BLOCK-WISE CREDIT PLANNING AND DISBURSEMENT IN KOLLAM DISTRICT

Transcription

1 Chapter - 6 BLOCK-WISE CREDIT PLANNING AND DISBURSEMENT IN KOLLAM DISTRICT Growth with equity is one of the major objectives of the nation with regard to rural development. In Kerala, decentralization and participatory governance, has empowered the Local Self Government and institutions such as Self Help Groups (SHGs), Joint Liability Groups (JLGs) etc. in helping the rural people in the empowerment process 1. However, the regional inequalities in India remained largely unchanged during the 1980s but rose dramatically along with the introduction of the reform process. The per capita output under industrial and service sectors showed convergence before reforms and divergence afterwards 2. In Kerala the uneconomic size of the land-holding made the farmers to switch over to other occupation; and, a sizable number migrated in search of jobs. The increasing remittance received during 1970s, 1980s and 1990s led to a higher rate of growth, especially under service sector. This is generally known as remittance-induced tertiary sector- led growth. There is no convincing evidence on reform-led growth process, especially leading to equity 3. Increasing labour shortage and part-time farming with hired labour and decreasing social status attached to farming, especially for the cultivation of traditional crops like paddy which requires larger number of seasonal labour 4, traditional farming reflected a declining trend in Kerala. As a strategy to revitalize the sector and to address accelerated growth in local area, institutional credit agencies were directed by Govt. of India and apex level banks to ensure smooth flow of credit through the introduction of block level credit planning and the disbursements. The process has enabled financial inclusion of a good number of the less-privileged 5.

2 However, it did not achieve the desired results due to the relatively slow performance of the Co-operative Sector Banks and the lack of understanding of the Commercial Banks about the wide variety of credit requirements in Indian rural area 6&7. In a state like Kerala, the avenues for development mostly depend on the resource availability in a local area and the talent of the local people to exploit the same with the support services including bank credit. Lack of awareness on the above development opportunities result in poor or slow development. Often, the Government-led welfare programmes are highlighted as indices on development and marketed by politicians as India Shines etc. Researchers often highlight the need to move beyond the continuing tendencies and distinguish between economic development, provisions on social welfare & social development and paying minimal respect for sustainable approaches 8. Introduction of a series of development programmes to address the less empowered, especially the women, had created opportunities for increasing their participation, emergence of social re-engineering like SHGs/JLGs and instruments like Micro Finance and Micro Enterprises. In spite of the many drawbacks in implementation of these projects, significant benefits have started accruing for women through wider access to local employment at minimum wages and with relatively better working conditions 9. A perfect system on economic empowerment of the less privileged is yet to emerge. Even the much accredited Bengladesh Grameen Bank experiments have their own limitations in poverty eradication 10. It is observed that the findings from inside and outside Bengladesh contradict the current myth around the model. The model created a good opportunity for expanding the market for financial capital, thereby ensuring Commercial Banks spectacular success. However, it failed as a tool for poverty alleviation and empowerment of the women. 141

3 Directed institutional credit and Government spending on public goods such as health, education and basic infrastructure contribute to the growth of per capita Gross Domestic Products and poverty reduction 11. It is observed that reallocation of expenditure to raise share of public goods spending could on an average increase per capita GDP growth rate by up to 2.7 per-cent points, and reallocation of funds to increase the share of social goods expenditures could on an average reduce poverty head count index by up to 6.6 per-cent point. However, current safety net programmes do not seriously address many of the most urgently required factors like health etc 12. The above references and analysis indicate that a wide variety of development programmes targeted to specific groups and regions which are in progress in the local area. Along with such development programmes, banks through directed credit delivery system encourage entrepreneurs, farmers, artisans etc. to address capital formation and to timely address the agricultural production activities. Through the Lead Bank Scheme and with the support of NABARD through its Potential Linked Credit Plans (PLPs) attempts are made by the banks at the Block-Level to arrive at a need-based credit allocation programme every year. Block-wise Credit Planning For studying the credit planning process at the Block-level, an attempt has been made to study the Block-wise credit allocation process under various heads such as Agriculture, Allied Sector, Non-Farm Sector (NFS) and Other Priority Sector (OPS). The data for two points of time, viz and were analysed and results are given in Table

4 Table 6.1 Block wise Targeted Credit in Kollam During year and ` Lakhs Block Agriculture Allied NFS OPS Total Of which Govt. Prg: NPS No.Act. Amt. No.Act. Amt. No.Act. Amt. No.Act. Amt. No.Act. Amt. No.Act. Amt. No.Act. Amt. 1. Anchal Anchalumoodu Chadayamangalam Chavara Chittumala Ithikkara Karunagapally Kottarakara Mukhathala Oachira Pathanapuram Sasthamcottah Vettikkavala Total Total Source : District Credit Plans

5 It may be observed from the table 6.1 that during , the number of accounts targeted was at 3, 42,658. For meeting the credit needs of these accounts, ` crore was earmarked. During the number of accounts targeted was relatively less at 3, 34,996 and the total amount targeted for disbursement was at ` crore. Thus, both in the case of number of accounts and the amount targeted, there observed a fall during the 5-year period. Out of the ` crore targeted during , ` crore, (6%) was under Agriculture, ` 8.09 crore (2.2%) was for Allied Sector and ` crore (20%) was under NFS and the remaining ` crore was under OPS. Whereas, during the year out of the ` 210 crore targeted, ` crore (36%) was apportioned to Agriculture, ` 9.12 crore (4%) was apportioned to Allied Activities and ` crore, (9%) was targeted under NFS and the remaining ` crore was allocated under OPS. Thus, it may be observed that during the 5-year period, the importance given to Agriculture Sector had sizably changed from 6 to 36 per cent and the allocation made under OPS declined from 72 to 51 per cent. Similarly, the allocation under NFS also declined from 20 to 9 per cent. During the same period, the allocation under Allied Sector recorded a marginal increase from 2.2 to 4 per cent. The above data thus reflect that the allocation under the broad sectors underwent considerable changes based on the national priority and the directives given by apex level banking agencies like RBI and NABARD. In the case of the number of bank accounts under the four broad sectors, the increase was sizable under Agriculture during the 5-year reference period. It increased from 1,67,689 to 1,80,330 during the 5-year period. Whereas, during the same period, the increase in the number of accounts under Allied Activities was marginal and the number of accounts

6 under NFS increased considerably from 8,343 to 15,009. Under OPS, the number of accounts increased from 1,42,038 to 1,64,307 during the 5-year period. The data thus further corroborate the above inference that based on the direction of credit flow the target allocation under various sectors at the Block-level also seriously captured the objectives envisaged under the planning process. Out of the 3,42,648 accounts targeted during , the number of accounts envisaged under Government Programmes totalled 14,722 (4.3%). This was at a lower level at 10,259 accounts targeted during In the case of the allocation of funds under Govt. Programmes, a fall was observed. It decreased from ` crore in to ` 4.91 crore during Among the 13 blocks in Kollam district, the maximum number of accounts to be financed was envisaged for Ithikkara Block at 51,339 during This was followed by the allocation for Pathanapuram Block at 37,008, followed by the allocation for Vettikavala Block at 14,943. The lowest allocation of accounts during was for Karunagapally Block at 14,861. In the case of the number of accounts under agriculture during the year , the maximum allocation was for Sasthamcotta Block at 24,002. During the year Chadayamangalam Block got the highest allocation of accounts under agriculture totalling 28,700 followed by the allocation for Karunagapally Block totalling 21,219. In the case of NFS, the number of accounts allotted during ranged from 1,715 in Oachira block to as less as 263 accounts in Vettikkavala block. During the year the allocation under NFS ranged from 2,442 accounts in Mukhathala block to as less as 319 accounts in Oachira block. Thus, it may be seen that within the 5-year period itself, there was a large level of variation in the allocation of targets under NFS 145

7 among the blocks in Kollam district. Even within a block, the allocation varied sizably during the 5-year period. Among the four broad sectors, the allocation under OPS was relatively higher compared to the other three sectors in all the blocks. The number of accounts targeted during ranged from 32,822 in Ithikkara Block to as less as 3,897 accounts in Vettikkavala block. For administrative convenience, Kollam district is subdivided into 13 development Blocks. On an average each Block will be having five to seven Grama Panchayaths. Under the new Panchayath Raj System, the Grama Panchayaths (GPs) are having power and the elected members conceive and implement projects with the support of Govt. functionaries, Banks and Other Civil Forums like NGOs, Farmers Clubs, Artisans Guilds, Self Help Groups (SHGs) & their Federations, Joint Liability Groups (JLGs) etc. In order to strengthen this collective effort, the banking sector attempts block- level credit planning, ensures credit delivery, their regular monitoring to optimize the efficiency and also furnishes data/ information to apex level forums for monitoring the progress at Block, District and State levels. In this Chapter, an attempt is made to study the Credit Planning and Delivery System in Kollam district at the Block-level and Banks participation to achieve the directed objectives. For this purpose, the data available in District Credit Plans (DCPs) and Potential Linked Credit Plans (PLPs) were used. Focus was given on Bank- wise participation in the Credit Planning and Delivery System and their block- wise, sector- wise spread. An attempt is also made to study the block- wise monitoring mechanism followed by the banks to achieve the desired effectiveness in the credit delivery. In the following paragraphs, a brief write-up is given on each block, its 146

