NABARD slashes credit potential for crop loan in state

Vijay C Roy

Chandigarh, February 16

The National Bank for Agriculture and Rural Development (NABARD) has rationalised crop loan in Punjab for the next fiscal year. For the fiscal year 2024-25, credit potential under crop loan has been reduced to Rs 69,393 crore compared to Rs 1,03,245 crore in 2023-24, decline of 32.80 per cent. Crop loan in the state commands over 28 per cent of the overall credit to the priority sector.

The credit potential in agriculture farm credit has been reduced for the next fiscal year to consider the scale of finance and cultivable area in the state in order to attain realistic target. According to the data, the gross cropped area in the state stood at 78.51 lakh hectares with gross irrigated area being 77.30 lakh hectares in 2022-23.

According to State Focus Paper 2024-25, overall a potential of Rs 2.43 lakh crore has been estimated for lending towards priority sectors viz. agriculture, MSMEs and other priority areas such as education, export, housing, renewable energy, among others. Approximately 49% of credit potential i.e. Rs 1.18 lakh crore has been identified for agriculture sector.

While in 2023-24, under priority sector the state has a credit potential of Rs 2.73 lakh crore with agriculture sector having a share of 1.56 lakh crore. For the next fiscal year, the credit potential is less because of rationalisation in crop loan and term loan. The potential of term loan has been estimated at Rs 24,527 crore in 2024-25 compared to Rs 28,778 crore in 2023-24.

Finance Minister Harpal Singh Cheema released the State Focus Paper for FY2024-25 during State Credit Seminar organised by NABARD. In his inaugural address, the minister raised concern on depleting ground water in the state and appealed for addressing the issue through crop diversification initiatives, adoption of micro irrigation technologies and collaboration with stakeholders. He called upon the stakeholders to take leads from the State Focus Paper prepared for the overall development of the state.