies and their ad agencies transforming fast enough to make a ...
Slow Network, promoted by journalist-lyricist Neelesh Misra, pushes rural products and experiences
How marketers can use the traditional exchange of festive wishes meaningfully
For Fortune, a brand celebrating its 20th anniversary, it was a rude shock to become the butt of social media ...
Three years after its inception, compliance with GST procedures remains a headache for exporters, job workers ...
Corporate social responsibility (CSR) initiatives of companies are altering the prospects for wooden toys of ...
Aequs Aerospace to create space for large-scale manufacture of toys at Koppal
And it has every reason to smile. Covid-19 has triggered a consumer shift towards branded products as ...
Please Email the Editor