8 resources and infrastructure availability especially under agriculture. Anchal Block Anchal block is located at the highland region bordering Pathanapuram Taluk. The block is having eight panchayaths, viz. Kulathupuzha, Eroor, Alayamon, Anchal, Edamalackal, Karavaloor, Thenmala and Aryankavu. The block is having 951 sq.km. area and 2.1 lakh population, of which, 16 per cent belongs to SC/ST community. It has 45,500 household, of which, 23,900 (52%) are under BPL. Agriculture is the main economic activity of the block. About 15,000 cultivators and 25,000 agricultural labourers are available. rubber, oil palm, coconut, paddy etc. are the major crops cultivated in the block. Homestead farming is practised widely and banana, tapioca, coconut, arecanut, pepper and many other varieties of tuber crops, fruit-bearing trees like mango, jack fruits etc. are abundantly cultivated. The block is also having about 400 household/micro/small enterprises. About 5,000 people are engaged in this sector. In addition to above economic activities, about 5,000 people are engaged in trade/commerce and other service providing activities. The block is having a good network of banks. It has 19 branches of Commercial Banks, seven branches of Co-operative Banks and 12 primary level Co-operative Societies. State Bank of Travancore is the BLBC convener. It s branch at Anchal, shoulders these responsibilities. In order to study the block-level credit planning process, last 5 years data, i.e.from to were analysed. The details are given in table

9 Table 6.2 Credit Planning in Anchal Block from the year to Account in Nos. & ` Lakh Year Crop Loan M.I L.D F.M PH Others Total Agri Total Allied Total Govt. Prog: Grand Total No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt Source : District Credit Plans It may be observed from table 6.2 that the number of accounts planned for assistance decreased from 29,201 in to 22,971 in During the 5-year period there observed a marginal decrease in the number of accounts planned for assistance. However, the decrease was only marginal. During the same period, there observed a sharp fall in the credit allocation especially during the year and The credit allocation which was at ` 1,051 lakh during fell to ` 626 lakh during and to ` 635 lakh during Subsequently, it has increased marginally to ` 998 lakh during and to ` 1,162 lakh during Thus, in the overall credit planning process, in the case of total number of accounts planned for assistance and the amount allocated for credit disbursements, the desired steady increase was not observed in 148

10 Anchal block during the 5-year period covered under the study. The same declining trend in the number of accounts to be assisted also was observed in Total Agriculture Advances and accounts planned for assistance under Allied Activities. However, in the case of Govt. Programmes, there observed an increasing trend in the case of total number of accounts to be assisted during the first 5-year period. During the terminal year , the fall in allocation was again observed. In the case of the total quantum of credit, the desired increasing trend was not observed in all the major three sub-sectors. Thus, the credit planning process in Anchal block warrants a serious study by the Block-Level Bankers Committee (BLBC) to ensure a steady increasing growth in the credit delivery. In order to have a closer look on the Credit Planning Process in Anchal block, the credit allocation under major captions like Crop Loan (CL), Minor Irrigation (MI), Land Development (LD) Farm Mechanization (FM), Plantation and Horticulture (PH) and Others were analyzed during the 5-year period. The results once again reflected either a stagnating trend or a marginal decreasing trend. In the case of Crop Loan, the number of accounts planned for assistance during the year was at 20,924. It marginally fell to 19,259 during the year , again declined to 15,843 during and further fell to 15,696 during However, the number of accounts planned for financing during the year increased to 16,998. The marginal declining trend may reflect the relatively lesser importance given in credit allocation without realizing the ground realities. However, in the case of total quantum of credit allocated for Crop Loan a steady increasing trend was observed. It has increased from ` 331 lakh in to ` 756 lakh during The increase in Scale of Finance for major crops resulted in the steady increase in the overall quantum of credit allocation in Anchal block under Crop Loan. 149

11 In the case of MI, LD, FM, PH and others the same marginal declining trend in the total number of accounts planned was observed. In the case of MI, the number of accounts planned decreased from 816 during to 264 during In the case of LD it declined from 862 to 672, FM 101 to 36, PH 2,163 to 1,760 and in the case of Others it declined from 750 during to 229 during In all the five cases, a corresponding fall in the credit allocation was also observed. The analysis thus clearly indicated that the credit planning process in Anchal block was not in accordance with the expected levels to achieve accelerated growth process as envisaged by Government of India. In spite of a large network of branches of Commercial Banks (19), Co-operative Banks (7) and Primary Level Co-operative Credit Societies (12), the Credit Planning and Delivery mechanism prevailing in Anchal block collectively could not ensure the national-level planned accelerated growth in the credit delivery system. The decreasing trend in the capital formation process under the traditional investments like MI, LD and FM etc. can be one of the reasons for the decelerating trends in the credit delivery and resulting slow growth in agriculture and rising prices of food items. It may be also due to the lag in picking up the avenues under value addition in Agriculture and Allied Activities. A more careful and conscious effort by banks, development departments and agencies addressing accelerated economic growth within the block is warranted to ensure the desired growth process in the credit delivery mechanism in Anchal block. Anchalumoodu Block It is located in the northern side of the district and consists of two panchayaths, viz. Thrikkadavoor and Thrikkaruva. It has a small area measuring only 54 sq.km. The block has 1.6 lakh populations, of which, about 10 per cent belong to SC/ST community. The block has about 150

12 32,800 household of which 43 per cent belong to BPL. coconut, tapioca, vegetable, banana etc. are the major crops raised under homestead farming within the block. The block is having about 50,000 workers, of which, about 2,000 are cultivators, 5,000 agriculture labourers and about 15,000 are engaged in non-farm sector. The block has about 1,500 household industries. Nearness of Kollam Corporation works as a potential market for industrial products. The block has moderately well developed trade, commerce and service sector absorbing around 7,000 people. The block has four branches of Commercial Banks, two branches of Co-operative Banks and 11 Co-operative Societies. SBT s branch at Thrikkadavoor is the convener of BLBC. The credit planning process attempted by BLBC in Anchalumoodu block during the last 5-year period from to is given in Table 6.3 Table 6.3 Credit Planning in Anchalumoodu Block from to Account in Nos. & ` Lakh Year Crop Loan M.I L.D F.M PH Others Total Agri Total Allied Total Govt. Prog: Grand Total No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt Source : District Credit Plans Similar to Anchal block, in Anchalumoodu block also showed a decelerating trend in the Agricultural Credit Planning Process. The total number of accounts planned for assistance during was at 13,

13 It decreased to 10,896, 12,328, 6,650 and 4,195 accounts during , , and respectively. During the same period, in the case of credit allocation also the desirable increase is not reflected. The overall credit allocation in the Block was at ` 109 lakh during It has increased marginally to ` 128 lakh during and further increased to ` 470 lakh during However, during the year , the credit allocation fell to ` 179 lakh and subsequently to ` 122 lakh during the terminal year, Thus, both in the case of the total number of accounts planned for credit delivery and the amount allocated also observed a decreasing trend in Anchalumoodu block during the last 5-year period. In the case of Crop Loan, the total number of accounts planned for assistance decreased from 11,022 in to 2,753 accounts during In the falling trends a lot of inconsistencies were also observed in credit allocation under Crop Loan. While the allocation was at ` 62 lakh during , it fell to ` 41 lakh during and further increased to ` 107 lakh during , then drastically fell down to ` 75 lakh during ; and, subsequently a marginal increase was recorded at ` 78 lakh during Reasons for such inconsistencies could not be explained by the senior officers when contacted by the investigator. It appears that more concerted efforts are required from the credit planners to address the regional credit requirements and to achieve the envisaged accelerated growth process. An analysis of the credit allocation under various sectors like MI, LD, FM, PH and Others also reflected similar decelerating trends. In the case of MI, the total number of accounts planned during was 309 cases. It fell down to 176 cases during the 5-year period. The total allocation under MI also fell from ` 5 lakh during to ` 3 lakh during The total number of accounts planned under LD, first declined from 80 to

