Productivity of Agricultural Credit in India: Assessing the Recent Role of Institutional Credit to Agriculture in India using State Level Data

the study has been able to highlight the increasing role that agriculture credit is playing in supporting agriculture production in recent times- credit accounted for 16% of the total value of paid out inputs in the triennium ending (TE) 1998-99, and by the end of the decade, in TE 2011-12, it had risen to as high as 80.3% of the total paid out costs of inputs. Based on a State level panel data, the study has estimated the credit elasticity of agricultural GDP for the period 1995-96 to 2011-12 at 0.21, i.e. a 10% increase in institutional credit flow to agriculture in current prices is associated with a 2.1% increase in agricultural GDP the following year, expressed in current prices. However, disaggregating the period into two i.e., 1995-96 to 2003-04 and 2004-05 to 2011-12 indicates that the elasticity has weakened in the latter period in comparison to the former. [Occasional paper-61].