Nabard has projected a near-9 per cent rise in credit target at ₹2.7 lakh crore for priority sector lending in West Bengal during 2023-24 vis-a-vis the previous financial year. Agriculture sector including agri infrastructure and ancillary activities would account for nearly 40 per cent of the estimated credit potential while MSME (micro, small and medium enterprises) sector would account for nearly 44 per cent.

The SHG-JLG (self-help group, joint liability group) accounts for nearly 8 per cent; housing sector five per cent; education loans two per cent; social infrastructure sector around one per cent, and export credit and renewable energy making up the rest.

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As West Bengal is a leading producer of rice, jute, tea, vegetables and fruits, crop loan constitutes nearly 64 per cent of the total agriculture credit and close to 25 per cent of the total priority sector credit potential. Allied agriculture, agri infrastructure and agri ancillary constitutes about 22 per cent, 7 per cent and 6 per cent of agriculture credit, respectively. The share of agriculture term loan to farm credit is close to 41 per cent.

According to Usha Ramesh, Chief General Manager, Nabard, West Bengal Regional Office, the state government has taken a number of initiatives in the recent past to foster multi-dimensional economic growth. However, these need to be supplemented through adequate credit deployment and coordinated efforts of all stakeholders for faster and holistic development, she said.

“Small-holder farmers, representing 96 per cent of the total farming community in West Bengal, are faced with challenges of low investment, poor productivity, inadequate post-harvest facilities and weak market orientation, coupled with adverse impact of climate change,” she said at the State Credit Seminar organised by Nabard on Wednesday.

In this scenario, collectivisation of agricultural produce through farmer producer organisations (FPOs) is imperative to leverage economies of scale through greater bargaining power, better market price discovery, and access to credit and insurance. Besides, Nabard in West Bengal is working towards strengthening rural financial institutions, which serves the farming community by promoting primary agriculture credit societies (PACs) as multi-service centres, she said.

Major initiatives such as creation of agriculture infrastructure fund, animal husbandry, dairy, fisheries infrastructure schemes, formalisation of micro food-processing units, incentivising MSMEs, and production of ethanol and renewable energy, could be leveraged to accelerate growth in investment credit in the state, she added.

Focus paper

Nabard prepares a potential-linked credit plan (PLP) annually for each district through a consultative process for credit planning and dispensation for priority-sector activities. The PLPs map the potential available for priority-sector lending, taking into consideration the available resources, scope of economic activities, trends in credit deployment, infrastructure needs and market opportunities, among others. The sector-specific potentials are aggregated at the state level in the form of ‘state focus paper’ (SFP).

Apart from the sectoral credit potential, the SFP also identifies critical infrastructure gaps, other linkage support and key policy issues requiring interventions from stakeholders for the holistic development of the state’s agricultural and rural economy.

Keeping in view the national and state priorities for accelerating and sustaining agricultural growth and enhancing farmers’ income through market-led farm enterprises and job opportunities at local level, the credit projections have given special thrust to capital formation in agriculture and allied activities, sustaining and increasing productivity in agriculture, facilitating food and agro-processing activities, MSME and informal credit delivery systems (SHGs/JLGs).