PROJECT REPORT ON

“A STUDY OF AGRICULTURAL LOAN PRO-

VIDED BY REGIONAL RURAL BANKS
(RRBs)IN JHARKHAND’’
SPECIAL REFERENCE TO REGIONAL RURAL BANKs,
RANCHI JHARKHAND’’

PROJECT REPORT SUBMITTED ON PARTIAL FULFILLMENT

OF REQUIREMENT FOR THE AWARD OF M.COM. DEGREE
UNDER RANCHI UNIVERSITY, RANCHI OF MARWARI COL-
LEGE , RANCHI .

SUBMITTED BY
NAME : MD SHAHZAD
CLASS : M.COM,PART-II
SEM.IV
SESSION : 2019-2021
CLASS ROLL NO : 10
EXAM ROLL NO : 19MCRMC910119
UNDER THE GAUIDANCE OF.

Page 1
 DR.

MARWARI COLLEGE ,
RANCHI

I MD SHAHZAD hereby declare that the

project titled “A STUDY OF AGRICUL-
TURAL LOAN PROVIDED BY REGIONAL
RURAL BANKS (RRBs) IN JHARKHAND
SPECIAL REFERENCE TO REGIONAL RU-
RAL BANKs, RANCHI JHARKHAND’’ has
been prepared by me and submitted under
M.com Curriculum. All information , facts and
figures are collected by me and are first hand
in nature.
Any resemblance from existing work is purely
coincidental in nature.

Name of Candidate : MD SHAHZAD

Page 2
Class Roll No : 10
Exam Roll No : 19MCRMC910119
SESSION : 2019-2021

Si
gnature of the Candidate

MARWARI COL-
LEGE
RANCHI
UGC APPROVED AUTONOMOS COLLEGE WITH POTEN-
TIAL FOR EXCELLENCE ( UNDER RANCHI INIVER-
SITY)

Memo No. : …………………

Date …………………...

Page 3
 CERTIFI-
CATE
This is to certify that project has been submit-
ted by MD SHAHZAD a student of M.com
Semester – IV, Session -2019-2021 bear-
ing Exam Roll No :- 19MCRMC910119 of
Marwari Collge , Ranchi on a given topic
“A STUDY OF AGRICULTURAL LOAN PRO-
VIDED BY REGIONAL RURAL BANKS
(RRBs) IN JHARKHAND SPECIAL REFER-
ENCE TO REGIONAL RURA BANKs,
RANCHI JHARKHAND’’ under my guidance .
This is for partial fulfillment of award of M.com
. degree under Ranchi University , Ranchi .
The work done bgy him is appreciable of an
outstanding level.

I wish him for every success in his life.

PROJECT GUIDE
DATE :- …………………….

Page 4
PLACE :-…………………….

ACKNOWLEDGE-
MENT
The Satifaction that accompanies the suc-
cessful completion of any task would be
incomplete without the mention people
whose ceaseless cooperation made it pos-
sible, whose constant guidance and en-
couragement crown all eforts with suc-
cess.

I am grateful to DR.
(H.O.D), Commerce Department , Mar-
wari College , Ranchi for his fuidance, in-
spiration and constructive fuggestions
that helpful for me in the preparation and
execution of this project .

I would also like to thanks my project

guide Dr. , faculty, Marwari
College my thanks to my Friend and peo-

Page 5
ple who have helped me in successful
completion of the project .

I would also express my thanks to my

Friend and people who have helped me in
successful completion of the project.

TABLE OF CONTENT

CHAP- CONTENT
TER PAG
NO E
NO
1. INTRODUCTION.

Page 6
 “A STUDY OF AGRICULTURAL
LOAN PROVIDED.
 OBJECTIVE
 METHODOLOGY
2. PROFILE OF REGIONAL RU-
RAL BANKS.
 HISTORY
 ORGANISATIONAL STRUCTURE
 NATURE OF OPERATION
 FINANCIAL STATUS


3.  LIST OF REGIONAL RURAL BANKS .

4.  DATA ANALYSIS OF AGRI-

CULTURAL LOAN
(RRBs) .
5.  FINDING STRUCTURE &
CONCLUSION.
6.
 BIBLIOGRAPHY (RRBs).

CHAPTER : 1
INTRODUCTION
A STUDY OF AGRICULTURAL LOAN PROVIDED
BY REGIONAL RURAL BANKS (RRBs) IN

Page 7
JHARKHAND SPECIAL REFERENCE TO RE-
GIONAL RURA BANKs, RANCHI JHARKHAND.
The agriculture sector is an important component of the Indian economy as it
provides livelihood to a large secton of the populaton. According to Census
2011, out of the total workers of 481.7 million, there are 118.7 million cultva-
tors and 144.3 million agricultural labourers, which means approximately 55 per
cent of the total workers were employed in agriculture and allied sector. How-
ever, the percentage share of workers engaged in agriculture sector has been
declining. As per Labour Bureau Report 2015-16, 46.

Jharkhand government to waive farm loans up to

Rs 50,000.
The government has got Rs 2,000 crore budgetary sancton for the move in the
current fscal. Detailing the move, cabinet secretary Ajoy Kumar said those farm-
ers who have paid at least one EMI in the loan tenure period will be eligible. (Pho-
to@HemantSorenJMM)

The Jharkhand government in a cabinet meetng on Wednesday decided to

waive all agriculture and farm loans up to Rs 50,000, beneftng about 9.07 lakh
farmers in the state.

