Agricultural Credit in India: A Critical Analysis of Reforms, Inequalities and Challenges

Abstract Agricultural credit increases agricultural production either directly or indirectly and is vital for rural economic development and for alleviating agrarian distress. Several policy initiatives have been implemented to improve the reach of formal credit in the agricultural sector. However, multiple disparities and challenges persist in access and availability of formal agricultural credit across regions and caste or social groups. This tends to hamper the inclusivity in the institutional agriculture credit landscape. The present study attempts to critically evaluate the historical context/evolution of formal agricultural credit; assess various policy reforms and measures undertaken to mitigate regional, social, or caste-based disparities; and investigate the associated challenges. The inquiry highlights persistent disparities in access to and disbursement of formal agricultural credit, as well as the continued reliance on informal agricultural credit mechanisms. The study aims to contribute to the literature on issues and challenges of agricultural credit in India.