14 cases during the first 3 years; and further increased to 224 and 227 during the year and respectively. Credit allocation under this activity increased from ` 2 lakh to ` 12 lakh during the 5-year period. Under FM, both in the case the of number of accounts planned and resources allocated a drastic declining trend was observed up to However, it increased sizably to ` 13 lakh during the terminal year In the case of PH, the allocation recorded a sizable increase during the year The number of accounts during the year was 510 and the allocation totalled ` 26 lakhs. Compared to the allocation of ` 5 lakh during , the allocation during was considerably high. Here again, the reason for the higher allocation might have happened due to the larger demand felt for new investments with the help of the commodity boards through certain incentives. In the case of the credit allocation under other activities, marginal declining trends both in the case of number of accounts and in the resource allocation were observed. The number of accounts decreased from 21 to 15 during the 5-year period and the amount also decreased from ` 1 lakh to ` 0.3 lakh. The data thus reflected declining trends in the credit allocation process in Anchalumoodu block in all the important activities. Presence of four branches of Commercial Banks, two branches of Co-operative Banks and 11 PACS reflected the large potential for the banking business in the block. However, their presence did not help the block in the desired increasing trends in credit allocation and disbursement. It appeared that these Banks focused more on mobilization of locally available resources through attractive saving schemes and siphoned them off to metros for more attractive business. Scant attention is paid on the stipulated Credit Planning and Delivery mechanism in Anchalumood block. 153

15 Chadayamangalam Block The block is situated at the south-eastern side of Kottarakara taluk and has an area of 249 sq.km. Chithara, Kadakkal, Chadayamangalam, Ittiva, Velinalloor, Elamadoor and Nilamel are the 7 Panchayaths in Chadayamangalam block. Agriculture is the major activity in the block and out of its 2 lakh population, 12 per cent belongs to SC/ST community. The block has about 42,600 households, of which, 47 per cent are under BPL. About 58,000 people are workers and among them 14,600 are cultivators and 22,000 are agricultural labourers. Workers engaged in trade/commerce and services approximate about 5,000; and about 1,500 are engaged in construction work. The block is having 11 branches of Commercial Banks, six branches of Co-operative Banks and seven Co-operative Societies. Indian Bank at Chadayamangalam is the BLBC convener. Detail of the credit planning process in Chadayamangalam Block is given in table 6.4 Table 6.4 Year Credit Planning in Chadayamangalam Block from to Rs in Lakhs Crop Loan M.I L.D F.M PH Others Total Agri Total Allied Total Govt. Prog: Grand Total No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt No. A/c = Number of Accounts Source : District Credit Plans 154

16 It may be observed from the table that in the case of the total accounts targeted for finance and in the case of Credit Allocation, there observed a general increasing trend during the initial years covered under the study. However, after , a marginal decline in the allocation was observed. The total number of accounts planned for assistance increased from 27,377 during to 33,682 accounts during A corresponding increase in the targeted credit was also observed during the two years. However, the number of accounts allocated marginally fell down to 30,196 and 26,586 during the subsequent years, and However, the allocation during was at a marginally higher level at 32,931 accounts involving a credit assistance of ` 1,001 lakh; and, the per account allocation averaged at `3,040. Compared to the low per account allocation at ` 376 during , the allocation at ` 3,040 appeared promising. Out of the average number of accounts planned to assist (30,154) during the reference period, 83 per cent (25,237) was under Agriculture, six per cent (1,895) was under Allied Activities and the remaining 11 per cent was under Govt. Sponsored Programmes. In the case of the accounts targeted under Total Agriculture, there observed an increasing trend during the first two years; however, it declined during the remaining the two-year period and further increased during the terminal period, During the same period, there observed a steady increase in the allocation of the total quantum of credit under Agriculture. It increased from ` 1,252 per account during to ` 2,665 per account during During the same period, the per account allocation under Allied Sector recorded a marginal increase from ` 1,545 in to ` 2,200 during Thus, the per account allocation of credit in Chadayamangalam Block appeared to be too low both at the beginning and terminal years. 155

17 In the case of Crop Loan, the total number of accounts planned for assistance increased from 18,403 in to 22,218 during The per account allocation of credit averaged ` 1,130 during the base year; and, it averaged ` 2,714 during the terminal year , recording a sizable increase in the per account credit allocation under Crop Loan. However, this amount was also observed to be inadequate to carry out the agricultural operations even in small land- holdings. This point draws attention of the policy makers. Senior bank officers at the District level are to be encouraged to draw inference from the data /information and translate the national credit policies for the desired changes. Presently the process is left with the Lead Bank and the representative of NABARD at the district level. The process appeared to be less effective in Kollam district. In the case of Minor Irrigation, the block- level credit plan envisaged to finance on an average 796 accounts involving on an average ` 10.4 lakh. However, the per account credit allocated appeared to be as less as ` 1,307 only. This appeared to be too inadequate to take up investments under MI following the unit cost adopted by the same bankers forum. The total amount allocated under MI during the base period was at ` 8 lakh only and it increased marginally during the year and fixed at ` 11 lakh for financing 556 investments and the per account allocation worked out at ` 1,978 only. In the case of investments under Land Development, the BLBC proposed to finance 5,874 accounts during the 5-year period, averaging 1,175 accounts per year involving an average amount of ` 31 lakh per year; and the per account allocation at ` 2,638. This amount also appeared to be too low to take up land development activities even in small holdings when we relate the same with the prevailing wage rates for agricultural labourers in Kollam district. Under FM, the Block-level forum planned to assist 1,045 cases during 156

18 the same period involving ` 23 lakh and the average per account worked out at ` 2,200 only. The number of accounts targeted to be assisted under FM recorded a non-symmetric trend starting from 192 cases in the base year to 236 cases in the terminal year. Absence of any systematic trend in allocation of the credit programme reflected the inconsistencies happening in the Credit Planning Process under FM in Chadayamangalam block during the reference period. Almost similar trends were reflected in the case of PH and for the items under Others. The analysis further corroborated that there is an urgent need for a serious treatment of the subject in Chadayamangalam block. Chavara Block Chavara is a coastal Block and is located on the southern part of Karunagapally Taluk. It has an area of 75 sq.km. Chavara, Panmana, Thevalakara, Neendakara and Tekkumbhagom are the 5 Panchayaths in the Block. The coastal area of the Block is rich in minerals. Indian Rare Earths, Kerala Premo Pipe Factory, Kerala Minerals and Metals and Titanium Factory are located in the Block. It has a good number of small scale industrial units located in two mini- industrial estates. Agriculture, fish capturing & processing and coir making are the major occupations in the Block. Out of its 15 lakh population, people belonging to SC/ST community is less than one per cent. Out of the total 3 lakh households, about 57 per cent are under BPL. The Block is having more than 4 lakh male workers engaged in traditional industries like coir making, capture & processing under fisheries. The cultivators constitute less than one per cent and people engaged in Non-Farm Sector constitute around four per cent. The workers engaged in trade and commerce also constituted around one per cent of the total workers. Majority of the population is classified under non- workers category, engaged in various services and professions. The Block has eight branches of Commercial Banks, two branches of Co-operative Banks and seven Co-operative Societies. Indian Bank, 157

19 Thevalakara, is the convener of BLBC. The Block-level Credit Planning Process for 5-year period from to is presented in table 6.5 Year Source : District Credit Plans Table 6.5 Crop Loan M.I L.D F.M PH Others Total Agri Total Allied Total Govt. Prog: Grand Total No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt No. A/c = Number of Accounts Credit Planning in Chavara Block from to Rs in Lakhs A perusal of the table 6.5 brings out the following highlights. In the case of total number of accounts targeted for credit assistance and in the case of total credit apportioned, a gradual decreasing trend was observed. The total number of accounts planned for assistance decreased from 18,844 in to 12,172 accounts during During the same period the targeted credit also recorded a declining trend. It decreased from ` 787 lakh to ` 395 lakh. During the reference period, on an average 14,173 accounts were planned to assist per annum with an assistance of ` 538 lakh. The per account credit assistance averaged ` 3,796. In the case of Crop Loan, a larger decline in the credit planning process was observed in respect of the number of accounts planned to assist. During BLBC Chavara planned to assist 13,828 accounts involving ` 131 lakh, and per account assistance averaging at a low level of ` 947 per 158

20 account. The number of accounts planned to assist under Crop Loan over time declined and during the year they planned to assist 8,877 accounts involving ` 270 lakh and average per account assistance working out at ` 3,042. Thus, it may be observed that lot of inconsistencies in the planning process have cropped up in the allocation of credit under Crop Loan in Chavara block. For capital formation process, the credit allocation gave importance to MI, LD, FM and PH. During the base year, under MI 1,083 accounts were planned for assistance involving ` 32 lakh. During the subsequent years the allocation under MI recorded significant decreasing trends. During the terminal year the total number of accounts planned was at 70 involving a credit assistance of ` four lakh only. In the case of the credit planning process under LD, an increasing trend was observed in Chavara block during the reference period. From the base year allocation of 81 accounts the allocation at the terminal year was at 430 accounts involving ` 15 lakh. In the case of Farm Mechanization, a fluctuating trend in the resource allocation was observed during the 5-year period. During , it was planned to assist 137 borrowers with a meagre sum of ` two lakh; and the average per account assistance at ` 1,460 only. This point also draws serious concern from the policy makers in ensuring a better credit flow for enabling the farm mechanization process in Chavara block. Under PH, the credit planning recorded an increasing trend both in the number of accounts and the amount of credit apportioned for disbursement. During the base year, it was proposed to finance in 100 cases; and, during the terminal year it was targeted at 479 cases involving `36 lakh; and, the per account assistance averaged at ` 7,516. Here again, the average credit amount planned for disbursement under PH appeared to be too low to meet the general credit requirement for capital formation process under PH. 159

