Vol. 6, Issue 2, Part A (2024)

India's agricultural sector is a vital component of its economy, providing employment to nearly half of the population and contributing significantly to the country's GDP. However, the sector faces persistent challenges related to credit accessibility, which directly impacts productivity, modernization, and sustainability. This research review explores the evolution of India’s agricultural credit system from 2010 to 2024, focusing on key aspects such as accessibility, challenges, and reforms. Through an extensive analysis of the literature, the review highlights the disparities in credit distribution, emphasizing the divide between institutional and non-institutional credit sources. The reliance on non-institutional credit, despite the expansion of formal banking services, continues to be a critical issue, particularly for small and marginal farmers.
The review also examines the effectiveness of government policies and technological advancements, such as the introduction of digital financial services and schemes like the Pradhan Mantri Fasal Bima Yojana (PMFBY) and the digitization of Kisan Credit Cards (KCCs). These initiatives have shown potential in improving credit accessibility, but challenges such as the digital divide and regional disparities remain significant barriers. The literature reveals that while there have been improvements in the formal credit system, much work remains to be done to ensure that all segments of the farming population benefit equitably.
By synthesizing data from various studies and reports, the review identifies trends and gaps in the current agricultural credit system, offering insights into the implications for future policy development. The findings underscore the need for more inclusive financial products, better regulation of non-institutional credit, and continued innovation in digital financial services to enhance credit accessibility for India’s diverse farming community. The review concludes with recommendations for policy reforms and areas for future research to address the ongoing challenges in the agricultural credit system.