Financial Inclusion through Kisan Credit Card SCheme in India- An Analysis of its Pedrformence

Abstract

Institutional credit plays a pivotal role in agriculture development. The Reforms have taken place in the credit delivery system in India. The government has introduced the new scheme known as "Kisan Credit Card" in 1998-99 with a view to ensure adequate, timely financial support and hassle free credit fo r farm ers enable them to purchase agricultural inputs. This study based on secondary data attempts to examine the financial inclusion in terms o f issuing KC Cards and amount deployed p er landholdings across the m ajor states in the Country. The study has found that there has been a significant increase in the issue o f KC Cards and amount provided under the KC C by all agencies in India. Compound annual growth rate o f KC cards and amount o f credit was higher in RRBs as against the SCBs in the country. The percentage o f KC cards distributed has significantly increased in the case of SCBs and RRBs, whereas in the case o f CBs it has declined during the study period. Distribution o f cards as a percentage to operational landholdings was more than 100 in Punjab, Haryana, Odisha and Andhra Pradesh, while it was lowest in Jammu and Kashmir in 2012. The average credit per operational landholding was the highest in Punjab, while it was the low est in Assam during the same period. Across different credit lending agencies, the average credit p er operational landholding sanctioned by SCBs was much higher as com pared to that of RRBs. The paper concludes that there has been an improvement in financial inclusion in terms of increased coverage o f farm ers and deployment o f institutional credit fo r agricultural production.