By Bizodisha Bureau, Bhubaneswar, January 28, 2016 : The state-run refinance bank, National Bank for Agriculture and Rural Development (Nabard) has projected an overall credit potential of Rs 58,882.39 crore for priority sectors in Odisha in 2016-17, up by 23 per cent over the past year.

The State Focus Paper 2016-17 released by Chief Secretary AP Padhi on Thursday highlights credit potential for agriculture sector at Rs 32,207.90 crore, accounting for 54.7% of the overall potential. Credit potential under micro, small and medium enterprises [MSME] sector has been assessed at Rs 13,337.62 crore constituting 22.6% of the total priority sector.

Other sectors including export credit, housing, renewable energy and social infrastructure creation have a 22.7 per cent share in the total credit potential. The financial outlay against investments for addressing critical gaps in infrastructure development has been assessed at Rs 2,783.96 crore and will include sectors like irrigation, rural connectivity, rural electrification, storage facilities, agri infrastructure, animal husbandry and fisheries.

Padhi, nevertheless, had a dig at the banks for their reluctance in extending credit to priority sectors. The banks’ performance in increasing credit flow to the much-needy agriculture and allied sectors is quite abysmal. The larger picture in Odisha is that the share of commercial banks in credit flow to the sector is declining while that of the State Cooperative Banks is very high.

“Commercial banks are not coming forward under the excuses like bad borrowers. The entire State cannot be considered pariah under this excuse. There is a need to come forward with solutions for problems,” Padhi remarked.

Padhi quoted recent lecture by Dr Nachiketa Mor under the Odisha Knowledge Hub initiative, that the credit to deposit ratio is not reflecting the true picture and asked the banks to step up credit to priority sector.

“Credit should be linked to GSDP and the ratio should be 100 percent. But while Maharashtra has a credit GSDP ratio of 120 and National average is 70, in Odisha, it is ridiculously low at 10 per cent. In districts like Kandhamal, is it is as low as two per cent,” he observed.

He also took strong exception to the slow progress of financial inclusion in the State. “It is observed that only 10 per cent of the target given to banks for coverage of unbanked areas last year has been achieved till date. If a person has to go 25 km to access his account, what kind of financial inclusion is this?” he asked.

Chief General Manager, Nabard SK Kale said the State plan document has been prepared with intent to give focused attention to rural credit flow in the State. It indicates initiatives for enhanced production and productivity of agriculture on a sustainable basis, generation of employment and reduction of rural poverty through increased ground level credit, promotion of agribusiness, strengthening of infrastructure and creation of livelihood in rural farm and non-farm sector.

In the backdrop of severe drought affecting the State, the National bank has recommended formation of producer organisation, accelerated amendment of the Tenancy Act that would ensure financing of sharecroppers and revival of lift irrigation systems.

Among others, Development Commissioner and Additional Chief Secretary R Balakrishnan and Regional Director, RBI PK Jena also spoke.