Abstract
India, as a welfare-oriented state, has a responsibility to promote the economic and social well-being of all sections of society, particularly the agricultural community. Agricultural finance and credit play a vital role in the development of the agricultural sector by enabling farmers to acquire agricultural machinery, seeds, fertilizers, pesticides, irrigation facilities, and other essential inputs required to enhance productivity. Since a large proportion of India's population depends directly or indirectly on agriculture and allied activities, ensuring timely and affordable access to institutional credit is essential for sustainable agricultural development. Agricultural credit in India is broadly obtained from two sources: formal and informal sources. Formal sources include commercial banks, cooperative banks, regional rural banks, and NABARD, while informal sources include moneylenders, traders, relatives, friends, and indigenous financial institutions. Agricultural loans are utilized for various purposes, including crop cultivation, purchase of agricultural inputs, investment in farm machinery, irrigation, land development, and other production-related activities. Credit support is required throughout the agricultural production cycle, beginning with land preparation and continuing through sowing, cultivation, harvesting, and marketing. In addition to institutional credit, the Central and State Governments have introduced several schemes and programmes to strengthen the financial position of farmers and improve agricultural productivity. The present paper examines the importance of agricultural finance in India and highlights major government initiatives designed to provide financial assistance to farmers. The study emphasizes that timely, adequate, affordable, and accessible agricultural credit is essential for increasing farm productivity, promoting capital formation, improving farm incomes, and strengthening the overall rural economy.
Schemes Relating
References
• Datt & Sundaram, 72nd Edition (2018), ‘Indian Economy’, S. Chand, New Delhi. • Raghul B Nagpal, (2017), “Agricultural Finance’, Pacific Books International, New Delhi. • Economic Survey, Ministry of Finance, Government of India, 2022-2023.
Author information
Dr. S. Deepa Lakshmi
Guest Faculty, Department of Economics, Government Arts college for women, Salem.