21 In Credit Allocation under Allied Activities also the usual declining trend was observed. During the base year, BLBC planned to assist 2,251 beneficiaries with a credit assistance of ` 294 lakh; with an average assistance of ` 13,060 per account. Whereas, during the terminal year the allocation was for 1,168 accounts involving ` 33 lakh only. The per account assistance during the terminal year averaged at ` 2,825. The data thus reflected, that compared to the assistance extended per account in the case of MI, LD, FM and PH, the per account assistance planned under Allied Activities was relatively higher. The reason for the same is also worth probing. In the case of Govt. Sponsored Programmes, a sizable decrease in number of account and the amount planned for assistance were observed. During the base year, BLBC proposed to assist 1,178 borrowers under Govt. Programmes involving ` 217 lakh. The per account assistance averaged ` 18,421. During the terminal year , the forum planned to assist 898 beneficiaries involving ` 34 lakh; and, per account assistance averaging at ` 3,786 only. The data once again reflected larger distortions. During the reference period, the banks planned to assist on an average 841 beneficiaries per annum involving an average credit assistance of ` 12,400. Compared to the pattern of financing under agriculture, especially for the capital formation process, the credit allocation under Allied Activities and Govt. Sponsored Programmes appeared to be relatively better in Chavara Block during the reference period of the study. Government s interest to assist BPL and the bankers limited commitments to lend for capital formation under agriculture appeared to have resulted in the neglect of this sector. The process may have further triggered changes in cropping pattern, labour migration and occupational shift of farm families to other yielding activities/ sectors. Chittumala Block The Block is located at the North-eastern side of Kollam Taluk. 160

22 Munroe Island, East Kallada, Perayam, Kundara and Perinad are the five panchayaths sharing the total area, 77 sq.km. The block is dominated by lateritic and alluvial soil. It is predominantly agrarian and coconut, paddy, cashew, pepper, tapioca and banana are the main crops cultivated. In addition to agriculture, capture fishery also engage a sizable number of its total population of 1.2 lakh. The block is having 16 per cent of SC/ST population. It has 23,800 households; of which, 46 per cent are under BPL. The workers totalled 35,000 and non-workers, 80,000. The workers engaged in construction totalled 1,100 and workers engaged in trade/services totalled Chittumala block is having seven branches of Commercial Bank and three branches of Co-operative Banks and eight Co-operative Societies. Indian Bank, Keralapuram is the BLBC convener. Details of the credit planning process attempted by BLBC in Chittumala block are given in table 6.6 Year Source : District Credit Plans Table 6.6 Crop Loan M.I L.D F.M PH Others Total Agri Total Allied Total Govt. Prog: Grand Total No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. Rs in Lakhs No. A/c = Number of Accounts Credit Planning in Chittumala Block from to Rs in Lakhs The total credit allocation process in respect of the number of accounts planned to assist and the amount of credit apportioned during the 5- year period from to , decelerating trends were observed. As against the plan for coverage of 33,438 accounts involving ` 467 lakh 161

23 during , the number of accounts planned during was at 8,364 involving only ` 320 lakh. The per account assistance averaged ` 1,397 and ` 3,826 during the initial and terminal year respectively. In Chittumala block, BLBC planned to assist 20,287 beneficiaries per year with an average credit assistance of ` 2,186 per account. Under Crop Loan, the bank planned to assist 20,892 beneficiaries with a total credit assistance of ` 273 lakh. The per account assistance averaged ` 1,307 only. During , the forum planned to assist 5,778 beneficiaries involving ` 234 lakh credit assistance. The average credit assistance worked out to ` 4,050 per account. During the reference period, BLBC on an average planned to assist 11,871 beneficiaries under Crop Loan in Chittumala block. Though the number of farmers assisted per year appears satisfactory, the average amount planned per account for assistance appeared to be very less at ` 1,902. With this amount how a farmer can carry out farm operations during a year is a subject of serious concern and worth probing by all concerned. Though the simple average has its own limitations and may hide many vital factors, it can be used for drawing the attention of the policy makers, especially on the adequacy of the credit assistance to address farming operations. Under Minor Irrigation also similar declining trends were observed. As against the targeted 1,327 cases during the base year, BLBC proposed only 94 accounts to be assisted under MI during involving ` 2 lakh. The per account credit assistance planned under MI during the 5-year period averaged ` 2,109 only. In the case of LD, there observed a drastic decrease in the number of accounts proposed for finance during the 5-year period. It fell from 927 during the base period to 208 during the terminal year. The per account assistance averaged ` 1,770. It was only ` 1,187 during the initial year; 162

24 and, ` 6,730 per account during the terminal year, The trend of financing small amount per account and declining trend in assistance as usual was also reflected in the case of LD in Chittumala Block. Under FM, the bank proposed to assist 78 cases during the 5-year period involving ` 10.3 lakh. The per account assistance averaged ` 13,205. However, from the year onwards, a sizable decrease in fund allocation under FM in Chittumala Block was observed. Under PH, the bank has planned to assist 4,868 cases during the 5-year period involving the credit assistance of ` 124 lakh. The per account assistance envisaged was worked out at ` 2,547 only. This was at ` 1,243 during and ` 2,649 per account during Even though there was an increase in the per account assistance planned under PH over time, the quantum of amount appeared to be insignificant to develop investments under Plantation and Horticulture. The credit planning process under Allied Activities in Chittumala Block also reflected declining trends both in the case of number of accounts for assistance and the amount earmarked. BLBC planned to finance 5,914 cases under Allied Activities involving ` 90 lakh during the base year, The per account assistance worked out at ` 1,522. During the year , BLBC envisaged to assist 320 beneficiaries under Allied Activities involving ` 22 lakh. The per account assistance worked out at ` 6,875. During the 5-year period, the bank together planned to assist 12,802 cases with a credit assistance of ` 218 lakh. The average per account envisaged was at ` 1,703 only. Under Allied Activities, Dairy Animals, a unit of Sheep/ Goats, Commercial Poultry Units, Household Poultry Unit, Piggery etc are included for credit delivery. The allocation of credit does not match with the requirements. Bankers in general were unable to explain such anomaly. 163

25 In the case of total number of accounts planned to assist under Government Programmes also the declining trend was observed. While BLBC planned to assist 2,732 cases involving ` 38 lakh during , the forum aimed at a limited target of 593 cases involving ` 11 lakh during the terminal year. The per account assistance worked out at ` 1,855 only. The analysis, thus once again throw light on the need for careful examination of the present block-level planning process happening in credit delivery system. Ithikkara Block It is located on the South-east part of Kollam Taluk. The block has 135 sq.kms. and six panchayaths, viz. Chathannoor, Kalluvathukkal, Nedumpana, Paravoor, Poothakulam and Adichanalloor. Agriculture continues to be the major economic activity. Coir, khadi and handloom spinning, weaving and trading engage a sizable number of population. The Block has 1.9 lakh population, of which, eight per cent constitute SC/ST. The block has 3.7 lakh households, of which, 41 per cent is under BPL. Out of the total workers, 0.5 lakh are cultivators and constitute 17 per cent. Agricultural labourers constitute 30 per cent and Non-Farm workers constitute 20 per cent. The remaining 33 per cent is engaged in household industry like trade/commerce / services and in construction industry. The block has 14 branches of Commercial Banks, three branches of Co-operative Banks and 14 Co-operative Societies. Indian Bank s branch at Paravoor is the BLBC convener. With the above strong infrastructure under the banking sector, the BLBC addressed the block-level Credit Planning. Details are given for the 5-year period from to in table

26 Table 6.7 Year Credit Planning in Ittikkara Block from to Rs in Lakhs Crop Loan M.I L.D F.M PH Others Total Agri Total Allied Total Govt. Prog: Grand Total No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt No. A/c = Number of Accounts Source : District Credit Plans Following inferences are drawn from the data: In Ithikkara Block, the banking sector planned to assist on an average 20,770 accounts per annum involving on an average ` 343 lakh. The per account assistance averaged ` 330. The number of accounts proposed to assist decreased from 23,988 during the base year to 17,822 accounts during the terminal year. Out of the total 23,988 accounts during the base year, 17,100 accounts (71%) were under Crop Loan. Under Crop Loan, the BLBC on an average planned to assist 14,944 accounts per year with an average credit assistance of ` 1,764. In the case of the total number of accounts planned for assistance under crop loan over time reflected decreasing trends. While BLBC planned to assist 17,100 accounts under crop loan during , it could plan for assistance only in the case of 14,037 accounts during the year This happened when the nation was planning for doubling the farm credit for both production and productivity increase. 165

