Impact Analysis of Institutional Credit on the Agricultural Output in India

Abstract

This paper examined the major contribution of institutional credit for agriculture development after the green-revolution period in India. The total institutional credit for agriculture registered a significant growth rate at 8.74 per cent. However, credit from RRBs grew at the highest growth rate at around 14 per cent in the last 50 years. The results showed that the share of Scheduled Commercial Banks had emerged as the dominant source of agricultural credit in India. In contrast, the share of commercial banks in the total credit declined over the period. The result of the regression model also showed that the overall institutional credit for agricultural and other institutional sources of agricultural credit (cooperatives, RRBs, and SCBs) was statistically significant for the overall agricultural output growth in India.