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EXECUTIVE SUMMARY The theme for the PLP 2016-17 is “Accelerating the pace of capital formation in agriculture and allied sector”.

I. Salient features of Neemuch District

Neemuch has been declared as a separate district by MP Govt as on 30th June 1998. Earlier it was a part of the Mandsaur district. Neemuch district is situated in the Malwa Region North West border of Madhya Pradesh. It has 03 blocks with a total geographical area of 3875 sq. km constituting 1.26% of the total area of the State. During British rule an army cantonment was established here. After independence, this cantonments has been converted into cantonments of paramilitary forces by the Govt. of India. Presently it is known as C.R.P.F. Neemuch is also known as birth place of C.R.P.F. Neemuch is also known as India’s Eye donation capital as it accounts for the highest per capita eye donation rate in the country. The average rainfall of the district is 833.9 mm per annum which precipitates in about 90 days. The district population (2011 Census) is 8.26 lakh with 5.81 lakh in rural areas which is 1.00 lakh higher than the population of Census 2001 that constitutes a decadal growth of 13.75% that is below the States’ decadal growth of 20.3% which can be viewed as a healthy indicator on this front. The population below poverty line is 24.21%. The Gross Domestic Product (GDP) of the district is 1.24% of the state GDP. The main crops grown in the district are Soyabean, wheat, maize & Garlic. Total Gross Cropped and Net Cropped area is 249740 ha (decreased from 287520 ha GCA of last year due to hailstorm and excess rainfall) and 184300 ha respectively. The total irrigated area as a percentage to net sown area is 67.62%. The major source of irrigation in the district is wells which occupy 58.68% of the total irrigated area followed by tube wells (32%). Average land holding has been decreased from 2.16 on 2009-10 to 1.52 on 2010-11. During 2014-15, there were 301 small and tiny industries with an investment of ₹ 881.92 lakh providing employment to 747 persons, 2 Large and Medium Industrial Units with total investment of ₹ 49.06 crore

providing employment to 228 persons were established in the district.

a) Ground Level Credit Flow (GLC)

Total GLC of the district under priority sector which was ₹439.03 crore during 2012-13, increased to ₹ 481.11 crore during 2013-14 and further to ₹ 732.49 crore during 2014-15.

The agricultural loans issued during the last three years were ₹373.40 crore, ₹412.06 crore and ₹ 578.06 crore respectively. The disbursements under NFS (incl. OPS) during the above period were ₹65.62 crore, ₹69.05 crore and ₹ 154.43 crore respectively. The share of agriculture in GLC which stood at 85% during the last 2 years but decreased to 78.92% during 2014-15.

b) Agriculture Term Loan:

Agriculture Term Loan constituted 7.61% of the total agriculture lending during 2013-14 which even reduced to 4.44% during 2014-15. Per hectare ATL was only ₹ 1288/- during 2014-15 which found to be very poor. All the banks have to lend aggressively in this sector. Banks have to prepare Area Base Plan on dairy, fishery, Horticulture, Irrigation etc. and credit linkages in these sector will improve the ATL in the district. Horticulture sector is playing pivotal role in production but bank credit is very minimal in this sector.

c) Micro and Small enterprises:

Neemuch district has done tremendously well in MSME sector. Against the target of 32 crore, ₹109 crore was disbursed during 2014-15 which accounted for 338% achievement of the target. State Govt. has also awarded the district administration for the contribution.

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d) Highlights of banking benchmarks

The district has 85 bank branches with 53 branches of Commercial Banks, 17 branches of Gramin Bank, 15 branches of DCCB, 2 branches of Land Development Bank and 68 PACS. The performance of banks in achieving the parameters stipulated by RBI was satisfactory under Priority Sector Advances such as CD ratio of 72.54%, PSA advances of 53%, Agricultural Advances of 42%, as against the stipulation of 60%, 40% and 18%

respectively. The total deposits and loans outstanding of all the banks in the district were ₹1916.42 crore and ₹1390.12 crore respectively as on 31.3.2015 with an overall growth rate of 18.82% and 50% respectively compare to last year. Submission of

