Budget 2018: Agri-credit likely to increase to Rs 11 trn for better flow

The farm credit target is likely to be raised by a whopping Rs 1 trillion (Rs 1 lakh crore) to a record Rs 11 trillion (Rs 11 lakh crore) in the Budget 2018-19 to improve credit flow in the agriculture sector, according to sources.

In the current financial year, the government has kept a credit target of Rs 10 trillion (Rs 10 lakh crore). Of which, Rs 6.25 trillion (Rs 6.25 lakh crore) has already been disbursed in the first six months till September 2017, the government data showed.

"The government's priority is agriculture. There is a possibility that the credit disbursal target for the agriculture sector will further be increased to Rs 11 trillion (Rs 11 lakh crore) for the next financial year," sources said.

Since credit is a critical input in achieving higher farm output, the institutional credit will help delink farmers from non-institutional sources of credit where they are compelled to borrow at usurious rates of interest, they said.

Normally, farm loan attracts an interest rate of 9 per cent. But the government has been providing interest subvention to make available short-term farm credit at an affordable rate and help boost farm output.