Agriculture, including agri-infrastructure and ancillary activities, accounts for 39.54 percent of total credit potential under the priority sector for the fiscal year 2023-24, while MSME accounts for 44.26 percent, according to NABARD Chief General Manager Usha Ramesh.
For the current fiscal year, the bank estimated Rs 2.47 lakh crore of credit potential under priority sector lending in the state. Noting that the West Bengal government's 'Duare Sarkar' (government at your doorsteps) scheme is one of the best programmes for improving financial outreach, she said the state authorities have taken a number of initiatives in recent years to foster multi-dimensional growth in the state's economy.
"However, these initiatives must be supplemented by adequate credit deployment and coordinated efforts of all stakeholders for West Bengal's faster and holistic development," Ramesh said.
She also stated that small-holding farmers, who account for 96% of the total farming community in West Bengal, face challenges such as low investment, low productivity, insufficient post-harvest facilities, and a lack of market orientation, in addition to the negative effects of climate change.
In this scenario, agricultural produce must be collected through Farmers' Producer Organizations (FPOs) to leverage economies of scale by conferring greater bargaining power, better market and price discovery, and access to credit and insurance. She also emphasised the importance of agricultural term loans for capital formation in the sector.
"Agriculture term loan must expand. I believe there is a trend in India where the emphasis is on short-term loans rather than long-term advances. "I hope that the Agriculture Infrastructure Fund will improve long-term agricultural loans," Ramesh said on the sidelines of a seminar.
The 'State Focus Paper: 2023-24' and 'Financial Inclusion Outreach in West Bengal 2022-23' were released at a credit seminar organised by NABARD.
West Bengal is a major producer of rice, jute, tea, vegetables, and fruits. Crop loans account for 64.28 percent of total agriculture credit and 25.42 percent of total priority sector credit potential, according to NABARD.
The housing sector accounts for 4.67 percent of the Rs 2.70 lakh crore credit potential for FY24, education loans account for 1.68 percent, social infrastructure accounts for 1.07 percent, and export credit and renewable energy account for 1.09 percent.
The developmental bank develops a potential-linked credit plan (PLP) for each district on an annual basis through a consultative process for planning and dispensation for priority sector activities. According to the statement, NABARD in West Bengal is working to strengthen rural financial institutions that serve the farming community. The bank is also planning telemedicine and smart education projects in Sundarbans, a UNESCO heritage site in West Bengal, under the rural infrastructure promotion fund, which is set to launch in March this year, according to Ramesh.
She added that some of the major initiatives, such as the establishment of an agriculture infrastructure fund, animal husbandry, dairy, and fisheries infrastructure schemes, the formalization of micro food processing units, incentivizing MSMEs, ethanol production, and renewable energy, could be strategically leveraged to accelerate growth in investment credit in the state.