27 Similar declining trends were also observed in the credit planning process for capital formation under agriculture through MI, FM and Other activities; whereas, in the case of LD and PH increasing trends were observed. In the case of Allied Activities, the BLBC planned to finance on an average 1,631 cases per annum involving an average credit assistance of ` 1,717 per account. The usual decreasing trend in number of accounts targeted for credit assistance was observed under Allied activities also. While BLBC envisaged assisting 2,079 accounts under Allied Activities during , it could plan to assist only 1,013 accounts during the terminal year Thus, similar to the Block- wise observations made above, a decreasing trend in the Credit Planning process both in number of accounts to be assisted and total volume of credit to be disbursed per account, were reflected in Ihtikkara Block during the 5-year period. Karunagappally Block Karunagappally Block is located on the northern side of Kollam district. It has an area of 90 sq.km. Alappad, Karunagappally, Thodiyoor, and Mynagapally are the four panchayaths in the block. It has a long coastal line and the National Highway, NH 47 passes through the Block connecting Kollam and Alappuzha. The Block is predominantly agrarian. Among small industries, brick making, making of cement rings for small wells, manufacturing of small engineering and electronic items dominated. Out of its 1.8 Lakh population, 8 per cent belonged to SC/ST community. The Block has 0.8 lakh households, of which, 50 per cent is under BPL. It has a large number of non-workers at 1.2 lakh. The cultivators totalled around 5,000, agriculture labourers about 96,400, Non-Farm labour 11,400 and 166

28 workers engaged in construction totalled 1,770. The block has 12 branches of Commercial Banks, three branches of Co-operative Bank and four Co-operative Credit Societies. Indian Bank, Karunagappally is the BLBC convener. Details of the Credit Planning process in the block for the period from to is given in table 6.8 Table 6.8 Year Table 6.8 Credit Planning in Karunagappally Block from to Rs in Lakhs Crop Loan M.I L.D F.M PH Others Total Agri Total Allied Total Govt. Prog: Grand Total No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt No. A/c = Number of Accounts Source : District Credit Plans A perusal of the table indicated that there was avoidable limitations in the Credit Planning Process in Karunagappally block. As against the total number of 19,043 accounts planned for assistance during the base year , BLBC kept a higher target of 24,131 accounts for credit assistance during the terminal year However, during the year the forum kept a lower target. The reason for the same appeared arbitrary and failed to support with logistics. On an average, BLBC planned to assist 17,380 accounts per annum in Karunagapally Block involving ` 292 lakh per 167

29 annum. The average per account assistance worked at a very small figure of ` 1,680 only. Out of the 17,380 accounts proposed to be covered per annum, 13,118 (75%) were under Crop Loan. The BLBC envisaged on an average only ` 1,533 per account for assistance. Once again this figure appeared to be inadequate for carrying out the seasonal agricultural operations in the block. The credit assistance planned under MI, FM and others also recorded declining trends; whereas, the credit allocation under LD and PH recorded marginal increasing trends. Under MI, BLBC planned to assist 1,487 accounts during the 5-year period involving ` 15.2 lakh only. The per account assistance planned under MI was an astonishing small figure at ` 1,022 only. In the case of LD, the forum proposed to assist 2,851 accounts involving ` 49.4 lakh credit assistance. The per account credit assistance was worked out at ` 1,733. Under FM, the forum planned to assist only 63 accounts over a period of 5 years involving ` 3.6 lakh. The per account assistance worked out at ` 5,714 only. Under PH, BLBC has planned to assist 2,547 accounts involving ` 69 lakh. The quantum of credit per account worked out at ` 2,709 only. However, the pattern of Credit Planning Process contained a marginal increasing trend as reported above. In the case of Allied Activities, the forum has planned to assist 6,448 accounts during the 5-year period involving a total credit assistance of ` 140 lakh. The per account credit assistance averaged at ` 2,171 only. The forum planned to assist 1,135 cases during the base year. It was kept at a marginally higher level during ; and further, a lesser target. During the subsequent year, it was kept again at a higher target; and, during , BLBC proposed to assist 1,577 accounts under Allied Activities. A steady increasing trend at not less than 20 per cent in all potential sectors as envisaged under the national-level credit policies were found missing in the Block-level Credit 168

30 Planning Process in Kollam district. Under Govt. Programmes, in Karunagappally Block, 7,493 cases were proposed to be assisted with a credit assistance of ` 158 lakh. The per account credit assistance envisaged under Govt. Programme worked out at ` 2,108. The pattern of assistance recorded both declining and marginally increasing trends during the 5-year period. Absence of a systematic increase in the credit planning under Govt. Programmes was also observed in Karunagapally block where the families below BPL were above 50 per cent. Kottarakara Block It lies in the western part of Kottarakara Taluk. Its geographical area is 133 sq.km., and Kottarakara, Neduvathoor, Ezhukone, Kareepra, Pooyappally and Veliyam are the 6 Panchayaths in the Block. The Block has 1.5 lakh people; of which, 14 per cent belongs to SC/ST community. Out of its 1.3 lakh households, 46 per cent belonged to BPL. Agriculture is the major occupation and cultivators totalled 10,600. Out of its 43,000 main workers, agriculture labours totalled 8,700, Non-Farm workers 7,200, and construction labourers 1,100. About 4,200 people are engaged in trade and services and around 7,000 people are engaged in household industry. The Block has 16 branches of Commercial Banks, five branches of Co-operative Banks and six Co-operative Societies. Indian Bank s branch at Kottarakara is the BLBC convener. Details of the block-level credit programme for 5-year period,from to is given in table

31 Table 6.9 Year Credit Planning in Kottarakkara Block from to Rs in Lakhs Crop Loan M.I L.D F.M PH Others Total Agri Total Allied Total Govt. Prog: Grand Total No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt No. A/c = Number of Accounts Source : District Credit Plans From the table, it is reflected that the number of accounts proposed for coverage over the 5-year reference period recorded decreasing trends. The total number of accounts decreased from 29,364 during the base year to 14,673 during the terminal year. The number of accounts planned for assistance averaged at 20,240 per year and the credit assistance averaged ` 1,291 lakh per year. The per account planned assistance worked out at ` 6,378 only. Out of the total accounts planned for 5 years, 62 per cent was under Crop Loan. BLBC on an average planned to assist 12,400 Crop loan borrowers in Kottarakara block. During the year the per account Crop Loan planned averaged ` 1,577. During the year the same was worked out at ` 18,958, with an appreciable increase. Thus, there observed a sizable increase in the per account Crop Loan planned in Kottarakara block during the 5-year period. The increase in this trend was relatively more in In the case of Minor Irrigation, the BLBC has planned to assist 3,

32 accounts during the 5-year period involving credit assistance of ` 75 lakh. The average per account credit assistance worked out at ` 1,965 only. The number of accounts planned for credit assistance under MI. over a period recorded a drastic decline from the year onwards. In the case of LD, the forum has planned to assist 2,656 accounts over the 5-year period involving ` 198 lakh. The per account assistance planned under LD worked out at ` 7,455. There was a steady declining trend in the number of accounts planned for assistance. It fell from 848 during to 325 during In the case of FM, BLBC planned to assist a total 1,566 accounts during the 5-year period; averaging 313 accounts per annum. For this purpose, they have earmarked ` 40 lakh averaging ` 2,554 per account. The forum has planned to assist 1,107 accounts during the initial year and from onwards it fell drastically to as small as 12, 34 and 46 for the remaining 3 years respectively. The planning process, therefore, reflected trends far away from the supporting national credit policies. Under PH, the forum has planned to assist 8,923 accounts during the 5-year period. The per year coverage worked out to 1,785. For this purpose, they earmarked on an average ` 66 lakh. The per account assistance averaged ` 3,696 only. Even under PH, a drastic decelerating trend was observed from the year when the programmes under National Horticultural Mission was in progress and State Government was spending a sizable amount to advertise its merits through daily newspapers meeting large advertisement expenditure. Under Allied Activities, the BLBC planned to cover on an average 1,442 accounts per annum involving a credit assistance of ` 49 lakh per year. The per account credit assistance averaged ` 3,398 only. Once 171

33 again from a drastic declining trend was observed in credit allocation under Allied Activities in Kottarakara block. In Kottarakara Block during the 5-year period the banks have planned to assist 4,330 borrowers under Govt. Sponsored programmes with financial assistance of ` 35 lakh per annum. The per account assistance worked out to ` 808 only. Thus, a relatively smaller amount of credit per account was envisaged even under Govt. Programmes in Kottarakara Block. The pattern of allocation also recorded the usual declining trend. How the block-level and district-level review forums of bankers confronted these situations especially in the presence of the District Collector who is the chairman of the district-level forums are interesting research works for translating the national-level aspirations on inclusive growth. Mukhathala Block It is located at the eastern part of the Kollam Corporation and has 50 sq.km. of area and accommodate 2.5 lakh of its population and the block is the most densely populated one in the district. Mayyanadu, Thrikkovilvattom, Kottamkara and Elamballoor are the four panchayaths in the block. The block has a larger number of manufacturing/processing units under brick, engineering, oil, wood, matches and cashew. There are two industrial estates in the block at Kannanalloor and Umayanalloor. Out of its total population, about 11 per cent is under SC/ST. The block has 48,000 households, of which, 38 per cent is under BPL. Out of its 65,000 workers, about 10,400 are agricultural labourers. The block has a good number of household industries totalling 18,000 units and about 25,000 people are engaged under this sector. The block has 16 branches of Commercial Banks, three branches of Co-operative Banks and 12 Co-operative Societies. Indian Bank s branch at Mayyanad is the BLBC convener. 172

