NABARD holds state level credit seminar for Nagaland

•    State Focus Paper 2023-24 for Nagaland released
•    Stresses on sustainable agriculture for securing rural prosperity in Nagaland

Our Correspondent
Kohima | March 10

The need to promote sustainable and equitable agriculture for securing rural prosperity in Nagaland has been stressed at the State Level Credit Seminar 2023-24 here today at De Oriental Grand, organized by Nagaland Regional office of National Bank for Agriculture and Rural Development (NABARD).

The State Focus Paper (SFP) 2023-24 for Nagaland was released by R Binchilo Thong, Agriculture Production Commissioner, and Director General, Administrative Training Institute.

Tiakala Ao, General Manager, (Officer-incharge) NABARD, Nagaland Regional Office, Dimapur told the seminar that NABARD is a development financial institution in India that works towards promoting sustainable and equitable agriculture and rural prosperity through effective credit support, related services, institutional development, and other innovative development initiatives.

Stating that NABARD was established in 1982 with a mandate for facilitating credit flow for promotion and development of agriculture, cottage and village industries, she said “Today, we are working in areas like Consultancy, Venture Capital funding to Start Ups, Green Financing and many other key areas in the rural ecosystem.”

The challenges of rural development are only matched by the mandate of NABARD.

At the heart of its developmental initiatives, is the constant endeavor for improving, experimenting and inventing newer tools, methods and approaches for further accelerating the process of development, she added.

 “We have just recovered from a debilitating lockdown which affected economies worldwide but we did see that throughout the lockdown and thereafter, it was the agriculture sector that demonstrated remarkable resilience.  It has also been leading the economic recovery,” she said.

She said that Nagaland is primarily an agrarian state where agriculture plays a significant role in the economy of the state. About 70% of the state’s population is directly or indirectly involved in agriculture which is the primary source of livelihood for the majority of the rural people.
 
“Agricultural sector will give a push to the growth of state’s economy’
She believed that prioritizing agricultural sector in the state of Nagaland will give a push to the growth of the state’s economy.

“Given the strong inter-linkages of the agricultural sector with the secondary and tertiary sectors of the economy, prioritising agriculture sector may be crucial to fuel economic growth. Thus, it is important to find solutions to many of the contemporary challenges facing the agriculture sector through innovative approaches,” Ao said.

She maintained that bank credit is an important component for economic transformation and forms the backbone of development planning in the state.

“While it is important that bank credit is extended to all sectors of the economy, and thereby propel economic development and growth, it is crucial that for an agrarian state like Nagaland, bank credit should be directed towards certain key sectors that will usher in economic transformation in the state. The key sectors for Nagaland where we believe bank credit should be directed are in the agriculture and allied sectors, and the MSME sectors,” she said.
It is providential that the keys sectors identified for Nagaland are in alignment with the key sectors identified by the Government of India (GoI) as priority sectors.

With a view to provide direction to banks for extending credit to potential sectors in  the district’s economy, NABARD has been preparing the Potential Linked Credit Plan (PLP) for each district since the Financial Year 1989-90, she said.

The main objective is to assess the exploitable potential for credit dispensation under various priority sectors of the district. Since the FY 2005-06, the RBI has made it mandatory that the PLPs prepared by NABARD will form the base for the preparation of Annual Credit Plan for Priority Sector Lending in each district of the state. This speaks of the importance accorded to the PLPs of NABARD. It has also vested enormous responsibility on NABARD in ensuring the quality of the PLPs.

The reparation of the PLP is thus a  systematic  and  comprehensive exercise carried out by adopting participative and consultative approach involving all  stakeholders  in  the  field  of  agriculture  and  rural development, she said adding that the projections made under the PLP for each district are aggregated and represented in the form of the “State Focus Paper” for the state.

Along with others, Nagaland Regional office of NABARD, have since prepared the PLPs for all the districts of the state for the year 2023-24.

The SFP presents a comprehensive picture of the potentials available for development of the various activities under agriculture and the rural sector, the availability of inputs including credit, infrastructure and other linkages for tapping the potential during the next financial year i.e. 2023-24.

