Agricultural credit and agricultural productivity across Indian states: An analysis

The study analyses the relationship between formal agricultural credit and agricultural productivity in India. Secondary data have been collected from various sources for the selected states of Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Odisha, Tamil Nadu, Uttar Pradesh and West Bengal for the time period 1990–1991 to 2017–2018. Fixed effect model is used to perform the state‐level panel data analysis to establish the relationship between the agricultural credit and agricultural productivity. In addition to this, the study also focuses on analysing the effectiveness of Doubling of agricultural credit policy. The findings from the analysis show that direct agricultural credit and doubling of agricultural credit policy has a positive impact on productivity, whereas the indirect credit has a significant negative impact on productivity. In order to increase agricultural productivity, policies should focus on providing direct credit at a larger scale.