34 In order to study the Block- level Credit Planning Process, last 5 years data ie, from to were analysed which are given in table 6.10 Table 6.10 Credit Planning in Mukhathala Block from the year to Account in Nos. & ` Lakh Year Crop Loan M.I L.D F.M PH Others Total Agri Total Allied Total Govt. Prog: Grand Total No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt Source : District Credit Plans The total number of accounts planned for assistance drastically decreased from 30,328 in to 18,932 in There observed a sharp fall during the year regarding the credit allocation. The credit allocation which was at ` 363 lakh during the year increased to ` 580 lakh during the year , and thereafter considerably reduced to ` 299 lakh in Subsequently it has sharply increased to ` 678 lakh and fell to ` 679 lakh and ` 538 lakh during the year and respectively. Thus, in the overall credit planning process, there was great reduction in number of accounts, but the credit allocation was shown considerable upward and downward trend. 173

35 The declining trend in the number of accounts to be assisted also was observed in total agricultural advances and accounts planned for assistance under Allied Activities. The number of accounts planned for assistance under total agricultural advances were 24,477 during the year and fell down to 12,906 during the year 2006 and 2007 and rose to 16,599 during the year The amount of credit allocation was ` 273 lakh during the year , followed by drastic reduction of ` 148 lakh in and rose to ` 464 lakh in the terminal year The total number of accounts under Allied Activities planned for assistance was 2,399 in , and very dangerously reduced to 420 in During the year , it rose to 1,250 accounts. The amount allocated for credit disbursement was ` 24 lakh during the year regarding Allied Activities, it increased considerably to ` 380 lakh in ; again drastically fell down to 6 lakh in , the amount considerably rose to ` 239 lakh in the next year. During the terminal year, it was drastically reduced to mere ` 33 lakh. For having a closer look on the Credit Planning Process in Mukhathala Block, the credit allocation under major headings like Crop Loan (CL), Minor Irrigation (MI), Land Development (LD), Farm Mechanisation (FM), Plantation and Horticulture (PH) and Others were analysed during the 5-year period. Regarding Crop Loan, the number of accounts planned for assistance during the year was at 22,507. It considerably fell to 10,426 during ; and gradually rose to 11,952, 12,699, 14,691, during the year , , respectively. However in the case of total quantum of credit allotted for Crop Loan a steady increasing trend was recorded except during the year In the case of MI, the number of accounts originally planned for assistance were 646 during the year It was drastically reduced to 432 during the terminal year But the amount of credit allocation 174

36 was ` 6 lakh during the year , and ` 9 lakh during the year and it was substantially reduced to ` 4 lakh during the year The amount of credit allocated was sharply risen to ` 135 lakh in In the case of LD, the number of accounts planned for assistance were 389 and 488 in and respectively. The amount of credit assistance was ` 4 lakh in , which rose to ` 18 lakh in , and remained the same at ` 18 lakh in Under FM, the number of accounts planned to assist gradually reduced to 91 during the year from 125 in and substantially increased to 275 in just to show only a drastic reduction to 154 during the terminal year. The amount planned for delivery decreased from `9 lakh to 6 lakh in the terminal year, showing a 33.33% fall. In the case of PH, the credit allocation showed a sizable increase during the year The number of accounts during the year was 1,034 and the allocation totalled ` 18 lakh compared to 6 lakh in the preceding year recording an increase by 200%. The proposed number of beneficiaries during the year were 499 which rose to 815 recording a 60% increase. The intended financial assistance also rose from `18 lakh to 27 lakh showing an increase by 50% in the terminal year. In the case of Others, the number of accounts planned and resources allocated a drastic declining trend was observed throughout the 5-year period under study. The proposed number of accounts during the year was 58 which sharply fell down to 19 in the terminal year reflecting a decrease by 66.66%. The amount allocated for assistance was `3 lakh in which drastically reduced to just `0.2 lakh. It was observed that Credit Planning Process requires further probing to make it more practical and meaningful The credit planning in Mukhathala block from to is presented graphically in figure

37 No of Accounts and Rs. in Lakh No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. Total Agri Total Allied Total Govt. Prog: Grand Total Credit Planning in Mukhathala Block from to Fig Oachira Block Oachira Block is located at the northern part of Kollam district bordering with Alappuzha district. The Block has 47 sq.km. area and the soil is mostly sandy and in certain places gravelly. The Block has about 15 km. coastal area. It has four panchayaths, viz. Oachira, Clappana, Kulasekharapuram and Thazhava. Agriculture is the main occupation in the block, followed by Fisheries. Under Non-Farm Sector, coir making, weaving of coir mats and scrupine are the important activities. The Block has less than 1 lakh population spread over 25,000 households of which, 42 per cent are under BPL. Out of the 35,000 workers, cultivators constitute about 5,000, agricultural labourers 8,000, Non-Farm workers 9,500, construction workers 1,400 and workers engaged in trade/commerce etc totalled The block has seven branches of Commercial Banks, three branches of Co-operative Banks and seven Co-operative Societies. Indian Bank s branch at Vavvakkavu is the BLBC convener. Details of Block- Level credit programme for the period under study is given in table

38 Table 6.11 Year Credit Planning in Oachira Block from to Rs in Lakhs Crop Loan M.I L.D F.M PH Others Total Agri Total Allied Total Govt. Prog: Grand Total No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt No. A/c = Number of Accounts Source : District Credit Plans It was observed that the number of accounts proposed for Crop Loan has decreased initially from 15,511 during the year to 8,425 in Thereafter, it increased to 10,783 in though this increase could not be sustained as is evident from the subsequent years where it decreased to 6,503 in , only to rise further to 7,324 in However the during the terminal year 12.62% increase was shown. In spite of the mixed trend in number of accounts proposed, the amount planned to disburse under Crop Loan showed a consistent increase from ` 109 lakh to ` 297 lakh over the 5-year period. In the case of Minor Irrigation (MI), though the amount proposed to be disbursed increased initially by 100% from ` 4 lakh in to ` 8 lakh in , it had decreased thereafter by 25% in and about 16% in the terminal year. The number of accounts planned to serve has dropped initially from 482 in to 138 in Subsequently it increased significantly to 595 in which couldn t be maintained as is obvious from the data which showed a fall of 68% in followed by another marginal decrease of 3% in

39 Regarding Land Development, the number of accounts proposed increased from 114 to 421 and subsequently to 627 in the first 3 years, recording a 450% increase. However during the following years, it fell down to 438 and 77 which showed a 30% and 82% respectively in the last 2 years under review. The amount planned for disbursement rose in the first 4- years and decreased by 61% in the last year, when compared to the preceding year. The proposed number of accounts to be served and amount to be disbursed in case of FM is also worth mentioning in this context. The number of accounts proposed rose subsequently from 26 in to 504 in indicating an amazing 1838%. But during the subsequent years, it failed to reflect the increasing trend. A 95% decrease in FM was observed in the last year, when compared to the The amount proposed for disbursement showed mixed trend falling initially and then increasing considerably from ` 0.8 to 6 lakh over the first 3 years. Thereafter it decreased subsequently in the next year only to recover by 100% in the last year under study when compared to previous year. In the case of PH also the trends were similar, the number of intended beneficiaries increased from 92 to 3,624 in the third year. However, it decreased subsequently to 1,173 and 178 in the last 2 years under review. This 84% decrease is worth mentioning considering the fact that the amount planned for delivery rose from `18 to 19 lakh in the last year. In relation to Others, the change was significant only in the second and fourth year under review where an 18% decrease and 71% increase were observed respectively in the proposed number of accounts. The amount to be delivered increased from ` 8 lakh to ` 15 lakh in the first 4 years though the amount set apart for disbursement was only ` 1 lakh in 3 rd 178

40 year. During the last year, only ` 3 lakh was earmarked for lending, which was 80% less than ` 15 lakh which was kept for the same purpose during the immediate preceding year. In the year the Total Agricultural Credit in terms of the number of accounts was 83% of the grand total while the Total Allied and the Total Govt. Sponsored Programme accounted for 15% and 2% respectively. Though a 43% decrease was observed in the proposed number of accounts under Total Agricultural Credit in when compared to the preceding year, it accounted only for 78% of grand total, the remaining being 17% and 5% associated with Total Allied and Govt. Sponsored Programmes. The third year under review has been note worthy in the sense that 94% of the number of accounts to be served was for Total Agricultural Credit while the remaining 6% almost shared equally both by the total Allied Activities and Government Sponsored Programmes. The increase in Total Agricultural Credit in over the previous year was not correspondingly matched with total Allied and Govt. Sponsored Programmes which showed decrease in number of accounts planned for assistance. The next two years showed a continuous decrease in terms of the number of accounts in Total Agricultural Credit as well as in Govt. Sponsored Programmes, but under Total Allied credit it rose in the fourth year, only to fall in the fifth year covered under study. In spite of the mixed trends observed in number of accounts planned for assistance the amount planned under Total Agricultural Credit rose consistently while the corresponding amount under total allied assistance fell considerably over the 5-year though a recovery could be observed in the last year. In the case of Govt. Sponsored Programme, the amount for assistance increased initially before showing the declining trend from the third year onwards. Fig 6.2 depicts credit planning in Oachira block which reveals Total Agricultural Credit, Total Allied Activities, Government Sponsored programme and Grand Total durnig to

