ASSESSING THE DYNAMICS OF AGRICULTURAL CREDIT FLOW IN HIMACHAL PRADESH

This research paper provides a comprehensive analysis of the evolving dynamics of agricultural credit distribution among various banking institutions over a specified period in the northern Indian state of Himachal Pradesh. Himachal is a hilly state where agriculture plays a pivotal role in the state's economy, employment generation and development of people life. Examining data on Compound Annual Growth Rates (CAGRs) and percentage shares, the study highlights significant shifts in the contribution of Public Sector Commercial Banks, Regional Rural Banks, Cooperative Banks, and Private Sector Banks to the agricultural credit landscape. Notably, Public Sector Commercial Banks remain the chief source, contributing 46% of the total disbursement in 2022-23. The correlation matrix establishes a robust and statistically significant positive relationship between total agricultural credit and the number of bank branches, emphasizing the pivotal role of banking outreach in facilitating credit disbursement. A detailed examination of banking outreach in Himachal Pradesh reveals a strategic shift in branch distribution towards semi-urban areas, with correlations confirming the strong link between credit availability and expanding banking infrastructure. The overall positive trajectory of agricultural credit, with a consistent annual growth rate of 10.395%, reflects intentional efforts to support non-farm sectors, notably MSMEs. Economic parameter indicators illustrate a deliberate push to enhance the role of agricultural credit in the state's economic landscape. The analysis extends to the correlation between Bank Branches, Kisan Credit Cards (KCC), and Agriculture credit, revealing a significant positive impact on credit flow with increased bank branches and KCC adoption. The KCC analysis indicates a positive trend in credit disbursed through Kisan Credit Cards, despite variations in the percentage of loans distributed.