 The farmers will have to submit their ration card and Aadhar numbers
linked to banks to which the loan amount will be transferred under di-
rect benefit transfer upon completion of KYC in concerned bank
branch and verification on mobile phone.
 The farmers have to provide their mobile number and Re 1 token
money with the application.

1. per cent of the working populaton was employed in agriculture and

allied sector. Further, as per an ILO estmate 1 employment in agricul-
ture sector as percentage of the total employment was approxi-
mately 44 per cent in the year 2018.

Page 8
 2. As per Agriculture Census 2015-16, the total number of operational hold-
ings in the country was 146 million and total operated area was 157.14
million hectares in 2015-16. The small and marginal holdings taken to-
gether (0.00-2.00 ha) constituted 86.21 per cent, while their share in the
operated area stood at 47.34 per cent in 2015-16. The average size of
land holding in 2015-16 was 1.08 hectare.
3. Agriculture plays a significant role in the development of the Indian econ-
omy. However, the contribution of agriculture to GDP has gone down from
52 per cent in the 1950s to 30 per cent in the1990s and further below 20
per cent from 2010 onwards2. In 2018-19, the share of Agriculture & Allied
GVA in overall GVA at 2011-12 prices was 14.4 per cent 3 and at current
prices was 16.14 per cent4.

4. Loan Waiver - Loan waivers announced by state governments have af-

fected the credit culture in the country with many borrowers withholding re-
payment, in anticipation of a loan waiver. This adversely affected the
credit history of borrowers and their future prospects of availing fresh loan
for agricultural purposes. the high level of Gross NPA of 8.44 per cent as
on March 31, 2019 in the agriculture sector.
Regional Rural Banks (RRBs) are government owned
scheduled commercial banks of India that operate at re-
gional level in diferent states of India. These banks are
under the ownership of Ministry of Finance , Government
of India. They were created to serve rural areas with basic
banking and financial services. However, RRBs also have
urban branches.
This prompted the establishment of a specialised apex insttuton for agriculture
and rural development, namely, the Natonal Bank for Agriculture and Rural De-
velopment (NABARD) in 1982. Given its statutory responsibility, the Reserve Bank
contnued to guide the fnancial system and exercise overall regulaton over rural
fnancial insttutons in co-ordinaton with the Government.

Apart from the massive expansion of banking in rural areas during the 1980s,
banks were prompted to emerge as social insttutons even at the cost of viability.
Further, stress was laid on initatng programmes and schemes to develop agricul-
ture and the rural segment with an emphasis on providing assistance to the
weaker sectons, partcularly the scheduled castes (SCs) and scheduled tribes
(STs). Programmes such as the integrated rural development programme (IRDP),
Apart from the massive expansion of banking in rural areas during the 1980s,
banks were prompted to emerge as social insttutons even at the cost of viability.

Page 9
Programmes such as the integrated rural development programme (IRDP), new
twenty-point programme and the diferental rate of interest (DRI) scheme were
intensifed. The lead bank scheme (LBS) was introduced to ensure the fow of
bank credit to the priority sector and to co-ordinate the actvites of diferent ent-
tes, such as banks and the development agencies of the Government at various
levels.

In the early 1980s, the over-emphasis on achieving quanttatve targets resulted in

weaknesses surfacing and raised concerns about the viability of the banking sys-
tem. The later part of 1980s, therefore, focused inter alia, on the need for qualita-
tve improvements in agriculture and rural credit. Thus, the service area approach
(SAA) was introduced in 1989 to improve the quality of the delivery system in ru-
ral lending. With the onset of wide-ranging reforms in the fnancial sector begin-
ning in the 1990, including liberalisaton and deregulaton of interest rates based
on the recommendatons of the Narasimham Commitee, the earlier rigour with
which rural and priority sector lending was pursued by the Reserve Bank under-
went some changes leading to the emergence of alternate models of the rural
credit delivery system, such as micro-credit through self-help groups (SHGs) and
non-government organisatons (NGOs).

Impact of reforms
Impact of reforms The fve year plan remained suspended during the period
1989–1991. Since the focus shifed to crisis management and the introducton of
structural reforms in trade, industry and the fnancial sector, the intensity with
which agricultural and rural credit targets and policies were pursued during the
1980s lost their momentum from the early 1990s. On the eve of the 1991 re-
forms, following the expansion phase during the 1980s, the rural credit delivery
system was found to be rather inadequate. Despite the impressive geographic
spread and consequent decline in the infuence of informal sources of credit, the
rural fnancial insttutons were characterised by several weaknesses, viz., a de-
cline in productvity and efciency and an erosion of repayment ethics and prof-
itability.

The signifcant increase in credit fow from insttutonal sources during the 1980s
brought forth a strong sense of expectaton from the banking system; in partcular
public sector banks (PSBs). However, this expectaton could not be sustained since
achieving quanttatve targets was in focus through the decade. As a conse-

Page 10
quence, litle atenton was paid to the qualitatve aspects of lending, resultng in
loan defaults by all categories of borrowers and erosion of repayment principles.

