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Executive Summary

1. Theme of PLP: A disquieting feature of agriculture credit in the district, has been the declining share of investment credit in total agriculture credit. During the 13 years period from 2002-03 to 2014-15, the average share of investment credit to Agriculture Credit and to the total credit for priority sector was 14.8% and 9.9% respectively. The declining trend in investment credit vis-à-vis crop loan has serious implications for sustaining capital formation. The theme for PLP 2016-17 shall continue to be “Accelerating the pace of capital formation in agriculture and allied sector”.

2. District's Specific Characteristics, Status and Developments:

2.1. Hassan district is situated in the southern part of Karnataka. It lies partly in Malnad and partly in the southern Maidan tract. Agriculture is the predominant economic activity. Net sown area (NSA) and gross cropped area are 3.68 lakh ha. and 4.28 lakh ha. respectively. Net irrigated area (NIA) as a percentage to NSA was 27%, while gross irrigated area as percentage to gross cropped area was 24.6%. With the area sown more than once at 59741 ha., the cropping intensity was 116%. Industrially, the district is under developed, as there are only 9 large and 2 medium industries of which 3 are large scaled agro-based including one sugar factory. Hassan District is covered under Agri Export Zone for production and export of Gherkins.

2.2 Major food, commercial, plantation & horticulture crops:

The important food crops of the district are paddy, ragi and maize. Potato, a commercial crop is grown in 18004 ha. However, due to successive failure of potato crop, farmers are shifting to maize. The important/major plantation/horticulture crops are coconut, coffee, cardamom, pepper, arecanut, followed by major fruit crops like Mango, Banana, Sapota Guava & Orange, Vegetables and floriculture. Cumulatively, an area of 116195 ha. (excluding coffee) was under fruits, spices, plantation crops, floriculture and vegetables, with a total production of 6.15 lakh tonne.

3. Sectoral trends in Credit Flow: The total ground level credit flow under Priority Sector during 2014-15 was ` 3165.47 crore, surpassing the District Credit Plan (DCP) target by ` 87.05crore. The growth rate in GLC during 2014-15 was 10.1%, compared to 51.2% in 2013-14 and 9.1% in 2012-13. The shares of the primary, sector and tertiary sectors in the total PS credit flow during 2012-13 to 2014-15, ranged from 63.2% to 68.8%, 5.9% to 6.9% and 25.3% to 29.2%, respectively. 4. Banking Benchmarks: The district’s per branch population at 5843 was lower than the State average of 6420. Deposits of banks recorded 25.4% and 20.1% growth while the advances grew at 21.4% and 13.4% during 2013-14 and 2014-15 respectively. Credit-Deposit (CD) ratio of the district had decreased from 95.7% as on 31 March 2014 to 90.4% as at the end of March 2015. Although CBs as a block, complied with the CD ratio norm of 60%, few CBs had not complied with the norm. All the stipulated Priority Sector lending norms except Differential Rate of Interest (DRI), were surpassed by all agencies in the district. While the submission of LBR 1, LBR 2/U2 was 100%, submission of LBR 3/U3 was 32% for the year 2014-15.

5. PLP projections:

5.1. NABARD in the year 2012-13 had prepared Base PLP for five years coterminous with the XII Five year plan (2012-17). The Base PLP projected a five year credit potential under priority sector covering Primary, Secondary and Tertiary sectors, with emphasis on the Primary sector. Since the finalisation of Base PLP, some of the parameters viz.,technical feasibility, availability of infrastructure and exploitable resources, cropping pattern, agriculture practices and other developmental indices such as access to markets, etc., have undergone a change on account of factors such as changes in Government’s priorities and policies, strengthening of rural infrastructure, market forces, cost escalation, etc., necessitating a relook at the credit potential for the year 2016-17.

5.2. In the base PLP, the projection estimated for 2016-17 under Priority Sector was, ` 3,668.17 crore. The projections under broad sectors were: Crop Production, Maintenance & Marketing `-2,151.97

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crore, ATL - ̀ 499.72 crore, MSE (including Food & Agro processing) - ̀ 143.53 crore and OPS - ̀ 872.95 crore. In addition to factors explained above, the following developments warrant a relook at the potentials and refinement of projections for 2016-17 estimated in the base PLP:

• As per the latest Agriculture Census (2010-11), small and marginal land holdings together are close to 89 per cent of total holdings (2010-11) and account for nearly 62 per cent of the cultivated area. Continuous decline in average size of land has implications for agriculture credit outreach. Banks find it increasingly difficult to finance asset generating investments, as they are not viable on marginal and small farms, unless they are also leased out to neighbouring farms.

• The Vision Document prepared by State Planning Board for the year 2020 has set a goal of achieving 90% of ultimate irrigation potential by the year 2020.

• Enforcement of ban on Gutka by the State Govt. will affect arecanut cultivation. • Significant increase in the demand for food crops due to Food Security Bill. • Revision in Unit costs and Scales of Finance.

