NABARD loan: Karnataka got substantial allocation, says Prahlad Joshi

New Delhi: Dismissing Karnataka's allegation that the Centre has reduced NABARD loan to the state, the Union Food and Consumer Affairs Minister Prahlad Joshi on Thursday said that Karnataka is getting a substantial 11.2 per cent share in the total allocation of funds to the cooperative sector under Priority Sector Lending (PSL) shortfall funds by banks.

Regarding refinance to cooperative banks, the concessional refinance allocation is lesser this year consequent to the lesser shortfall amount in priority sector lending (PSL) by banks, Joshi said.

For Short Term Seasonal Agriculture operations (ST-SAO), the allocation has come down by 50 per cent from Rs. 50, 000 cr last year to Rs. 25, 000 crore for the current year. This has been allocated on a pro-rata basis to all states for availing of refinance under ST-SAO during the previous year.

There is no bias against any state while allocating the funds as far as this allocation is concerned. Consequently, all state cooperative banks will receive 50 per cent of the last year’s allocation, Joshi told media persons.

The final normative allocation to Karnataka was Rs 2, 800 crore for the current year. This amount can be increased based on the need of the cooperatives so that there would be no dearth of funds for cooperatives for agriculture loans, he said.

Dismissing allegations that the NABARD has reduced farm loans, Joshi said the agriculture loan target for the banking sector for the current financial year has been fixed at an ambitious level of Rs. 27.50 lakh crore.

In fact, the Ground Level Credit (GLC) flow to the agriculture sector has shown a substantial increase over the years as evident by the following table.

To ensure adequate coverage of farmers under the Kisan Credit Card (KCC), which is a Govt of India scheme for making available short-term loans to farmers at a 4 per cent rate of interest, a campaign for covering more farmers including tenant, animal husbandry, dairy and fisheries farmers under KCC is currently on.

Under KCC farmers will be eligible to avail of loans at 4 per cent up to Rs. 3 lakh and for loans up to Rs. 1.60 lakh no security is needed, he said.