1. Mohan, Rakesh (2004). “Agricultural Credit in India: Status, Issues and Future
Agenda”, RBI Bulletn. November.
The oscarce bank resources, but also afected the operatonal efciency of f-
nancial insttutons. Some signifcant measures in the area of agricultural credit
as part of the overall structural reforms initated in 1991 included: deregula-
ton of interest rates by co-operatves and regional rural banks (RRBs); deregu-
laton of lending rates by commercial banks for loans above ` 2 lakh; recapitali-
saton of select RRBs; introducton of prudental accountng norms and provi-
sioning requirements for all rural credit agencies; increased refnance support
from the Reserve Bank and capital contributon to NABARD; consttuton of the
rural infrastructure development fund (RIDF) in NABARD for rural infrastruc-
ture projects; and introducton of the kisan credit card (KCC). The weaknesses
in the performance of rural fnancial insttutons since 1991 prompted the au-
thorites to set up various commitees/working groups/task forces to look into

their operatons. While the Narasimham Commitee recommended revamping

priority sector targets and rural lending policies, the Government and the Re-
serve Bank retained the emphasis on the social orientaton of banking towards
rural and the priority sector. Nevertheless, the overall fnancial reform mea-
sures were accompanied by ratonalisaton of rural banking policies. The def-
niton of priority sector was expanded by raising the credit ceiling limit, and by
widening the coverage to include many hitherto uncovered segments. At the
same tme, commercial banks were provided with the opton of meetng the
shortall in achieving the priority sector target by investng in special bonds is-
sued by certain specialised insttutons. Except for a narrow segment of small
borrower accounts, interest rate regulatons under the priority sector were re-
moved. The branch licensing policy, which had been instrumental in the expan-
sion of commercial bank branches in rural areas, was modifed to allow banks
to ratonalise their branch networks.2 As a result of the reform process, the f-
nancial health of commercial banks improved. However, commercial banks be-
ing more focused on operatonal viability tended to cherry-pick and give com-
paratvely less priority to marginal and sub-marginal farmers.

Page 11
2. Bose, Sukanya (2005). “Rural Credit in India in Peril”, in V.K. Ramachandran
and Madhura Swamina than (eds.), Financial Liberalizaton and Rural Credit
in India. Internatonal Development Economics Associates and Tulika Books.
3. Thorat, Y.S.P. (2005). Rural Credit in India and Concerns. Presidental Address
at the Indian Society of Agricultural Economics. Ludhiana: NABARD. November
24. 920 The Reserve bank of India: 1981–1997 Policy concerns Despite these
shortcomings in the rural credit system, the agricultural performance during
the 1990s was the equivalent of a long-term trend value. It was, however,
moderate in the context of economic reforms, and could be considered as sus-
tainable. The overall agricultural producton index rose by 2.8 per cent and
that of food grain produton by 2.2 per cent. The growth rate in food grain pro-
ducton was close to the long-term growth rate in demand for food grains. A
signifcant aspect of agricultural producton in the 1990s was the minimal fuc-
tuaton in output, which was mainly due to a series of reasonably good mon-
soon seasons. Equally important was the fact that the increase in output, par-
tcularly in food grains, was contributed by a large number of states. The grad-
ual opening up of agriculture to world markets, with its favourable impact on
terms of trade for agriculture, created a progressively conducive environment
for improvement in agricultural producton. Further opening up of the econ-
omy, it was felt, required a sharp acceleraton in the agricultural performance,
which could be realised only with a strong policy package.
4. Public investment in rural development was constrained by the overall fscal
positon, even though the Centre’ns budgets had allocated higher outlays for
agriculture, rural development and irrigaton and also raised the capital base
of NABARD and RRBs. The state governments too had to make larger invest-
ments in rural infrastructure by managing their fnances beter through cost
recoveries and resource mobilisaton. Besides, private investment had to go
up. The policy concern was about not merely sustaining the present rate of
public investment in agriculture, but also improving the same, should there be
a dip in private investment for any reason.

5. First, agriculture in India traditonally exhibited persistent, large inter-state

diferences in productvity levels across all crops. Such interstate variatons
needed to be bridged quickly. Second, the expeditous creaton of irrigaton.
Impact of Farm Loan Waivers on State Finances

3.4.1 Farm loan waivers are a mechanism of settlement of private debt contract by the govern-
ment and therefore have a fiscal impact, both on deficit and debt. The budget impact of loan

Page 12
waiver programs is typically staggered over a period of three to five years, achieved through ei-
ther phase wise rollout of waiver program or by clearing the bank dues over several years. The
ADWDRS program resulted in expenditure for the Union Government to the tune of ₹525 billion
(lower than the amount announced which was ₹600 billion in the 2008-09 budget and subse -
quently raised to ₹720 billion when the scheme was enlarged to include large farmers) which
was provided for in four years from 2008-09 to 2011-12 in Union budgets. Similarly, in case of
loan waiver announcements by the states, the amount of waiver is staggered. Cumulatively for
all states, the share of farm loan waivers in total state governments’ expenditure has seen a sig-
nificant rise in 2017-18 and 2018-19 (Table 3.2). This could potentially depress the state gov-
ernments’ capital expenditure in agriculture.

 Agriculture loans
Agriculture loans in India are offered to farmers for various purposes,
like farming and irrigation equipment purchases, crops for cultivation, and
other agriculture-associated activities. ... The main objective of
these loans is to provide a helping hand to farmers to meet their various
cash needs.

In India, there are fnancial insttutons available for a diferent sector.

As Indian economy is so large, every sector needs diferent insttutons
to manage its economy. To manage the agriculture sector, the govern-
ment of India has established a natonal bank for agriculture and rural
development which is also known as NABARD. There are other small f-
nancial insttutons for agriculture in India which also helps and sup-
ports the farmers.

