EXECUTIVE SUMMARY the Criticality of Capital Formation ‘In’ and ‘For’ Agriculture Need Not Be Over Emphasized
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PLP 2016-17 Chirang District EXECUTIVE SUMMARY The criticality of capital formation ‘in’ and ‘for’ agriculture need not be over emphasized. However, the recent declining trend in investment credit vis-à-vis crop loan has serious implications for sustaining capital formation. The theme selected for the PLP 2015-16 is “Accelerating the pace of capital formation in agriculture and allied sector”. The PLP maps the potential in priority sectors which could be exploited with institutional credit within a specified time frame. PLP are intended to provide a meaningful direction to the flow of credit to different sectors at the ground level taking into account all relevant factors. The various linkage and other support required to be provided by line departments to facilitate credit flow as planned are also listed in the PLP. CHIRANG district is one of the four districts of Bodoland Territorial Area District (BTAD) under the Government of Assam. It is bounded by the Kingdom of Bhutan on the North, Bongaigaon district on the South, Baksa on the East and Kokrajhar on the West. The district has 2 sub-divisions Kajalgaon sadar and Bijni civil subdivision and 3 blocks – Sidli, Borobazar and Manikpur. The district Head quarters is well connected with other parts of the state. According to the 2011 census Chirang district has a population of 481,818. This gives it a ranking of 547th in India (out of a total of 640). The district has a population density of 244 inhabitants per square kilometre (630 /sq mi). Its population growth rate over the decade 2001-2011 was 11.26%. Chirang has a sex ratio of 969 females for every 1000 males, and a literacy rate of 64.71%. The greater part of the area of the world famous Manas Wildlife Park falls in the district. Almost 50% of the district consists of foothills of Bhutan and the rest plain area with intermittent hillocks. The total geographical area of the district is 136926 Ha. The area under agriculture is 46767 Ha (42.52 % of total geographical area) and area under forest is 41037 Ha (37.31 % of total geographical area), which collectively cover 88722 Ha (79.83 % of total geographical area). As per the Census of India, 2011, the total population of the district is 481818 with rural population of 446290 (92.6% of total population). The agro climatic condition of the district is conducive for agriculture. The total number of land holding was 39986 covering an area of 47466 Ha. Out of total number of land holding 84% are small and marginal farmers owning land of 49% of total area (Agricultural Census, 2005-06). The institutional credit structure in the district comprises mainly of RRB (8 Branches), Commercial Banks (14 Branches). The total Bank branches operating in the district is 22, of which Assam Gramin Vikash Banks have the highest no. of Branches. The district has only1 Private Banks catering to the need of urban population. The CD ratio is 44% only for the district as a whole for the year ended 2014-15. The Policy Initiatives of the Government of India as announced during the Union Budget 2016-17 have been highlighted in Chapter I. Further, the State Government priorities as per budget announcement and other policy decisions affecting credit flow for agriculture and rural development have been given due coverage. The policy initiatives of the Reserve Bank of India and NABARD have been detailed for the reference of PLP users. In Chapter II, a gist of various ongoing Government Sponsored Programmes have also been highlighted. It is expected that this will serve as ready reckoner for the PLP users. The Base PLP projection (2012-17) for the year 2016-17 was estimated at ` 14472.50 lakh. However based on past few years GLC disbursement, operational constraints and others, this year projections have been updated and is estimated at ` 11723.05 lakh, comprising of ` 7999.97 lakh for Agriculture (` 4472.57 lakh for Crop Loans and ` 2471.65 lakh for Agri Term Loans), ` 2440.00 lakh for MSME Sector. The sub-sectoral projections for the year 2016-17 is given in page no 9. Crop Loan Paddy is the major crop grown in the district. Lack of irrigation facilities (especially during Rabi), poor electricity supply, and problems related to input procurement, absence of proper marketing facilities deplorable condition of rural roads etc., pose constraints. The projection for crop loan during 2016-17 is ` 4472.57 lakh. 1 PLP 2016-17 Chirang District Agriculture Term Loan Loans are also available to farmers for the activities other than seasonal agricultural operations, which are defined as loans more than 18 months repayment period. These loans are termed as Agriculture Term Loan or Investment Credit. The loans are given for purposes viz. Water resources, Animal Husbandry activities (Dairy, Poultry, SGP), Fisheries, farm mechanization, plantation and Horticulture etc. Under the head Agriculture term loan PLP projection of ` 