PLP – JALGAON 2023-24 – Background Note with Projections

Background Note /papers - Potential Linked Credit Plan (PLP) -2023-24

Projections
To facilitate and bring about qualitative improvement in credit planning at district level,
NABARD has been preparing Potential Linked Credit Plan (PLP) every year since 1988-
89. PLP is a comprehensive document, indicating physical and financial projections, for
various economic activities having potential for development with bank credit. Along
with estimation of potential and of credit requirement for achieving that potential, PLP
also identifies the infrastructure available as well as gaps in infrastructure hampering
development of a particular sector to make the document a holistic one. In this respect,
PLPs can be construed as demand driven, which help bankers and planners at the
district level in achieving integrated rural development of the district.

The objective of identifying the exploitable potential is to further enable the policy
makers, especially the Central and State Governments to take a cue from this
document while finalizing their plans/budgets for the next year. The document thus
not only comes out with the road map for credit planning exercise at the district
level for finalizing the Annual Credit Plan of the district, but also to connect with the
infrastructural and institutional gaps and requirements to take it forward for a
possible outcome at the ground level by other stakeholders too.

This document is a culmination of an elaborate consultative process, between the

DDM and the stakeholders in the district such as the LDM, line departments, banks,
NGOs, and beneficiaries at the ground level. The document has been evolving and
attempts have been made to reflect the changes that are taking place in various
sectors.

The PLP forms the basis for Annual Credit Plan of the district. The exercise of
preparation of PLP for 2023-24 has begun with the Pre-PLP meeting (during DLCC) held
on 34 June 2022 at Collector Office. This background note with broad sector wise and
Sector / Subsector wise projections for 2023-24 is presented information and perusal.

Methodology for Preparation of Potential Linked Credit Plan (PLP)

Potential Linked Credit Plan is a comprehensive documentation of potentials in the
district for rural economic activities, both in physical and financial terms. It is also an
assessment of the gaps in infrastructure support which need to be filled in to fully
exploit the realizable potentials.

NABARD, in 1988-89, took initiative of preparing PLPs for agriculture and rural
development. The broad strategy followed by NABARD for the formulation of PLPs
envisages estimation of long term potential (in terms of physical units) in each sector of
agriculture and rural development with reference to the natural and human resource
endowments and a phased annual programme for development, keeping in view the
relative national and state priorities. NABARD has been constantly endeavoring to
introduce refinements in the methodology of preparing PLPs and physical potential in
major sectors of investment activity conducive to development of agriculture and rural
areas. The PLP writers – who are District Development Managers of NABARD placed in
most of the districts of the country – are supported by a group of technical
officers/experts in the Regional improvement of its contents so that the PLPs could be
used as support reference document for Annual Credit Plans of banks. NABARD has
been reviewing continuously the methodology in estimation of potential through
 PLP – JALGAON 2023-24 – Background Note with Projections

consultative process over the years. It adopts a detailed methodology for assessing the
Offices and Head Office of NABARD.

The methodology consists of assessment of sector-wise/subsector-wise estimation of

potential in consultation with technical officers of the concerned line departments at the
district level, identification of infrastructure facilities required to support the
exploitation of the potential, identification of infrastructure facilities available at
present as well as planned and working out the gap in infrastructure, examination of the
trends in sector-wise credit flow, various schemes of State/Central Govt., and estimation
of block-wise physical and financial credit potential. The indicative unit costs suggested
by the State level unit cost committee are made use of while arriving at the total
financial outlays.

The PLP 2023-24- Jalgaon

NABARD prepares Potential Linked Credit Plans (PLPs) to project credit potential under
the priority sectors covering Primary, Secondary and Tertiary sectors. These
projections are based on the parameters such as technical feasibility, availability of
infrastructure, availability of exploitable resources, cropping pattern, agriculture
practices and other developmental indices such as access to markets etc. PLPs also take
into account the factors such as the changes in the Government’s priorities and policies,
redefined MSME constituents, strengthening of rural infrastructure, market forces, cost
escalation etc. The PLP for 2023-24 has been prepared in tune with the revised Priority
Sector guidelines of Reserve Bank of India, with the chapters covering Agriculture,
MSME, Export Credit, Education, Housing, Social Infrastructure, Renewable Energy and
Other Priority sectors. A brief summary of the PLP 2023-24 is presented below:

1. District characteristics
Jalgaon district is situated in the northern part of Maharashtra. It has 15 blocks with a
total geographical area of 11.639 Lakh Ha. Out of 11.639 lakh ha of the total area, the
cultivable land is 8.48 lakh ha. The average rainfall of the district is 702.40 mm per
annum. The district population (2011 Census) is 42.30 lakh with 26.30 lakh (62.17 %)
in rural areas. As per the Agriculture Census 2015-16, there are 478904 land holders of
which 76.69% of the farmers (367275) belong to small & marginal farmers. They hold
48.67% of the land holding i.e. 380246 of total area of holding 781388 indicating
disparity in distribution of land. The average land holding in the district is 1.63 ha. The
major crops grown during Kharif are Cotton, Maize, Jowar, Pulses and Oilseeds and
during Rabi, Wheat, chickpeas (Harbhara), Maize. The cropping intensity is 138%. The
CD ratio as on 31.3.2022 was 56%. The district is known for banana and gold business
as well as producer of world class irrigation system. The district has also been
identified for implementation of PoCRA / Nanaji Deshmukh Krishi Sanjivani Prakalp.
2. Sectoral trends in credit flow
Total GLC of the district under priority sector was ₹ 5083.76 crore during 2019-20. ₹
4843.31 crore during 2020-21 and ₹ 5839.82 crore during 2021-22. The total
agricultural loans issued during the last three years were of ₹ 2373.89 crore, ₹3064.80
crore and ₹ 3486.13 crore respectively. The disbursements under MSME and other
priority sectors during the above period were of ₹ 2709.87 crore, ₹ 1778.51 crore and
₹ 2353.69 crore respectively. The share of agriculture in GLC (PSL) was 59.70% during
2021-22.
 PLP – JALGAON 2023-24 – Background Note with Projections

The district has 643 bank branches with 354 branches of Commercial Banks, 33
branches of UCBs, 18 branches of Gramin Bank, 238 branches of DCCB, besides 877
PACS affiliated to the DCCB, which cater to the credit needs of the rural population. Out
of the Total Advances amounting to ₹ 8399.48 crore disbursed by banks during 2021-
22, the disbursements under Priority Sector stood at ₹ 5839.82 crore and disbursement
under Non-Priority stood at ₹ 2559.66 crore . Achievement under ACP (priority sector)
during 2021-22 stood at 76% of the total ACP target (PSL). There is steady growth in
the disbursement under Agriculture after sudden downfall since 2018-19. Though the
lockdown / restrictions has affected MSME sector, the financing to SHGs remained
satisfactory. Considering the focus of Government on collectivization / FPO’s the credit
need of this segment is likely to increase over the coming years. The NBFC / MFIs and
also emergence of Small Finance Banks has ensured proper credit to SHG, JLGs, small
entrepreneurs, landless etc.
3. Sector/Sub-sector wise PLP projections for 2023-24
The PLP has been designed with an objective of making it a meaningful link between
development planning and credit planning processes. The potential under Priority
Sector that could be tapped with institutional credit during the year 2023-24 has been
assessed at ₹ 9170.83 crore as against ₹8862.81 crore projected for the year 2022-23
showing 3.48% growth over the previous year.
For the year 2023-24, while the potential under crop loans has been assessed at
₹3290.87 crore that of total agriculture loans is at ₹ 5372.13 crore. The percentage of
credit potential for Agriculture to total Priority Sector loans projected is 58.58%, while
that of MSME to total Priority Sector loans is 30.13%. The sectors such as Export Credit,
Education, Housing, Social Infrastructure, Renewable Energy and Others are projected
at 11.29% of total Priority Sector loans. The analysis and projections for some major
sub sectors are given below:
Crop Production, Maintenance and Marketing: Jalgaon has predominantly been a
pro-agriculture district and also well known for its ability to cater to the need of
supplying banana to the entire country. It is also known to be the largest producer of
cotton. We have assessed the potential of ₹3290.87 crore which is 35.88% of the total
projection of ₹ 9170.83 crore. The projections under crop loan has been kept almost
constant, taking into account the area under cultivation, actual GLC flow during
previous years, recovery, NPAs and number of farmers eligible for availing crop loan.
Agriculture Term Loan – Taking into account the implementation of CSS on FPO, AIF
and PM-FME, the projections have been assessed upward to ₹ 2081.26 crore for the
year 2023-24. Steady growth is observed in the GLC to this sector.
Micro, Small and Medium Enterprises (Investment and Working Capital): Micro,
small and medium enterprises are an important employment generating sector. With
revised definitions of MSME, the estimated potential of ₹2763.63 crore is assessed
under this sector which includes Investment Credit of ₹1587.38 crore and working
capital of ₹ 1176.25 crore. The assessment under WC is more as the existing units are in
need of short term credit which had suffered due to restrictions / lockdown imposed
due to COVID-19.
Others (Loans to SHGs, JLGs, Loans to distressed persons to prepay non-
institutional lenders, PMJDY, Loans to State Sponsored Organizations for SC/ST) :
In view of RBIs’ existing guidelines on priority sector vide Master Direction dated 04
September 2020 (updated till 02 August 2022), we have assessed PLP projection of ₹
472.57 crore for the year 2023-24.
4. Developmental initiatives
 PLP – JALGAON 2023-24 – Background Note with Projections