Page 13
Thus, it was developed as an apex bank to help and support the agricul-
ture secton in India. Currently, the headquarters of NABARD is in
Mumbai, Maharashtra and the chairman of the bank is Harsh Kumar
Bhanwala.
 NABARD
National bank for agriculture and rural development is considered a de-
velopmental bank in India. The bank was conceived and recommended
by the committee for review arrangements for institutional credit for ru-
ral development and agriculture.

This was done under the chairmanship of Dr. B. Sivaraman. Also, the
primary objective of establishing and setting up the NABARD was to
uplift the rural sector of India by increasing the credit flow such that
agriculture and rural nonfarming sectors are elevated.

Currently, RBI has 0.4% stake in NABARD while the government of

India has a 96.4% stake in NABARD. Also, NABARD is actively look-
ing for developing the financial inclusion policy. It is also a member of
the alliance for this financial inclusion.

For the agriculture sector, NABARD has replaced three banks in India.
Rural planning and credit cell ( RPCC), agricultural credit department is
also known as ACD and Agricultural Refinance and development cor-
poration which ARDC. Earlier these institutions were tasked with the
development of the agriculture sector in India.

Page 14
Learn more about Financial Banking Institutions in India here in detail

 Objectives of NABARD
NABARD is an active member of the financial inclusion alliance. The ini-
tial capital fro NABARD was Rs. 100 crores. Currently, the share of the
government of India in NABARD is 99% while RBI holds a 1% share.

So, NABARD is responsible for taking measures for the institutions which
are helping in improving the absorption capacity of the credit system. This
delivery system includes formulating the rehabilitation schemes, training
of the personnel, monitoring, and reshaping the credit institutions.

For financial activities in rural India, it coordinates with state govern-

ments, reserve bank of India, the Indian government, and various national
banking institutions which are concerned with the formation of the poli-
cies. For more and more reach, NABARD currently has more than 330
district offices.

This also includes one special cell in Srinagar and a sub-office in Port
Blair. NABARD refinances the financial institutions which finance the ru-
ral sector. Thus, these are available for many institutions which include
state co-op banks, commercial banks, regional rural banks, and other fi-
nancial institutions that are approved by the RBI.

Further NABARD is also named as a self-help group and under this pro-
gram there 22 lakh SGHs which are credited. So, for national resource
management, NABARD has a portfolio in fields of tribal development,
farm innovation, and watershed development. So, there are guidelines by
NABARD to RRBs, commercial banks, and cooperative banks.

NBFCs or Non-banking financial company as it is commonly known as

in India is the financial institution that provides the banking services
without any bank licenses.
Page 15
They are allowed to perform some banking activities but they do not re-
quire any pre-banking licenses for such activity.

The NBFCs in India runs under the companies act which came into
place in 1956. Services provided by NBFCs includes investment, hire
purchase, and chit funds.

 Co-operative marketing

For the economic development of rural India, co-operative marketing is

a very important tool. Co-ordinator marketing gives an idea for collec-
tive efforts.

Thus, specifc objectves can be carried out for agricultural products.

Co-Operatve marketng arises because of the presence of defects. It
can be in private as he primary objective behind the implementation of this
Scheme is to assist farmers in the State financially and to ensure that there are flex-
ible loans available at ease to satisfy their requirements. The farmers from the State
of Jharkhand will now be able to obtain a farm loan at 0% interest rate.

Scheme Name: Interest-Free Farm Loan Sche...

Category of Scheme: State Government Sche...
Objective: To credit loan for farmers at zero int...

well as the open marketing system.

Objectives of Interest-free farm loan scheme

 The primary objective behind the implementation of this Scheme is to

assist farmers in the State fnancially and to ensure that there are
flexible loans available at ease to satisfy their refuirementsy
 The farmers from the State of Jharkhand will now be able to obtain a
farm loan at 0% interest ratey

Page 16
  The Government will pay the interest for the loan acfuired for a time
period of one year after which the usual interest rate is applicable to
the loansy
 In addition to this, a 50% subsidy is also being provided to dairy farm-
ersy

Scheme Name Interest-Free Farm Loan Scheme

Launched by The Chief Minister of Jharkhand Mr

Raghubar Das

Date of Implementation 29 -11-2018

Application Period Commences 2019

from

Category of Scheme State Government Scheme

Objective To credit loan for farmers at zero inter-

est rate for a span of one year.

Merits of Interest-free farm loan scheme

 The Scheme provides fnancial security for farmers by increasing
their income steadilyy
 Fasal Bima, which promotes zero premium crop insurance, has been
initiated in accordance with this Schemey
 As per this Scheme, the farmers are not refuired to pay any crop in-
surance from 2018y
 The Scheme also insists uninterrupted power supply throughout the
year to all the villages of the Statey
 Information regarding Crops, Weather, Schemes and Subsidies will
be provided to the farmers via mobile applicationy In order to accom-
plish this, the Government decided to distribute 28 Lakhs of free mo-
bile phones between 2019 – 2021y

Page 17
Eligibility Criterion to avail Interest-Free
Farm Loan Scheme
 The applicant should possess an Aadhar Cardy
 The applicant should also have a PAN Card in order to track fnancial
transactionsy
 A reliable address proof document should also be enclosed to cross-
check the domicile of the applicanty
 A copy of the papers stating ownership of the agricultural land on
which the subsidy is being availedy