2471.65 lakh has been fixed for the year 2016-17. Agriculture Infrastructure Agriculture Infrastructure Finance comprises of providing Bank loan for creation of Agriculture Infrastructure and its maintenance. The facilities are for construction of Cold storage, warehouses, market yard, godowns, silos and running of these units. Under the head PLP projection of ` 539.75 lakh has been fixed for the year 2016-17. Agriculture - Ancillary Activities According to the revised priority sector guidelines a new Agriculture sub head has been created. These include loans co-operative societies of farmers for disposing of the produce of members, Loans for Food and Agro-processing, loans to Bank loans to Primary Agricultural Credit Societies (PACS) and Loans sanctioned by banks to MFIs. Under the head PLP projection of ` 516.00 lakh has been fixed for the year 2016-17. MSME MSMEs are an important employment generating sector, especially in the backdrop of dwindling employment opportunities in the agriculture sector. Development of MSME helps in capital formation, growth of entrepreneurship among local people, reduced migration and ensures inclusive growth. Bank loans to micro and small enterprises in both manufacturing and service are eligible to be classified under priority sector. The industrial policy, of the state government, North East Industrial Promoting policy of GOI and MUDRA scheme may go a long way for industrial development. ` 2440.00 lakh is the projection under the sector for the year 2016-17. Education Education loan is a very important form of bank credit which is a boon for deserving and meritorious students who do not have ready resources for meeting the ever increasing cost of higher and technical education. As per the extant guidelines of RBI all loans to individual for educational purpose, including vocational courses, will be part of priority sector lending with a limit of ` 10.00 lakh. Under the head, PLP projection of ` 160.00 lakh has been fixed for the year 2016-17. Housing Constructing or purchasing a house demands a lot of resources and most of the people cannot still afford despite investing all their savings. Therefore, there is an urgent need for increasing credit flow to this sector. Considering this RBI has put housing as a separate sector under overall priority sector lending. Under the head, PLP projection of ` 768.00 lakh has been fixed for the year 2016-17. Renewable Energy Biogas being a renewable source of energy is user friendly and is a very good alternative source of energy. The Biogas & Manure Management Programme (BMMP) attaches great importance and priority to the use of Biogas. Under the head, PLP projection of ` 20.48 lakh has been fixed for the year 2016-17. Others According to the revised priority sector guidelines loans to SHGs, loans to distressed person, overdraft under PMJDY etc. are covered under “Others” as a separate sector under the overall priority sector loans. Under the head, PLP projection of ` 205.00 lakh has been fixed for the year 2016-17. 2 PLP 2016-17 Chirang District Social Infrastructure Under the head Schools, health care facilities, drinking water and sanitation facilities have now been brought under the ambit of PSL norms. Accordingly PLP projection for the year 2016-17 with an amount of ` 129.60 lakh have been fixed. Major Constraints and Suggested Action Points for State Govt. and Banking Sector The state government should give more importance to irrigation and power supply. Shortage of farm power is the main constraints to double or multiple cropping besides lack of quality power hinders the growth of micro, small and medium enterprises. Further, small land holding, availability of quantity ground water and rainfall concentration during monsoon provides more for minor irrigation. The existing canal irrigation systems are also not functioning well. Flood and O&M are the major hindrance for canal irrigation system. Hence, more emphasis should be given to the minor irrigation system. Private parties and Co-op societies may come forward for setting up cold storage and rural godowns with loan-cum-subsidy under the centrally sponsored schemes. The farmers may be made aware of different schemes of the government and banks. Extension service may be strengthened. Infrastructure Support Infrastructure provides an overview of infrastructure which is an index of the development status of an area or region. Indications are given to the State Government on the areas where investment in infrastructure would help in improving production in important sectors of the district’s economy. Also suggested in the chapter are lists of infrastructure components for which the State Government may consider for assistance under RIDF. Informal Credit Delivery System Efforts have been made to highlight innovative micro- Finance initiatives/ practices in the district. Further, for references of bankers a brief write up on a few well established NGOs involved in promotion of SHGs through micro-Finance, Joint Liability Groups (JLGs) have been discussed in chapter II.