Priority Sector Lending in Banks - Trends and Performance in India with Special Reference to Punjab

Abstract

Prio rity sectors form the fo undation and base-structure of an economy. Providing adequate financial aid to these important sectors can lead to development of an economy in real terms. These sectors include Agriculture, MSMEs, Housing, Education and other sections of an economy. Reserve Bank of India, since 1968 have specified separa te targets and sub-targets for priority sector lending, falling short of which funds are transferred to RIDF. The present study aims to analyse trends and performance patterns of priority sector lending at all India level and Punjab in particular from 2004-05 to 2017-18. Analysis has been done sector-wise, year-wise, bank-wise, state-wise, region-wise and district-wise. Priority sector lending has manifold benefits to uplift an economy and therefore this study analyses the trends and performance, pin-point the problem areas and suggests some policy implications to improve the lending to priority sectors.