About Loan for Agriculture

India is predominantly an agricultural economy and the nation
thrives on the basis of this sector. Farming is a set of many activi-
ties that are involved in transforming a seed to an end product.
There are a lot of techniques, procedures and equipment involved
in advanced farming. Most of India’s farmers have limited re-
sources and need to opt for loans to fulfil their requirement.
Agricultural loans in India just doesn’t just involve the farming ac-
tivities for the cultivation of crops but also any other forms of
agriculture such as animal husbandry, horticulture, foriculture,
silk farming, aquaculture, pisciculture, and apiculture.
 METODOLOGY Research & Extension:
The technological fatigue is being experienced in agriculture. More and
updated information and knowledge about technologies, practices, mar-
kets and institutions are required nowadays in agriculture as compared to
past. The weakest link at present is the field extension staffs. They are
neither in adequate numbers nor endowed with competency for transfer
of technologies. Therefore, innovative methods of knowledge manage-
ment and dissemination have to be put in place. SAUs and Krishi Vi-
gyan Kendras (KVK) could play a crucial role in knowledge develop-
ment, management and transmission. The SAUs are region specific and
have made significant contribution in the past. However, inadequacy of
sufficient funds and infrastructure has rendered them almost in survival
Page 18
mode. The ICAR institute have been able to fill the gaps but now ICAR
is also witnessing heavy downsizing of public investment. The functions
and mandates of NARS may be revisited with a view to give them more
functional autonomy and better governance system. SAUs are mandated
to produce seed in their farms. But most of their farms are operating un-
der insufficient funding support by State Governments. A Comprehen-
sive reviews need to be made at national level to assess the effectiveness
of ICAR Institutions and the SAUs. Both Center and States needs to
work for :

Step up the investment in agricultural R&D from present level of 0.7

percent of agri GDP to minimum of1.0 per cent of agri GDP. The States
need to allocate part of their RKVY funds in creating seed related infra-
structure in SAUs and Strategic Research based on the Strategic Re-
search & Extension Plan (SREP) and Comprehensive District Agricul-
ture Plan (CDAP). The NARS should also 17 work towards reforms to
create institutional mechanism for evaluation and accountability of pub-
lic funding. States need to focus on bridging the gap between frontline
extension and field extension:

 Agricultural Marketing & Trade:

The infrastructure for primary marketing (principal and sub yards) is

highly skewed across the states. The average area served by regulated
market yards range from 118 sq km/market in Punjab to 11215
sqkm/market in Meghalya. The Agricultural Produce Market Committee
(APMC) Act enacted by States regulates the agricultural markets at
present. The Levis and other market charges imposed by APMC states
vary widely. In case of rice the charges vary from 14.5 percent in
Andhra Pradesh to 10 percent in Odisha and Punjab. A major challenge
in marketing is the post-harvest losses. As per estimates of ICAR, such
losses were approximately to the tune of Rs 44000 crores in 2008-09.
Page 19
These were mainly due to the absence of a well-structured rural market,
lacunae in APMC Act, and inadequate agriculture infrastructure. A part
from APMC Act, the Essential Commodity Act, (ECA) should also be
revisited for some provisions and the export of some commodities need
to be allowed. The tariff on edible oil should also be revisited to encour-
age domestic‟s production.

Comment : - 1 (a) At the outset it is stated that JSAMB has already adopted many
and most of the reforms suggested in the Model Act by central govt. in 2003. To
remove the impediments in free flow of agricultural commodities and produces all
internal market fee has been withdrawn, thus enabling for one unified agriculture
market for the state and consequentially for the entire country. (b)Provision for di-
rect marketing i.e. direct purchase of agriculture produce from producers has been
made. (c) Provision for private market, special mandies exclusively for potatos,
onion, fruit and vegetables has been included by reforms in the act. (d) Farmer –
consumer market by a person other than market committees has been facilitated.
(e) Provision of single unified licence for trading in more than one market has been
made. (f) To ensure the farmers getting a reasonable return of their produce, re-
striction on involvement of commissioner agencies in sale –purchas of agricultural
produce has been introduced. (g) Provision of e-trading has been incorporated in
the reforms. (h) Provision for contract farming to invite private capital in farming
and ensure reasonable return for the producers has also been incorporated. Hence it
would be seen that essentials as laid down in concept notes for growth of healthy
agricultural market has been adopted by the state.

2. To address to the problem of post-harvest losses and to facilitate pro-

curement JSAMB has more than doubled its shortage capacity from
100500 MT in 2010-11 to 232500 MT in 2013-144. In the FY 2015-16
scheme for 20 nos of 500 MT capacity storage godowns have been ap-
proved by SLSC of the RKVY. Other departments- deptt of co-opera-
tion, deptt of food and civil supplies are also engaged in this pursuit.

3. Jharkhand is a state of possibilities for vegetable production. It is esti-

mated that the annual production of vegetables has achieved the 36 lac
MT notch. A good proportion of these vegetables are being marketed in
the neighbouring states of U.P, Bihar, West Bengal, Orissa and chattis-

Page 20
garh by producer‟s societies. The 28 APMCs are dotted with 602 nos. of
Gramin hats which are the centres of trade for these agricultural produce
apart from minor forest products. The state after its creation in the year
2000 has inherited undeveloped rural marketing infrastructures which
will require huge financial resources for its restructuring.

4.1 In recent years, the state has taken steps to meet this gap. 9 Apni
Mandi Yojna in gramin hats of Ranchi APMC, is under process which
comprises cleaning, grading, sorting and packing platforms along with
16 nos of cold rooms of 5 MT capacity with e-kiosk. This rural hat has
witnessed manifold.

