As per the Economic Survey 2020-21, consider the following statements with respect to the Regional Distribution of Agricultural Credit in India:

1. Southern region shows the highest share in total agricultural credit.

2. North-Eastern region (NER) shows the lowest share in agricultural credit due to low cultivable area.

Which of the statements given above is/are correct?

The correct answer is Both 1 and 2.

Key Points

• Economic Survey 2020-21 highlighted that small and marginal farmers in India faces the financial constraints. As timely availability of adequate credit is fundamental for the success of farming activities.
• The government has taken certain initiate such as announcement of Agriculture Infrastructure Fund announced as a part of Atma Nirbhar Bharat Abhiyan for better credit flow among the farmers. The survey further highlighted that
• There is an uneven distribution of agriculture credit among the different regions such as-
  • The regional distribution of the agricultural credit has skewed in favour of the Southern Region and the share of north-eastern states has been very low. Hence statement 1 is correct
  • The share of southern region in agricultural credit was more than 40 per cent while it was less than 2 per cent for the north-eastern region (NER). 
• This low coverage of the agricultural credit in NER is because of
  • Lower cultivable in North Eastern States which accounts about 2.74 per cent of the total Gross Cropped Area (GCA) of the country. Hence, statement 2 is correct.
  • Moreover, community ownership of land is prevalent in most of the NE States.
  • These two factors affected the intake of Kisan Credit Card (KCC) loans in NER as these loans are given against land documents.