Arthshastra Indian Journal of Economics & Research

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Institutional Credit to Agriculture Sector : A Study of its Impact on the Agriculture Sector of India


Affiliations
1 Assistant Professor, Ajay Kumar Garg Institute of Management, 27th KM Milestone Delhi Meerut Expressway, Ghaziabad – 201 009, Uttar Pradesh, India
2 Associate Professor, KIET Group of Institutions, Delhi NCR Meerut Road (NH 58) Ghaziabad - 201 206, Uttar Pradesh, India

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Agriculture is one of the most prominent sectors of India’s economy. Agriculture sector is providing employment to more than 50% of India’s workforce and more than 60% of India's population is directly or indirectly dependent on it. Institutional credit always plays a crucial role in the economic development of any sector. In this study, we have analyzed the role of institutional credit on the economic growth of the agriculture sector of India. Along with institutional credit, role of area cultivated, consumption of fertilizers, and production of agriculture in economic growth of the agriculture sector were studied. For analyzing the data, correlation matrix, Philips – Perron test, and Cobb – Douglas function were applied. The results revealed that institutional credit and area cultivated had a positive and significant impact on the growth of the agriculture sector of India. The study further suggested changes in government policies to promote the agriculture sector as a business venture, and institutional credit to the agriculture sector should also be sanctioned by private banks other than public sector banks.

Keywords

Agriculture Credit, Agriculture Sector, Growth, Institutional Credit, GVA, Production.
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  • Institutional Credit to Agriculture Sector : A Study of its Impact on the Agriculture Sector of India

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Authors

Rahul Singhal
Assistant Professor, Ajay Kumar Garg Institute of Management, 27th KM Milestone Delhi Meerut Expressway, Ghaziabad – 201 009, Uttar Pradesh, India
Prateek Gupta
Associate Professor, KIET Group of Institutions, Delhi NCR Meerut Road (NH 58) Ghaziabad - 201 206, Uttar Pradesh, India

Abstract


Agriculture is one of the most prominent sectors of India’s economy. Agriculture sector is providing employment to more than 50% of India’s workforce and more than 60% of India's population is directly or indirectly dependent on it. Institutional credit always plays a crucial role in the economic development of any sector. In this study, we have analyzed the role of institutional credit on the economic growth of the agriculture sector of India. Along with institutional credit, role of area cultivated, consumption of fertilizers, and production of agriculture in economic growth of the agriculture sector were studied. For analyzing the data, correlation matrix, Philips – Perron test, and Cobb – Douglas function were applied. The results revealed that institutional credit and area cultivated had a positive and significant impact on the growth of the agriculture sector of India. The study further suggested changes in government policies to promote the agriculture sector as a business venture, and institutional credit to the agriculture sector should also be sanctioned by private banks other than public sector banks.

Keywords


Agriculture Credit, Agriculture Sector, Growth, Institutional Credit, GVA, Production.

References





DOI: https://doi.org/10.17010/aijer%2F2020%2Fv9i4%2F156811