Book

Description

Agricultural finance is critical for an agriculture-dependent country like India because of its significant role in eradicating difficulties of investing in farming activities, better procurement of seeds and fertilizers which boost productivity, and improved technology. Agricultural finance is no less critical than other essential inputs involved in agriculture production components. Technical inputs can be procured and utilized by a farmer when he has access to funds. But his own resources would forever remain insufficient, and he requires credit from elsewhere. Insufficient formation of new capital has decreased the pace of technological interventions and development of infrastructure with opposing consequence on agricultural productivity. Though agriculture’s share in GDP has significantly shrunk, it doesn’t demean its significance to the Indian economy. Because, firstly, agriculture still is the largest employer (contributing over 60 per cent), and secondly, it is unique for creating demand in other sectors and is still an important indirect cog in the wheel of India’s GDP growth. Agriculture has to sustain a growth of at least 4 per cent for the economy engine to chug along at 9 per cent. Small and marginal farmers are imprisoned in the malicious cycle of poverty i.e., low returns → low saving → low investment → low return. To break this, credit must be injected into the agricultural sector. The subtle aim of this effort is to broad-base the decision-making authorities to approve appropriate investments in Indian agriculture, especially in this age of new jargons such as Climate Finance, Sustainable Finance, Green Finance, etc.