NABARD for three-tier credit for rural areas
To start from regional rural banks, says chairman Thorat
The Hindu,
Friday, October 6, 2006.
Chairman of the National Bank for Agriculture and Rural Development (NABARD) Y.S.P.Thorat is in favour of a three-tier credit flow to the rural area with focus on micro-credit. The rural areas particularly rural cultivator families are not getting credit at the right time as well as in the right quantum making them largely dependent on unorganized sector credit.
Speaking to The Hindu after launching the Rural Habitat Development Scheme of the Sri Kshetra Dharmasthala Rural Development Project (SKDRDP) Dr.Thorat said that despite the efforts of the government the credit inflow to rural areas was far from satisfactory .51 per cent of the people in rural areas was do not get any credit from the organized sector of which 85 per cent of the farmers are small holders, which makes it even more difficult for the system to reach them credit.
The organized credit system can reach only 23 per cent of the farmers, which was not something that could be termed ‘healthy’ Dr. Thorat stated.
Infused credit
Starting that the NABARD and the government has infused credit into the system of small holdings in Maharastra where most of the farmers suicides were taking place, he said the ‘medicine’ takes some time to achieve its full ‘effect’ and the people should have patience and faith in the new credit system for rural development.
Though it was a challenge for the NABARD to reach credit to 51 per cent of the farmers in the country, Nabard had the resources, willingness and machinery to deliver it.
The three tier ‘effect’ should start from the Regional Rural Banks (RRBs) which have well carved out ‘command areas’ and functions, the second credit system already is in place in the co-operative sector and at the top end was the commercial banks which can play a big role in stabilizing credit flow.
After the formalization of the Vaidyanathan committee report the rural credit system will come into full fruition Dr.Thorat said.
He said the task appears to be daunting but ‘to extend’ ‘formal credit’ to 51 per cent of the rural areas, NABARD will now aim at synergising the flow through various levels of the banking industry. To arrive at a full credit flow to rural areas the industry should take a ‘dis-aggregated’look at the need for credit in rural areas he added.
Meaningful planning
He said the NABARD was looking at ‘meaningful district level planning in agriculture, on-farm activity and development of infrastructure in the rural areas.
Stating that the NABARD has studied the model of rural development and farming development by Andra Pradesh Dr.Thorat said he had traveled in the naxal infested areas of that state particularly Mehbubnagar and found out that the model works in perfect synergy with the community, NGOs and the government agencies.
Basic facilities in place
The level of involvement of people had brought in many basic facilities such as drinking water, electrification, roads and many other facets of life, which were absent in the past.
He said the NABARD would like to empower the people in the interior areas with their participation.
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