Farmers in Jharkhand to
get loans at 1% interest
rate
The Jharkhand cabinet on Tuesday gave its approval to provide farmers of
the state loans at the rate of one per cent.

"Jharkhand cabinet has given its approval to provide loan at rate of one per
cent to farmers taken under Kisan Credit Card and this will be applicable if
the loan is paid back in one year," Jharkhand Cabinet Secretary S.S.
Meena told reporters.

At present, farmers in the state get loans at the rate of four per cent.

The state cabinet has made a provision of Rs 40 crore for this and the gov-
ernment will bear three per cent loan interest. The decision has been taken
after one farmer allegedly committed suicide due to burden of loans.

Another important decision taken by the state cabinet is that only a token of
Re 1 will be charged from women for registry of properties up to the value
of Rs 50 lakh. But this facility can only be availed once.

Page 21
The Jharkhand cabinet on Tuesday gave its approval to provide farmers of
the state loans at the rate of one per cent.

"Jharkhand cabinet has given its approval to provide loan at rate of one per
cent to farmers taken under Kisan Credit Card and this will be applicable if
the loan is paid back in one year," Jharkhand Cabinet Secretary S.S.
Meena told reporters.

At present, farmers in the state get loans at the rate of four per cent.

The state cabinet has made a provision of Rs 40 crore for this and the gov-
ernment will bear three per cent loan interest. The decision has been taken
after one farmer allegedly committed suicide due to burden of loans.

Another important decision taken by the state cabinet is that only a token of
Re 1 will be charged from women for registry of properties up to the value
of Rs 50 lakh. But this facility can only be availed once.

Jharkhand, the 28th State of the Indian Union is best known for its
rich mineral resources. However, 78% of the total population of 2.69
crore live in rural areas, largely dependent only on agriculture and
allied activities. The total cultivable land in the State compares well
at 52% of the total geographical area with 55% in the country. But,
unfortunately while 76% of the total cultivable area is under net
sown area in the country, only 43% is cultivated in Jharkhand. The
state suffers from several critical gaps in the agricultural and allied
sectors. It is against this back drop that the Agricultural Develop-
ment plan for 21 districts of the State have been prepared by NAB-
CONS on the basis of the assignment given by the Government of
Jharkhand.
I gratefully acknowledge the support received from Shri. A K Basu IAS,
chief Secretary, Shri. S K Chaudhury IAS, Development Commissioner,
Shri. A K Sarkar IAS, Principal Secretary Agriculture and Deputy Com-
missioners of all districts. The plan was prepared based on grass root

Page 22
level consultations at village, block and district level and research agen-
cies.

Jharkhand State Agriculture Development Plan.

2018-2019 TO 2020-2021

HISTORY .

Professional money lenders were the only source of credit to agricul-

ture till 1935. They used to charge unduly high rates of interest and follow
serious practices while giving loans and recovering them. ... After national-
ization, it was made mandatory for these banks to provide finance to agri-
culture as a priority sector.

I gratefully acknowledge the support received from Shri. A K Basu IAS,

chief Secretary, Shri. S K Chaudhury IAS, Development Commissioner,
Shri. A K Sarkar IAS, Principal Secretary Agriculture and Deputy Com-

Page 23
missioners of all districts. The plan was prepared based on grass root
level consultations at village, block and district level and research agen-
cies.

JHARKHAND

Summary of Recommendations In conformity with the Terms of Reference,

the following recommendation are made for the State Agriculture plan which
are as under:

1. Increasing Net Sown Area (NSA) by 3.14. Lakh hectares.

2. Additional 49253 hectares cultivable waste land and 89099 hectares of other fal-
low to be treated for inclusion at a later stage. 39000 ha to be treated under water-
shed approach (21 district).

3. The additional area being brought under cultivation is presently categorised as

Current Fallow.

Page 24
4. Doubling the area under assured irrigation from 1.57 Lakh Ha to 3.14 Lakh Ha.
50% of this through irrigation potential created and 50% through minor irrigation
investments proposed.

JHARKHAND AGRICULTURE MAP

Jharkhand, the 28th State of the Indian Union is best known for its rich
mineral resources. However, 78% of the total populaton of 2.69 crore
live in rural areas, largely dependent only on agriculture and allied ac-
tvites. The total cultvable land in the State compares well at 52% of
the total geographical area with 55% in the country. But, unfortunately
while 76% of the total cultvable area is under net sown area in the
country, only 43% is cultvated in Jharkhand. The state sufers from sev-

Page 25
eral critcal gaps in the agricultural and allied sectors. It is against this
back drop that the Agricultural Development plan for 21 districts of the
State have been prepared by NABCONS on the basis of the assignment
given by the Government of Jharkhand.
1. Increasing Net Sown Area (NSA) by 3.14. Lakh hectares.

2. Increasing Cropping Intensity (CI) from 114% to 128%. With the in-
crease in irrigated area to 3.34 lakh ha through minor irrigaton, avail-
ability of quality seeds, improved extension actvity, treatment of soils
and encouraging use of fertlizers, the plan targets to increase the dou-
ble cropped area from 24.19 ha at present to 27.16 lakh ha.

3. Additonal 49253 hectares cultvable waste land and 89099 hectares

of other fallow to be treated for inclusion at a later stage. 39000 ha to
be treated under watershed approach (21 district).