The State Focus Paper will serve as a guide for stakeholders in the rural credit sector to identify the areas that need more attention and focus. The paper also provides an insight into the challenges and opportunities in the priority sectors and proposes strategies to overcome the challenges and harness the opportunities, she said.
 
Agriculture credit in Nagaland increased to Rs 22314.29 lakh
A look at past trends in credit flow in the state indicates that credit flow to the agriculture and allied sector in the state has been showing an upward trend, she said.

From Rs 19369.96 lakh in the FY 2020-21 the agriculture credit in the state increased to Rs 22314.29 lakh in 2021-22 an increase of 15% in the last one year.

There has also been a 27% growth in term loans to agriculture in the past one year. However, the share of agri term loans to total agriculture loans continues to be much lower at 35%, the NABARD General Manager said adding that there is a need for banks to step up their efforts in extending credit for investment activities.

The lack of adequate infrastructure is a major constraint that limits the growth and pace of capital formation particularly with reference to the primary sector.

Stating that as public sector investment is a critical input for creation of infrastructure, she urged upon the state government to take steps to address the issue of strengthening and augmenting infrastructure particularly in the rural areas so that the credit flow to the agriculture sector is not impaired.

She also urged the members of the Banking fraternity to play a proactive role and double their efforts in improving the credit flow to all sectors. She also requested banker friends to focus on the agriculture and allied sector in their credit programmes as this sector still engages the largest workforce in the state.

The SFP has assessed a credit potential of Rs 1015.39 crore for the priority sectors for the year 2023-24 of which Rs 514.11 crores has been assessed for disbursement under the agriculture and allied sector. 

“It is my earnest request that the banks kindly incorporate the credit potentials as indicated in the PLPs for the year 2023-24 while framing their respective branch wise credit plans to give meaning and shape to the entire credit planning exercise,” she said.  
 
CD ratio seen major improvement over past years 
R Binchilo Thong, Agriculture Production Commissioner, and Director General, Administrative Training Institute said that the “State Focus Paper” which was released today is a compilation of all the district level data and indicates the state’s total credit potential in various priority sector areas. It also identifies sectoral constraints and suggests various measures to achieve the GLC.

“This credit potential estimated in SFP forms the basis for preparation of “Annual Credit Plan (ACP)”of banks in the State for the next financial year,” Thong said.

He said that The CD ratio in the state has seen a major improvement over past years but it needs to further improve upto the minimum of 60% with organic growth in both deposits and advances.

“I am happy to note that GLC flow is around 80.78% of the target set under Priority Sector last financial year. I appreciate the efforts and would urge the banker’s community to step up the good work to achieve 100% of the annual target,” he said.

Government of India has raised the all-India agriculture credit target to Rs 20 lakh crore for FY 2023-24, 11% hike from the target of Rs 18 lakh earmarked in FY 2022-23.

Accordingly, the GoI would also raise the target for Nagaland under agriculture & allied activities. NABARD, being the Apex body for agriculture credit flow, has been entrusted to supervise the flow of Agriculture Credit in the country and the state, he said.

He informed that the state of Nagaland has good climate, fertile soil, adequate rainfall, abundance of Pine apple, Ginger, Cardamom, Kiwi, Dragon Fruit, Banana, bamboo shoot, Leafy Veg, forest honey etc., which are conducive for value chain development and above all, the micro-enterprises have enough potential to provide employment opportunities in the state.

He urged upon the banking fraternity to come forward with wholeheartedness to improve the GLC flow in the state by way of bulk lending to farmers through Federations/Cooperative Societies, JLG/FPO mode of financing (Joint Liability Group/ Farmers Producers Organisation), Area Development Schemes and Value-chain financing, Agro-forestry and Eco-tourism, Modernisation of hatcheries and fish seed farms, Cluster approach for MSME sector and SHG Bank-linkage programme-outreach.

Further, he urged upon the line departments of the state government to extend adequate cooperation to the bankers “because while credit can give a boost to development, the Government has a responsibility to create an enabling environment for the bankers.”

Poji, AGM (DD) NABARD made a presentation on State Focus Paper 2023-24.