LBRs by banks at 90% needs to be improved. Achievement under ACP 2014-15 at ₹732.49 crore formed 100% of the target. Under Pradhan Mantri Jan Dhan Yojna (PMJDY), all the rural & urban households were covered under financial inclusion. Recently 3 social security schemes were launched viz., Pradhan Mantri Jivan Jyoti Bima Yojna (PMJJBY), Pradhan Mantri Suraksha Bima Yojna (PMSBY) and Atal Pension Yojna (APY). Coverage of households under these shames is only 19.17% by July 2015 and maximum coverage is under PMSBY and minimum coverage is in APY which needs to be improved.

e) Sectoral assessment of potential as per the revised RBI guidelines for Priority sector lending: RBI Through circular no. FIDD.CO.Plan.BC.04/04.09.01/2015-16 dated 01 July 2015 has revised the Priority sector lending and prescribed sub-targets of 7 per cent by March 2016 and 8 per cent by March 2017 and 7 per cent by March 2016 and 7.5 per cent by March 2017 of Bank’s ANBC to Small and Marginal Farmers and SME respectively and Categorised the priority sector activities of (i) Agriculture (ii) Micro, Small and Medium Enterprises (iii) Export Credit (iv) Education (v) Housing (vi) Social Infrastructure (vii) Renewable Energy (viii) Others. Accordingly, the potential, under Priority Sector, in each sector / sub sector for 2016-17 that could be tapped with institutional credit has been assessed. The potential has been assessed at ₹1129.40 crore as against ₹905.16 crore for the year 2015-16 showing

24.77% growth over previous year. The potential under various sectors include crop loans ₹814.64 crore, investment credit for agriculture comprising various sectors viz., Water Resources, Land Development, Farm Mechanisation, Forestry, Dairy Development, Poultry, Sheep/goat/piggery, Fisheries, Storage Godowns & Market Yards and Other activities at ₹179.16 crore, Agriculture infrastructure ₹24.02 crore & Ancillary activities ₹ 18.72 crore, MSME ₹32.49 crore, Export credit ₹4.00 crore, Education ₹4.35 crore, housing ₹36.72 crore, renewable energy ₹ 6.72 crore, others ( Loans to SHGs/JLGs and OD under PMJDY) ₹5.85 crore and social infrastructure ₹ 2.74 crore. The shares of crop loan, agriculture term loan including infrastructure and ancillary activities, MSME & OPS (Export credit, Education, housing, renewable energy, others and social infrastructure) are 72.13%, 19.65%, 2.88% & 5.34% respectively. The share of Agri Term Loans (including Agriculture infrastructure & Ancillary activities) to total credit potential for agriculture is 21.41%. The potential has been assessed keeping in view the GoI/GoMP’s priorities, existing/likely improvements in infrastructure, past GLC, revision in SoF/Unit Cost and various subsidy schemes of GoI/GoMP. Some of the major constraints envisaged in achieving the potential assessed are inadequate extention services, lack of post-harvest facilities for horticulture crops, absence of milk routes in a major portion of the district. Forward and backward linkages such as quality planting material, post-harvest facilities, organised marketing facilities for P & H and floriculture crops could trigger exploitation of latent potential for P & H sector in the district etc. Implementation of Vision 2018 document of GoMP would go a long way in realizing the potentials assessed.

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II. Thrust areas and Developmental Initiatives of NABARD

Shri Arvind Panagariya, Vice Chairman, NITI Aayog has quoted that: “There can be little disagreement that the fastest relief to the poor in India would come from productivity growth in agriculture. This is where nearly half of the workforce is employed. With the share of agriculture in the GDP at about 15 percent now, this half of the workforce is also significantly poorer than the other half, employed in industry and services”.

In order to realise the said quote and theme envisaged in the document, viz., Accelerating the pace of Capital Formation in Agriculture and Allied sector, a few Area Based Schemes have been identified. The sectors identified are Dairy and Handloom activity. Tentative banking plans have been prepared for these activities. An estimated amount of ₹81.00 lakh is expected to be financed by banks under these models. The models indicated are only pilots and it is expected that more such schemes will be prepared by banks.

NABARD had also identified a few thrust areas for 2016-17 viz., JLG/SHG financing, micro warehousing, improving dairy development, Producer Organizations, etc. To promote the above areas, NABARD has also initiated several developmental activities in the form of support to Self Help/JLG Promoting Institutions, conduct of workshops, seminars, training camps, support to farmers clubs, FPOs, farm productivity improvement schemes, Natural Resource Management through Watershed, loan based training for NFS development, etc.

