Banks in J&K lag behind in agri sector lending

Banks in J&K have achieved just 31 percent lending target amounting to Rs 6,528 crore to the agriculture sector till the end of December 2020 against the annual target of Rs 20,770 crore.

According to official documents, the J&K Bank and the State Bank of India have achieved 41 percent and 55 percent target respectively as on 31 December 2020, while the other banks have been lagging behind.

“One of the reason for low performance is low performing Commercial Banks: PNB, HDFC Bank, ICICI Bank, JKGB & EDB having significant foot print in UT of J&K have poor achievement under Agriculture Sector, especially in Jammu, Baramulla, Anantnag, Pulwama and Shopian districts which have significant share in total agriculture credit target of J&K (sic),” the official document reads.

“Second reason attributed to poor performance is the performance of cooperative banks: ten Cooperative banks operating with 265 branches (with 165 rural branches) in J&K have disbursed Rs. 17.47 crore during the first three quarters of 2020-21 to agriculture sector, registering an achievement of 1.23 % viz-a-viz Annual Credit Plan target for 2020-21 (sic),” it reads.

“Though J&K has a huge potential under Allied Activities like Sheep/Goat, Poultry, Fisheries, Dairy Development, Bee Keeping, Mushroom Culture and Sericulture, but the share of credit to these sectors has so far remained low at 6% of total disbursement under Agriculture Sector,” it says.

According to the document, the insurance companies are “reluctant” to offer comprehensive and affordable products to cover such activities and the farmers do not find it viable to pay a huge premium amount to secure their respective activities.

It may be mentioned that the agriculture sector in J&K continues to be on decline.  Over the past decade, its contribution to the J&K’s gross domestic product (GSDP) has fallen by 8 percent.

According to the official figures, the share of agriculture to the GSDP has dipped from 28 percent to 16 percent, while industries (secondary sector) has stayed stagnant at 43 percent and the share of services (tertiary sector) has gone up to 57 percent in the past ten years.

Agriculture, which has been categorised as the weakest contributor, engages about 60 percent of the population, followed by the industries and services sectors.