ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Banking Sector Reform and Credit Flow to Indian Agriculture

Have banking sector reforms improved the share of net bank credit to the agricultural sector? Have profit-oriented norms persuaded commercial banks to neglect the agricultural sector? Does the provision of a credit subsidy reduce the supply of agricultural credit? Can an increase in the lending rate be a suitable measure to reduce the rate of credit subsidy? What is the interest rate elasticity of supply of agricultural credit? What has been the impact of the closure of rural bank branches on the provision of credit to agriculture? This paper addresses these questions by analysing the data on the total outstanding credit provided by the scheduled commercial banks to the agricultural sector during the period 1981 to 2000.

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