41 Total Agri Total Allied Total Govt. Prog: Grand Total Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc No of Accounts and Rs. in Lakh Credit Planning in Oachira Block from to Fig 6.2 Pathanapuram Block It is located at the eastern part of the district and has a geographical area totalling 248 sq.kms. The Block has six Panchayaths viz. Pathanapuram, Pattazhi North, Piravanthoor, Thalavoor and Vilakkudi. Agriculture is the main occupation followed by activities under Allied and Non-Farm Sectors. A large part of Pathanapuram is under rubber cultivation. Out of its `1.6 lakh population, about 15 per cent is under SC/ST. The block has about 14,800 households, of which, about 42 per cent are under BPL. The main workers totalled at 44,000, of which, cultivators constituted 12,400, agricultural labourers 11,600 and about 4,000 people are engaged in non-farm sector. A sizably large number of people totalling about 9,000 are under construction and about 3,600 are engaged in trade and services. The Block has 11 branches of Commercial Banks, two branches of Co-operative Banks and 20 Co-operative Societies. Indian Bank s branch at Kallumkadavu shoulders the responsibilities of BLBC. 180

42 Details of Block-level credit programme for the period under review is given in table Table 6.12 Year Credit Planning in Pathanapuram Block from to Rs in Lakhs Grand Total Crop Loan M.I L.D F.M PH Others Total Agri Total Allied Total Govt. Prog: No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt No. A/c = Number of Accounts Source : District Credit Plans In the case of number of accounts under Crop Loan decreased by 58% over the 5-years while the amount planned for disbursement rose by 58% over the same period. Except in the second year where both the number of accounts and amount planned for lending decreased simultaneously. The other years under review showed varying trends. In , while the number of accounts increased, the amount for lending decreased marginally when compared to In the last year, both showed an increase. The case of MI was different in the sense that the number of accounts and amount proposed for disbursement increased in the second year by 158% and 88% respectively. However, both the number of beneficiaries and amount decreased in the third year considerably, thereafter it recovered in the fourth year, which cannot be sustained as is evident from the last year figures which showed 48% and 23% decrease respectively over the previous year. 181

43 The LD assistance planned in Pathanapuram Block revealed that the number of beneficiaries steadily declined from 797 in to 224 in However, this rose to 687 in , only to fall substantially in to a meagre 213, ie 69% decrease in the last year. The amount earmarked under LD increased initially from `17 to 24 lakh before falling to `21 lakh during the third year. But, this increased to ` 53 lakh in the fourth year which indicates 152% increase over the previous year. Eventually, the last year under review, showed a 66% decrease in the amount for disbursement under LD. The FM planned for assistance decreased substantially after the second year, both in terms of number of beneficiaries as well as planned amount for lending. The third year under study ie, , was the worst when only 7 beneficiaries were considered for a meagre assistance of ` 2 lakh. Thereafter, though an increase was observed in both, in , the last year recorded 25% fall in the same. Regarding the PH, an overall increase of only 6% was observed in the number of beneficiaries over the 5-year period. The second year under review ie, recorded a 160% increase in the same which could not be sustained. The planned amount for lending, also showed a similar pattern with an initial increase followed by a decrease and further rise. The last year however, showed a different behaviour in the sense that while the number of beneficiaries increased, the amount planned for assistance decreased by 16% over the previous year. Regarding Others, though the amount planned for assistance, ` 1 lakh remained constant over the first 3 years, the number of beneficiaries rose from 9 to 37, only to fall thereafter to 34. In the last 2 years, the number of beneficiaries declined while amount planned for assistance decreased from ` 1 lakh to ` 0.60 lakh which later rose upto ` 2 lakh in the last year under review. 182

44 In , the Total Agricultural Credit, Allied Activities and Govt. Sponsored Programme accounted for 94%, 4% and 2% of the total number of beneficiacies proposed to be assisted. In the same year the amount planned for disbursement averaged 78%, 6% and 16% respectively for Total Agricultural Credit, Allied Activities and Govt. Sponsored Programme. These figures substantially decreased next year when compared to previous year, though agricultural credit accounted only for 80% of the total, the remaining being 14% and 6% for Allied Activities and Govt. Sponsored Programmes respectively in terms of number of beneficiaries. The amount planned for assistance in three categories accounted for 80%, 10% and 10% of the total respectively. In the third year under review, also the agricultural assistance in terms of the number of beneficiaries as well as amount planned for assistance represented the major chunk of the total being 85% and 92% of the total assistance under all schemes in that year. The Allied and the Govt. Sponsored Programme accounted for 7 % and 8% respectively in terms of number of beneficiaries. In the case of amount planned for lending the allied activities accounted for only 3% while 5% of the total assistance comprised of Govt. Sponsored Programmes. The total agricultural assistance were 82% and 84% of total number of accounts proposed in and respectively. In these years the amount set aside for the same purpose amounted to 89% and 86% of total credit disbursement. The number of accounts and the amount set aside for Total Allied Activities were 10% and 6% of total in This, however, declined to 8% in terms of number of beneficiaries while the amount set aside remained constant at 6% in the last year. The number of accounts proposed for Govt. Sponsored Programme stayed the same in and representing 8% and 7% of the total assistance. The amount earmarked for this represented 5% and 9% of total in and respectively. Fig 6.3 depicts credit planning in Pathanapuram block which reveals Grand Total and its sub divisions comprising Total Agricultural Credit, Total 183

45 No of Accounts and Rs. in LakhAxis Title Allied Activities and Government Sponsored programme and Grand Total durnig to No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt Total Agri Total Allied Total Govt. Prog: Grand Total Credit Planning in Pathanapuram Block from to Fig 6.3 Sasthamcottah Block The block is located at the north-eastern side of the district. It has a total area of 118 sq.kms. and has six panchayaths viz. Kunnathoor, West Kallada, Sasthamcottah, Sooranad South, Sooranad North and Poruvazhy. Laterite soil predominate in the Block. Sasthamcottah Lake, the largest fresh water lake in the state is located in the Block. Out of its 1.4 lakh population, 17 per cent belong to SC/ST category. The main workers total 39,000; of which, cultivators are about 10,500, nine branches of Commercial Banks, five branches of Co-operative Banks and 11 Co-operative Societies. Indian Bank branch at Sasthamcottah is the BLBC convener. The details of block-level credit planning process for the period under review is given in table

46 Table 6.13 Year Credit Planning in Sasthamcotta Block from to Rs in Lakhs Crop Loan M.I L.D F.M PH Others Total Agri Total Allied Total Govt. Prog: Grand Total No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt No. A/c = Number of Accounts Source : District Credit Plans The analysis of Crop Loan in Sasthamcotta Block revealed that while the number of beneficiaries decreased from 30,706 in to 10,678 in the amount extended for lending increased from `156 lakh to `246 lakh over the same period. The number of beneficiaries decreased in substantially, recording 44% fall. Thereafter, it increased in the subsequent year before further falling in the succeeding year. The last year under review, showed a 38% increase over the previous year as far as the number of beneficiaries of the crop loan assistance is concerned. The amount earmarked for the same decreased initially before recording significant increase for the next three years. The MI assistance planned for has decreased both in terms of beneficiaries and the amount proposed. The last two years showed a considerable fall in number of borrowers though a slight recovery was observed in the last year under review. A 74% decline in the same was observed in when compared to the year The amount set aside declined from ` 30 lakh to ` 4 lakh over the first 4 years under 185

47 analysis, before climbing to ` 12 lakh representing 200% increase over the previous year. The trends in LD indicated that the number of beneficiaries increased in the first 3 years from 726 in to 948 in However it fell by almost 51% in the succeeding year before rising by 12% in the last year. The amount remained the same in the third and fourth years under review though an increase was observed in and relating to the previous year. The FM data revealed that in as well as in neither disbursement nor beneficiaries were proposed. A substantial increase in the number of accounts to be served was observed in when compared to previous year, a commendable increase of 1,450%. However, the amount planned to be lent showed only 500% increase during the same period, indicating a lower per capita lending proposed. The PH scheme showed a decrease both in terms of number of beneficiaries and amount proposed over the first 4 years. The fall over that period was 77% each in both the number of beneficiaries and the amount planned for delivery. However in the last year, an increase of 23% and 142% were registered in the number of beneficiaries and the amount proposed for assistance respectively. In the case of Others, there is a substantial increase in the second year in both the number of beneficiaries and the amount set aside and the trend could not be sustained. This was substantially by a 94% and 96% fall in both the above mentioned indicators. Though the number of beneficiaries intended to assist fell consistently thereafter, mixed trend was observed in amount proposed which rose by 200% before falling by 25% in the last 2-years. The decline in number of beneficiaries from 4,139 in to 5 186

