An Economic Analysis of Agricultural Credit-led Agricultural Growth in India

Abstract

Among all sectors, the agriculture sector will be the pillar stone for sustainable economic growth. Agriculture credit shows the pivotal role for efficient agricultural transactions. The study investigates the role of agriculture credit in India’s agricultural credit through various economic analyses. The data was collected from various government websites such as RBI, Ministry of Statistics and Programme Implementation of India, Economic Survey of India. The results observed that institutional credit has a positive correlation with fertilizers consumed whereas consumption had a negative correlation with agricultural produces. The results further stated the co-integration and the Johansen-Juselius maximum likelihood tests the long-run positive association between India’s agricultural GDP and agricultural credit and increased Agricultural GDP drives agricultural credit. Finally, the policy implication on two perspectives as to encourage institutional credit arrangement to reach farmers with easy operational facilities across the nation and non-institutional credit need to marginalize the informal sources.