Questions raised over efficacy of crop loan scheme in State
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Possibility of diverting credit for non-agricultural purposes exists: RBI
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Possibility of diverting credit for non-agricultural purposes exists: RBI The State government’s scheme for waiver of crop loans extended by cooperative societies has triggered a debate on the efficacy of such credit.
This assumes relevance as the Reserve Bank of India, in a study during 2019, hinted that Tamil Nadu was among those States where the possibility of diversion of credit for non-agricultural purposes existed. The bank made the assessment, using the data for 2015-2017 which revealed that in Tamil Nadu, the ratio of total agricultural credit outstanding in relation to its agricultural gross domestic product (GDP) was about 170% -180% . Again, using the data for 2014-16, the bank concluded that Tamil Nadu got the credit four times the value of input cost requirement.