48 in initiated further analysis into the reasons accounting there of. It was observed that the credit planning process need further probing to make it more meaningful and practical. The Total Agricultural Credit over the 5-year period showed a drastic fall in terms of the number of proposed borrowers while the amount set apart increased though not substantially. In , 90% of total assistance were represented by agricultural credit in terms of number of beneficiaries and amount planned for lending. The Total Allied and Govt. Sponsored activities could account only for 7% and 3% of the total proposed number of beneficiaries in the same year. As far as the amount planned was concerned these were 82%, 10% and 8% for agricultural assistance, Allied Activities and Govt. Sponsored Programme respectively. In spite of the fact that the total number of beneficiaries and the amount proposed for the total agricultural assistance fell in the next year, it still accounted for 88% and 72% of the total number of accounts and the amount proposed respectively in In that year, the Total Allied Activities were 7% and 10% of total assistance planned in terms of number of accounts and the amount earmarked the remaining being 5% and 18% denoting assistance under Govt. Sponsored Programme. The last 2- years under review revealed a substantial decrease in the number of beneficiaries under the total agricultural assistance, an 86% decrease in in relation to In spite of this, the amount proposed for agricultural assistance rose by 20% during the same period, while the total number of beneficiaries for agricultural assistance in accounted for 88% of the total assistance proposed, it was only 50% in the last year. The total Allied Activities and Govt. Sponsored Scheme in represented 8% and 4% of the total number of accounts proposed in that year. In the last year, however, the proposed number of beneficiaries for Allied Activities was significant, representing a 42% of total number of accounts, the remaining for Govt. Sponsored Schemes being an insignificant 8%. The significant share of the number of beneficiaries for Total Allied Activities in total assistance was not 187

49 Total Agri Total Allied Total Govt. Prog: Grand Total correlated to the amount planned for assistance in the last year under review. The total agricultural assistance again accounted for a lion share of the total amount proposed, ie 88%, while Allied Activities and Govt. Sponsored Programme just accounted for 6% each only. The average amount proposed for disbursement under Allied Activities was considerably low taking into account the large number of beneficiaries proposed in Fig 6.4 depicts credit planning in Sasthamcottah block which reveals Grand Total and its sub divisions comprising Total Agricultural Credit, Total Allied Activities and Government Sponsored Programme durnig to Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc No of Accounts and Rs. in Lakh Credit Planning in Sasthamcottah Block from to Fig Vettikkavala Block The block has 169 sq.km. area and is located in Kottarakara Taluk. Ummannoor, Pavithreswaram, Kulakkada, Mylom, Melila and Vettikkavala are the six panchayaths. The block has 37,800 households with a population of 1.77 lakh, of which, 19 per cent are under SC/ST category. Out of the total households, 55 per cent are under BPL. The block has about 50,000 workers of which 29 per cent are cultivators, 27 per cent are 188

50 agricultural labourers and workers engaged in non-farm sector constitute about 23 per cent. The block has 11 branches of Commercial Banks, three branches of Co-operative Banks and 10 Co-operative Societies. Indian Bank s branch at Chengamanadu shoulders the responsibility of the BLBC. For the purpose of studying the block-level credit planning process, last 5- years data from to were analysed and are given in table 6.14 Table 6.14 Year Credit Planning in Vettikkavala Block from to Rs in Lakhs Crop Loan M.I L.D F.M PH Others Total Agri Total Allied Total Govt. Prog: Grand Total No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt. No. A/c Amt No. A/c = Number of Accounts Source : District Credit Plans Analysis of the data relating to Vettikavala Block also revealed that in all the years crop loan, was substantially higher than MI, LD, FM and PH both in term of number of the beneficiaries and the amount proposed for assistance. An year-wise analysis of Crop Loan assistance disclosed that the number of beneficiaries proposed have decreased by 31% over the 5 year period though the amount earmarked for assistance rose by 102% over the same period. A steady decrease in the number of proposed beneficiaries was observed over the first 4 years, though it increased marginally in the last year under review by 15%. As far as the amount planned for assistance was concerned, it increased from 3 rd year despite the fall in the second year. 189

51 The MI assistance increased in the first 3 years as far as the number of proposed borrowers is concerned, thereafter it decreased by 76% and 50% in 4 th and 5 th year respectively in relation to previous years. A rise of 36% in the amount proposed for lending in the second year, could not be sustained as is obvious from more than 50% decrease in the next year. However, the fourth and fifth year did not show much fluctuations in the amount earmarked. The LD data showed an overall increase of 273% in the number of beneficiaries proposed over the 5- year period. Over the same period, the amount earmarked for the LD rose by 175%. The significant increase in the number of beneficiaries and the amount for lending in the terminal year over the previous year is worth probing since they rose by 137% and 120% during that period. The FM assistance increased in the first 3 years, both in term of the number of beneficiaries and the amount proposed for lending. After , it declined substantially in terms of the number of beneficiaries while 50% decline was observed in the amount planned for in , which remained stagnant in the last year under review. The PH assistance also showed similar trend in the Vettikavala Block where the figure for is significant in terms of the number of beneficiaries which was the lowest during the entire period under study. During the year , an 86% fall in the number of proposed beneficiaries was observed though the amount planned has risen by 120% in that year when compared to the previous year. This fall in the number of proposed beneficiaries was overcome in the last 2 years, where it steadily increased from 307 to 1,249 in and to 1,703 in However, the amount planned for lending fell from `55 lakh in to `33 lakh in before it started increasing to ` 51 lakh in

52 In the case of Others, the number of beneficiaries and the amount planned for increased initially before declining heavily. In the proposed number of beneficiaries fell by 96% from that of the previous year, while the amount planned for lending fell by 97% in the same year. But during the year showed tremendous recovery both in number of beneficiaries and the amount proposed ie, by 509% and 1,233% respectively. However, in the last year under review the number of beneficiaries declined by 85% over the previous year while the amount planned for assistance declined by 93% over the same period. The Total Agricultural Credit planned for was 15,336 which increased slightly in the next year before starting a significant decline in the third year under review there after it increased though, not considerably as far as the number of beneficiaries was concerned. However, the amount set aside for assistance declined initially and there after increased from third year onwards. The number of accounts for Total Allied and Govt. Sponsored Programme declined substantially over the five year period irrespective of mixed trend over the period. The amount earmarked during the period for Allied Activities did not show a substantial increase and that for the Govt. Sponsored Programmes. Though the number of beneficiaries for the Total Agricultural Credit rose marginally in the next year, ie , a decline was observed in the amount planned for lending. In that year, the share of the total agricultural assistance, Allied Activities and the Govt. Sponsored scheme were 85%, 7% and 8% respectively for the proposed number of beneficiaries. The total amount planned in assistance was divided as 77%, 9% and 14% respectively for Agricultural Credit, Allied Activities and Govt. Sponsored Programme. The years and showed a considerable decrease in the proposed number of beneficiaries under agricultural credit though it remained 92% and 90% respectively of the Grand Total. In , the 191

53 rest of the total assistance was intended for utilization as 4% each for Allied Activities and for Govt. Sponsored Programme, when number of beneficiaries proposed were taken into account. However, the amount planned for assistance was 4% for Allied Activities and 8% for Govt. Sponsored Programme while 88% was Agricultural Credit. The data for the year revealed that 6% and 4% of the total assistance planned in terms of the number of beneficiaries were for Allied Activities and Govt. Sponsored Programme respectively of the Grand Total. The amount planned for disbursement in that year was 91%, 4%, 5% respectively for Agricultural Credit, Other Allied Activities and Govt. Sponsored Programmes. In the last year under review, the Total Agricultural Credit accounted for 92% while Other Allied Activities and Govt. Sponsored Programmes represented 6% and 2% respectively in terms of the number of beneficiaries proposed. The amount set aside during that year was allocated as 90% for Agricultural Credit, 6% for Other Allied Activities and 4% for Govt. Sponsored Schemes. Fig 6.5 shows credit planning in Vettikavala block where Grand Total is sub divided into Total Agricultural Credit, Total Allied Activities and Government Sponsored programme durnig to

54 No of Accounts and Rs. in Lakh No. Acc Amt. No. Acc Amt. No. Acc Amt. No. Acc Amt Total Agri Total Allied Total Govt. Prog: Grand Total Credit Planning in Vettikavala Block from to Fig 6.5 The analysis reveals that there exists wider block - wise variations in credit target and credit delivery for various sectors. Hence the study supports the hypothesis that there exists block wise - variations in credit target and credit delivery. 193