Finance ministry may peg farm credit target for commercial banks, regional rural banks and cooperatives close to Rs 1,50,000 crore (Rs 1500 billion) this fiscal after the resounding success in 2004-05.
Finance Minister P Chidambaram is slated to meet bankers within a few weeks to set the new target, which would be nearly 30 per cent higher than Rs 1,18,000 crore (Rs 1180 billion) disbursed to the farm sector in 2004-05, official sources said.
Chidambaram has already discussed the credit situation for this fiscal with Reserve Bank and Nabard a few days ago.
After Chidambaram's directive to banks, credit to farm sector was stepped up to Rs 1,18,000 crore as against the initial target of Rs 1,05,000 crore (Rs 1050 billion).
The thrust on higher farm credit is part of UPA's strategy to push up agricultural growth to close to 4 per cent annually in the coming years, which would ensure 7-8 per cent growth in economy.
Chidambaram, who has outlined the need for massive investment and higher credit flow to agriculture, had asked Nabard to come up with schemes where banks offer investment credit, sources said.
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