5.3. The overall PLP projection for 2016-17 under Priority Sector is revised as ` 5210.10 crore. The broad sector/sub sector-wise projections for 2016-17 with pie chart, are given below.

6. Major Constraints and Action Points: Major constraints/infrastructure gaps are given under the respective sub-chapters. The sector-wise critical infrastructure having a bearing on credit potentials, which need to be provided by the State Govt. are given under Infrastructure Support chapter. 7. Area Based Schemes: Keeping in view the available natural resources, infrastructure and linkage support, the following activities are identified for further development in the district:

• Oil Palm cultivation in all taluks of Hassan district • Sheep, Goat and Piggery Development in Arsikere, C R Patna and H N Pura taluks

The details of these Area Based Schemes are given in chapter 12. The total credit requirement therefor is estimated as ` 1195.47 lakh which are a part of PLP 2016-17 projections and are included in Annexure I under respective sectors. The implementation of these Area Based Schemes will increase the flow of investment credit thus adding to the much needed capital formation at farm level.

8. Thrust Areas of PLP 2016-17:

The following areas have been identified for giving focused attention and thrust in the PLP 2016-17: • A potential for credit linkage of 7000 SHGs and 1500 JLGs with a total projection of ` 41000 lakh. • The dry and wet storage requirements are assessed as 75000 MT and 40000 MT respectively. • Area expansion under mango, guava and sapota crops in rainfed/watershed programmes areas. • Promoting and supporting three Producers' Organisations in Arsikere and S K Pura taluks.

9. Way Forward: The District has good potential for P & H crops, Aromatic plants and Dairy activities. Developing good infrastructure facilities would accelerate further flow of credit to priority sectors. Development of “Hassan Growth Centre” would greatly help in accelerating the overall economic development of the district. Crop diversification in agriculture, particularly to horticulture crops, floriculture, medicinal & aromatic plants and to off-farm activities viz., agro/food processing, skills & investments, improving the capabilities of the people through technical education, skill training and extension and bridging the gaps in agriculture and industrial infrastructure are needed to further boost the economy of the district.

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Broad sector-wise PLP projections for 2016-17 (` lakh)

Sr. No. Particulars PLP Projections 2016-17

A Farm Credit

i Crop Production, Maintenance and Marketing 271808.88

ii Term Loan for agriculture and allied activities 86246.49

Sub Total 358055.37

B Agriculture Infrastructure 44104.50

C Ancillary activities 12470.63

I Credit Potential for Agriculture (A+B+C) 414630.50

II Micro, Small and Medium Enterprises 35802.50

III Export Credit 0.00

IV Education 4760.00

V Housing 21250.00

VI Renewable Energy 867.15

VII Others 43000.00

VIII Social Infrastructure involving bank credit 700.00

Total Priority Sector (I to VIII) 521010.15

Agriculture , 79.58%

MSME , 6.87%

Education , 0.91%

Housing, 4.08%

Renewable Energy, 0.17%Others , 8.25%

Social Infrastructure , 0.14%

BROAD SECTORWISE PLP PROJECTIONS 2016-17

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Summary of Sector / Sub-sector wise PLP projections - 2016-17 (` lakh)

Sr. No.

Particulars PLP Projections 2016-17

I Credit Potential for Agriculture

A Farm Credit

i Crop Production, Maintenance and Marketing 271808.88

ii Water Resources 10719.00

iii Farm Mechanisation 14590.25

iv Plantation and Horticulture (including sericulture) 35258.76

v Forestry and Waste Land Development 551.25

vi Animal Husbandry – Dairy 16011.00

vii Animal Husbandry – Poultry 1634.63

viii Animal Husbandry – Sheep, Goat, Piggery, etc. 1871.10

ix Fisheries (Marine, Inland, Brackish water) 401.30

x Others – Bullock, Bullock cart, etc. 5209.20

Sub Total 358055.37

B Agriculture Infrastructure

i Construction of storage facilities (Warehouses, Market yards, Godowns, Silos, Cold storage units/ Cold storage chains)

8325.00

ii Land development, Soil conservation, Watershed development 30019.50

iii Others (Tissue culture, Agri bio-technology, Seed production,Bio pesticides/ fertilizers, Vermin composting)

5760.00

Sub Total 44104.50

C Ancillary activities

i Food and Agro processing 10110.63

ii Others (Loans to Cooperative Societies of farmers for disposing of their produce, Agri Clinics/ Agri Business Centres, Loans to PACS / FSS/ LAMPS, Loans to MFIs for on lending)

2360.00

Sub Total 12470.63

Total Agriculture 414630.50

II Micro, Small and Medium Enterprises

i MSME – Working capital 6775.00

ii MSME – Investment credit 29027.50

Total MSME 35802.50

III Export Credit 0.00

IV Education 4760.00

V Housing 21250.00

VI Renewable Energy 867.15

VII Others (Loans to SHGs/ JLGs, loans to distressed persons to prepay non- institutional lenders, PMJDY, loans to state sponsored organisations for SC/ST)

43000.00

VIII Social Infrastructure involving bank credit 700.00

Total Priority Sector 521010.15

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