4. The additonal area being brought under cultvaton is presently cat-

egorised as Current Fallow.

5. Doubling the area under assured irrigaton from 1.57 Lakh Ha to 3.14
Lakh Ha. 50% of this through irrigaton potental created and 50%
through minor irrigaton investments proposed.

6. Present seed replacement rate is estmated at 10% in feld crops and

20% in vegetables. 100% seed replacement to be achieved during the
plan period. Apart from strengthening all the state seed farms, and con-
vertng 11 of them to comprehensive seed farms, seed 16 villages /clus-
ters (200 ha) are to be created for certfed seed producton. Assistance
will be given for developing seed processing.

7. Seed Producton : Seed villages may be set up under the overall su-
pervision of the KVK/Block authorites with community and NGO partc-
ipaton.
Page 26
 8. Seed testng labs to be set up in all districts to cope with the seed
testng requirements. It has been proposed to provide one seed testng
lab in each districts.

9. Soil & Water Testng Labs : District level Agricultural Testng Labs may
be set up in each District of the State.

10. Soil Health cards: It is an irony that soil health, which is the basic re-
quirement for agriculture has been neglected by the farming commu-
nity, more partcularly the small and marginal farmers basically due to
insufcient extension service. This has given lot of stress on the soil re-
serves of nutrients on account of wanton use of fertlisers without soil
testng. While soil health care would have to be given utmost care in
any agriculture development plan , it is envisaged that each farmer
need to be given " Soil Health Card" for his land which would contain all
required informaton relatng to pH factor, nutrient status, soil depth,
texture and structure, organic mater part from micro-biology, which
would help the farmer in making suitable applicaton of desired fertlis-
ers and micronutrients. Soil health card to be issued to all farm hold-
ings, however looking at the task involved it is proposed to cover 20%
of the holding during the plan period. 11. Mobile Soil Water Testng
Labs (Agricultural Testng Labs) and Farmer Schools. In additon to the
District level ATLs one mobile Soil and water Testng Lab per district 17
may be set up. These labs may also be equipped with farmer training
tools for creatng awareness, bringing informaton on seeds, market
prices, etc. as well as to collect feed back from farmers to fne tune sup-
ply side responses to meet demands as well as provide for
demand/need based planning.

11. Agricultural Statstcs Bureau : There is an urgent need to set up an

Agricultural Statstcal Bureau in the State to collect key statstc/infor-
maton on producton, productvity, inputs, income, food availability,
Page 27
prices and costs etc. so that the progress in the vital sector can be mon-
itored on an ongoing basis and to make planning and 27 executon fo-
cussed and meaningful. A token amount of Rs. 2 crore is budgeted in
the plan.
HISTORY OF FINANCING AGRICULTURE IN INDIA .

Finance in agriculture is as important as other inputs being used in agri-

cultural producton. Technical inputs can be purchased and used by
farmer only if he has money (funds). But his own money is always inad-
equate and he needs outside fnance or credit. Professional money
lenders were the only source of credit to agriculture tll 1935. They
used to charge unduly high rates of interest and follow serious practces
while giving loans and recovering them. As a result, farmers were heav-
ily burdened with debts and many of them perpetuated debts. With the
passing of Reserve Bank of India Act 1934, District Central Co-op. Banks
Act and Land Development Banks Act, agricultural credit received impe-
tus and there were improvements in agricultural credit. A powerful al-
ternatve agency came into being. Largescale credit became available
with reasonable rates of interest at easy terms, both in terms of grant-
ing loans and recovery of them. Although the co-operatve banks
started fnancing agriculture with their establishments in 1930’ns real
impetus was received only afer Independence when suitable legisla-
ton were passed and policies were formulated. Thereafer, bank credit
to agriculture made phenomenal progress by opening branches in rural
areas and atractng deposits. Till 14 major commercial banks were na-
tonalized in 1969, co-operatve banks were the main insttutonal agen-
cies providing fnance to agriculture. Afer natonalizaton, it was made
mandatory for these banks to provide fnance to agriculture as a prior-
ity sector. These banks undertook special programs of branch expan-
sion and created a network of banking services throughout the country
and started fnancing agriculture on large scale. Thus agriculture credit
acquired mult-agency dimension. Development and adopton of new
technologies and availability of fnance go hand in hand. In bringing

Page 28
"Green Revoluton", "White Revoluton" and "Yellow Revoluton" f-
nance has played a crucial role. Now the agriculture credit, through
mult agency approach has come to stay. The procedures and amount
of loans for various purposes have been standardized. Among the vari-
ous purposes "Crop loans" (Short-term loan) has the major share. In ad-
diton, farmers get loans for purchase of electric motor with pump,
tractor and other machinery, digging wells or boring wells, installaton
of pipe lines, drip irrigaton, plantng fruit orchards, purchase of dairy
animals and feeds/fodder for them, poultry, sheep/goat keeping and
for many other allied enterprises. Agricultural Credit System in India
Farmers get external fnancial assistance from two sources namely, i)
non-insttutonal or unorganized agencies, and ii) insttutonal or orga-
nized agencies. It is a fact that agriculture has been fnanced by non-in-
sttutonal agencies for a long tme and insttutonal agencies were
started functoning only during the early part of this century. Non-Inst-
tutonal Sources of Finance in India Non-insttutonal sources include
money lenders, land lords, traders, commission agents, friends and rel-
atves. i) Money Lenders There are two types of money lenders in rural
areas.