III. Infrastructure

The district fares fairly well under some of the infrastructure indicators such as electricity, roads, transportation, communication etc. where the ranking of the district is better than the State average. However certain other indicators such as Irrigation, cropping intensity, female education etc. are lower than the State average. Infrastructure facilities act as catalysts in the development. The total loan amount sanctioned under RIDF till 31 March 2015 is ₹175.31 crore covering 44 projects. Nearly 90% of the RIDF projects were implemented towards development of irrigation and roads works which would help for development of agriculture. In order to improve the credit off-take in the district, the State Govt may consider improving the various critical infrastructure identified in the district viz., setting up of soil-testing laboratories in each block, strengthening the existing extension network, technology transfer, improving irrigation, popularisation of improved agricultural implements and machinery through demonstrations in farmers' fields, popularizing high density cropping systems, improving animal health care, activating/increasing the milk routes, establishment of poultry/fish hatcheries, establishment of fish markets, improving road network, uninterrupted power supply to the industries, etc. There are certain critical infrastructure which can be supported through private investment in the district viz., setting up of warehouses, micro warehouses, cold storages/cold chains, etc. Banks have to play an active role in financing such investments.

IV. Conclusion:

In order to achieve the overall credit potential assessed and in particular to enhance the capital formation in Agriculture in the district, there is a need to have a coordinated approach by all the stakeholders, viz., banks, Govt. Departments and NGOs. The reporting system by banks through LBRs (specially new I to V LBRs initiated by RBI recently in wake

of revised PSL guidelines), regular monitoring of achievements vis-à-vis the targets in DLCC/BLBC meetings assume greater importance. The implementation of SHG, JLG, RuPay enabled KCC and Financial Inclusion, Social security schemes drive will ultimately result in achieving the various objectives of inclusive growth in the rural areas of the district.

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Appendix A to Annexure 1

Broad Sector wise PLP projections - 2016-17

(` lakh)

Sr.No. Particulars PLP Projections

2016-17

A Farm Credit

i Crop Production, Maintenance and Marketing 81464.50

ii Term Loan for agriculture and allied activities 17916.12

Sub Total 99380.62

B Agriculture Infrastructure 2401.59

C Ancillary activities 1871.63

I Credit Potential for Agriculture (A+B+C) 103653.84

II Micro, Small and Medium Enterprises (MSME) 3249.00

III Export Credit 400.00

IV Education 435.00

V Housing 3672.00

VI Renewable Energy 671.54

VII Others 585.00

VIII Social Infrastructure involving Bank Credit 274.05

Total Priority Sector ( I to VIII ) 112940.43

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Appendix B to Annexure 1

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 81464.50

ii Water Resources 5504.83

iii Farm Mechanisation 2487.24

iv Plantation and Horticulture ( including sericulture) 1404.34

v Forestry and Waste Land Development 156.60

vi Animal Husbandry – Dairy 7522.30

vii Animal Husbandry –Poultry 165.54

viii Animal Husbandry – Sheep, Goat , Piggery, etc. 286.47

ix Fisheries ( Marine, Inland, Blackish water) 108.00

x Others – Bullock, Bullock cart, etc. 280.80

Sub Total 99380.62

B Agriculture Infrastructure

i Construction of storage facilities ( warehouse, market yards, godowns,

silos, cold storage units/cold storage chains) 1961.25

ii Land development, Soil conservation, Watershed development 271.80

iii

Others ( Tissue culture, agri bio-technology, Seed production, bio

pesticides/fertilizers,vermi composting 168.54

Sub Total 2401.59

C Ancillary activities

i Food and Agro processing 1656.00

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

215.63

Sub Total 1871.63

Total Agriculuture 103653.84

II Micro, Small and Medium Enterprises (MSME)

i MSME – Working Capital 1368.00

ii MSME – Investment Capital 1881.00

Total MSME 3249.00

III Export Credit 400.00

IV Education 435.00

V Housing 3672.00

VI Renewable Energy 671.54

VII Others ( Loans to SHGs/JLGs, Loans to distressed persons to Repay non-institutional lenders, PMJDY, Loans to State Sponsored

organizations to SC/ST)

585.00

VIII Social Infrastructure involving Bank Credit 274.05

Total Priority Sector 112940.43

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BROAD SECTOR-WISE PLP PROJECTIONS – 2016-17

DISTRICT MAP OF NEEMUCH

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