Bengal to upgrade 250 PACS to banking outlets
Kolkata: Keeping the upcoming panchayat elections in view, West Bengal government is going to upgrade 250 Primary Agricultural Credit Societies (PACS) to banking outlets in the first phase with an objective to facilitate more credit to farmers, an official said on Monday.
According to the official, commercial banks' credit advance to agriculture and allied sector has been "dismally low" in the state leading to a low credit-deposit ratio in the eastern state.
In fact, the Naional Bank for Agriculture and Rural Development (Nabard), which unveiled "State Focus Paper for 2018-19" and "Area Development Scheme for West Bengal 2018-2023" on Monday, showed ground-level credit flow to the agriculture sector in West Bengal had not achieved the targets during 2011-12 to 2016-17.
"Total credit-deposit ratio on an average is around 70 per cent in the state, which is less than the national average. The main reason is the reluctance of the banking sector to advance credit to agriculture and its allied sectors, which is one of the priority sector lending areas. In some districts, the ratio is as poor as 40 per cent.
"We have taken decision to convert 250 Primary Agriculture Credit Societies to banking outlets in the first phase, particularly, in gram panchayats where there are no bank branches," State Finance Department's Additional Chief Secretary H.K. Dwivedi said while addressing the State Credit Seminar 2018-19 organised by Nabard.
Dwivedi also said a major chunk of advances under priority sector lending was provided to the housing sector (which also comes under priority sector lending) and credit infusion to agriculture and allied remains "dismally low".
According to the "Focus Paper" which forms the base for credit planning by banks for 2018-19, state credit potential of Rs 1,10,137.19 crore has been estimated for the next financial year as against a potential of Rs 95,288 crore for the year 2017-18, which is an increase of 15.58 per cent.
Of the total credit projections for 2018-19, around Rs 63,196 crore was estimated for agriculture.
"While at the all-India level, the agriculture credit achievements have exceeded the targets consistently for the last five years from 2011-12 to 2016-17, the ground level credit flow to the agriculture sector in West Bengal has not achieved the targets fully during the same period.
"It is also a matter of concern that the state contributed seven per cent of total food grain production in the country, the percentage share of credit in West Bengal has crossed 3.5 per cent of the total agriculture credit for the country for the first time in 2016-17," the paper said.
Dwivedi also said the state has been focusing on agriculture and its allied sectors and in 2010-11, the total expenditure in the sector was around Rs 3,029 crore and the same has been increased to around Rs 16,700 crore in 2016-17.
The state's warehousing capacity is expected to be almost 10 lakh tonnes at the end of the current fiscal, up from about 62,000 tonnes in 2010-11, he said.
"We have also increased procurement from farmers. Earlier, we used to procure not more than 13-14 lakh tonnes of rice; last year, we procured 52 lakh tonnes. Formal requests from three states have come for West Bengal rice because of our record procurement," Dwivedi added.