a) agricultural money lenders and b) professional money lender. Agri-

cultural money lender's main occupaton is farming and money lending
is secondary one. Professional money lender's main profession is
money lending. Although the reliance on money lender by rural poor
declined over the years, the credit disbursed by money lenders stll
forms a major porton of the total credit obtained by the farmers. Agri-
cultural money lender's main occupaton is farming and money lending
is secondary one while the Professional money lender's main profession
is money lending. Although the reliance on agricultural and professional
money lenders by rural poor declined over the years, i.e., from 80 per
cent of their total credit requirement in 1951 to 30 per cent in 2002,
the credit disbursed by money lenders stll forms a major porton of the
total credit obtained by the farmers. Advantages i. Unrestricted supply
Page 29
of credit for any purpose.. ii. Easy access by farmers as money lenders
maintain close relatonship with rural families. iii. Method of business
adopted are simple and fexible. iv. Timely availability of credit without
much formalites. v. Knowledge on local conditons and experience of
money lender facilitate his business. vi. Money lenders do not insist
upon any partcular type of security for the grant of loans. Unfair Prac-
tces of Money Lenders Money lenders deceive the farmers through
many ways such as: a. They manipulate bonds and promissory notes
obtained from debtors and enter large sum than actually lent.

b. They give no receipt for repayments and ofen they deny such repay-
ments.

c. They charge very high rate of interest .

d. They give loans for both productve and unproductve purposes

which results in indebtedness.

b) Reserve Bank of India, All India Debt and Investment Survey Report,
1961-62,1971-72, 1981-82, 1991-92 and 2003.

ii) Land Lords Small farmers and tenants rely on land lords for fnance to
meet out their productve and unproductve expenses. This source of f-
nance has all the defects associated with money lenders. Interest rates
are exorbitant. Ofen small farmers are forced to sell out their lands to
these land lords and they become land less labourers. Landless labour-
ers bonded labourers. The reliance on this agency by farmers has been
decreased over years, i.e., from 1.5 per cent in 1951 to 1.0 per cent in
2002.

iii) Traders and Commission Agents They are functoning either to get
regular supply of products for their trade or to have a control over the
provision of credit by other creditors. Though the rate of interest
Page 30
charged by them is not as high as charged by the money lenders, they
charge more in the form of concessions and service chages, They
mostly fnance for the cultvaton of commercial crops like sugarcane,
coton, ground-nut, tobacco, onion, etc. The share of credit provided by
these agencies to total credit decreased from 5.5 per cent in 1951 to
2.5 per cent in 2002.

iv) Relatves Farmers borrow from their relatves for temporary exigen-
cies. It is simply a mutual help. Since all farmers are living under similar
conditons, they can not lend large sums as loans. Normally, no interest
is paid on such loans. Although, the private agencies satsfed some of
the criteria of a good system of credit,their loan were not related to
producton purposes, they never cared for the end use of the loan ex-
tended and the loan is ofen used for wasteful purposes. However, in-
sttutons adopt a productve and purpose oriented credit policy while
providing credit. So this policy made the insttutons to discourage the
provision of credit to consumpton purpose. But it is evident that the
need for consumpton loan in rural households contnues to persist. As
the insttutons deny consumpton loans to farmer's, the non-insttu-
tonal agency contnues to dominate the rural credit system. Moreover,
the insttutonal agencies could not provide more than 60-65 per cent
of the total credit needs of the farmers. Therefore, the private credit
agencies should be brought under a more realistc system of state regu-
laton. Otherwise, the rural people would contnue to sufer from in-
debtedness in spite of various eforts taken by the government to uplif
their economic conditons. Their share has declined from 14.2 per cent
in 1951 to 7.1 per cent in 2002.

As compared to the quantum of credit requirement and the capacity of

insttutons to meet these credit demands under multagency system, it
is impossible to completely wipe out the private agencies from the rural
scene. The Banking commitee, (1931) and the Banking Commission
Page 31
(1972) ofered suggestons toget over the evil aspects of private lending
agencies and bring them under sound credit system.These suggestons
may be adopted tll the insttutonal agencies atain the capacity to
meet the full demand for credit.
The major insttutons supplying credit to agricultural sector are :

i) Government, ii) Cooperatves, iii) Commercial Banks, iv) Regional Ru-

ral Banks, v) Reserve Bank of India (Natonal Bank for Agricultural and
Rural Development)

i) Government The Government provides both direct and indirect f-

nance to farming sector. Direct Finance The government provides tac-
cavi loans in tmes of distress like famine, food, drought etc. Land Im-
provement Act of 1883 and the Agriculturists Loans Act of 1984 were
enacted to extend long and short term fnancial assistance to farmers
for agricultural development and also an relief measures during distress
tmes. Merits
1. They are granted for long period of tme.

2. Low interest is charged.

3. The repayment plan is convenient, i.e., repayment in equal annual in-

stallments. Demerits 1) Quantum of loan is determined an the basis of
value of security ofered, by which, large farmers receive more credit
than small and marginal farmers. 2) As these loans are not producton
oriented, they do not satsfy the standard needed for sound system of
form credit. 3) The loan amount is inadequate.

4) The land less labourers were lef out in the lurch at the tme of dis-
tress.

Page 32
5) The taccavi loans are not popular among farmers due to • inordinate
delay in sanctoning of loan. • impositon of irrelevant conditons. • in-
competent supervision • in convenient recovery methods.

Page 33