The National Bank for Agriculture and Rural Development (NABARD) has projected a target of Rs 2.98 lakh crore for financing agriculture, MSMEs, and other priority sector projects by lenders in the state in its Perspective Development Plan for Gujarat for the financial year 2023–24.
NABARD’s state focus paper, which Gujarat Chief Minister Bhupendra Patel unveiled, stated that “the credit potential for priority sector…has been assessed at Rs 2.98 lakh crore, which denotes an increase of 20% over the previous year.” A sizable 47.5% of the projected credit has been allocated to MSMEs (Rs 1.41 lakh crore).
The credit projections made for MSMEs and agriculture (Rs 1.27 lakh crore) are up nearly 30% and 13%, respectively, from projections made for 2022–2023.
“The agriculture sector in the state faces various challenges like low productivity, irrigation facilities, supply-chain gap, low mechanisation, high salinity, undulated landscape, etc. It is felt that some of these challenges can easily be tackled by making suitable strategies by the state government and putting these in place by involving all stakeholders like banks, line departments, voluntary associations etc,” stated Gyanendra Mani, chief general manager, NABARD.
In response to NABARD’s criticism of low crop productivity, the organisation notes that “skewed applications of fertilisers and pesticides, low seed replacement rates, and inadequacy of quality seeds are some of the major constraints” to achieving higher productivity.
“The increasing number of tenant or landless farmers or oral lessees and inadequate availability of institutional credit to them, hampers productivity levels. Banks need to explore Joint Liability Group mode of financing to tenant farmers,” stated NABARD, asking the state government to frame a policy to make tenant farmers eligible for institutional finance.
NABARD has advised the Gujarat state government to provide expensive machinery like tractors, rotavators, laser levellers, and harvesters through government departments, NGOs, or through PPP mode in order to lower the high cost of agricultural production in Gujarat.