An overview of crop loans in Karnataka

Farming remains the most significant sector of the Indian economy. It is also known as the backbone of the Indian economy. It has 45.5% of the total workforce involved in agricultural and allied sector activities (2021-22 Employment and Unemployment Scenario of India-Directorate General of Employment) and accounts for 18.3% of the country's Gross Value Added (GVA) for the year 2022-23 (Ministry of Statistics & Programme Implementation). The development of the agriculture sector further needs credit support. Agricultural credit is essential for the development of the agricultural industry and it helps to adopt modern farm equipment and technologies. The farming sector has many challenges such as poor capital formation, the difference among the regions, the small size of land holding, landless and poor labourers, non-institutional sources of credit at considerably high rates, etc. With this background, the present paper attempted to address the origin of crop loans in India, the performance of the financial institutions in providing crop loans, and the impacts of crop loans on the agriculture sector in Karnataka, as well as give some suggestions for improvement.