Open AccessFueling Agricultural Growth In Madhya Pradesh Through Formal Credit- A Way Towards Financial Inclusion
Author(s) -
M Rathi,
Dr.Vivek Sharma
Publication year - 2020
Publication title -
bsss journal of commerce/bsss journal of commerce
Language(s) - English
Resource type - Journals
eISSN - 2582-4651
pISSN - 0975-2528
DOI - 10.51767/joc1201
Subject(s) - agriculture , agricultural economics , productivity , agricultural productivity , census , financial inclusion , population , business , economics , economic growth , geography , finance , financial services , demography , archaeology , sociology
Financial inclusion is emerging as new paradigm of economic growth. In India 68.84% (census 2011) population lives in rural area out of which 25.70% people are poor and rural finance is a matter of credit concern in the economy. Madhya Pradesh has reported the best productivity growth in terms of Agriculture over past few years, and has improved its infrastructure. This kind of change in one sector – agriculture – is initiating growth in the entire economy of the state. Agriculture in Madhya Pradesh (MP) grew at 9.7 per cent per annum during the decade (2008-18). The last five years have been spectacular when agricultural growth rate stood at 18% per cent per annum. The study intend to examine the influence of access to credit on agricultural productivity in Madhya Pradesh, It is based on the secondary data compiled from several sources, has revealed that the formal credit to agriculture in real terms has increased during thepast decade. The nature and availability of panel dataset constrained the study to examine the pooled data analysis for arriving at results. The analysis was carried out with the data of selected districts of Madhya Pradesh over the period 2008-2018. The findings of the study shows the evidence of long run relationship between agriculture production and agricultural credits provided to small and marginal farmers. The results revealed that total credit to agriculture has a positive and significant impact on the level of agriculture production in the region. The Study also examines nature of the relationship between formal agricultural credit and productivity of crops which ultimately led to an improvement in state GDP. One of the major findings was related to inadequacy of credit to small and marginal farmers. Therefore more innovative models are required to be formulated using Econometric Financial Models for making the credit availability and accessibility more convenient. Thus it can be concluded that formal agriculture credit is required for the inclusive growth of the economy of the state.