 ‘My Pad- My Right’ pilot project of NABFOUNDATION supported by NABARD is

under implementation in Jalgaon. Under this project a complete unit set up for
making the sanitary pads was given to the SHG. The machines, raw material,
training etc. was provided by NABFOUNDATION.
 NABARD has sanctioned 20 FPO Projects in Jalgaon of which 3 are under Dairy
sector. Many FPO’s have got the input licenses and have started business activities.
 NABARD has sanctioned first ever TDF Wadi project in Raver Block of Jalgaon
district covering 500 beneficiaries covering 450 Wadis and 50 Landless
beneficiaries.
5. Thrust areas for 2023-24
 Processing and export of Banana - The district is famous for its banana. The
district has been identified as Agri Export Zone for banana and onion. Under AEZ, it
is necessary to establish pre-cooling units, grading and packaging units and cold
storages at 2-3 centres located in the major producing area with a view to keep the
transport cost at the minimum possible. NABARD has prepared a draft report on
Banana Value Chain Financing with consultations of all the stakeholders.
 Fruit processing - These activities needs to be encouraged by setting up Exclusive
Processing Zones with infrastructure facilities like graders, dehydrators, cold
storage, etc.
 Collectivisation of farm produce and Development of FPOs - Indian farm
producers are unable to realize optimal value from their produce and progress
further due to fragmentation of land holdings and lack of organization.
6. Major constraints and suggested action points
 As against the total 268147 Ha Irrigation potential created under all types of
irrigation schemes, 231524 Ha has been brought under irrigation, leaving 36623 Ha
of potential created. Urgent work on repairs of the canals to restore their full
potential should be undertaken.
 The issue of open canal or piped canal has not yet been resolved, hence, the work
has not yet started for distribution network. The Head work of Varkhede Londhe
project is completed as per sanction but the storing of water has not started due to
pending rehabilitation of Tamaswadi village
 There is a need to propagate farm mechanization through farmers group / FPOs.
 The KCC for AH and Fisheries whereby the farmers are provided Working Capital
may be extended to all the eligible farmers. Special focus is required to cover the
poor fisheries farmers under bank credit.
7. Way forward
The district has good potential for Agriculture and its allied activities. Adoption of
proper package of sustainable agricultural practices, integrating farming systems and
developing good infrastructure facilities would accelerate flow of credit to priority
sectors. Infusion of latest technology, skills and investments, improving the capabilities
of people through technical education and bridging the gaps in agriculture and
industrial infrastructure would help in increasing the farm productivity and farmers’
income. Banks may play an active role in financing the critical infrastructure through
private investment. Since reporting under LBS system has undergone a change, there is
a need for a coordinated approach by all the stakeholders for regular monitoring and
review in BLBC and DLCC meetings.
 PLP – JALGAON 2023-24 – Background Note with Projections

*****

BROAD SECTOR-WISE PROJECTIONS – 2023-24 (APPENDIX-A)

Amount in Lakh Rs

Sr.No Particulars PLP Projections 2023-24

A Farm Credit
I Crop Production, Maintenance and Marketing 329087.33
II Term Loan for agriculture and allied activities 146956.58
Sub Total 476043.91
B Agriculture Infrastructure 31139.52
C Agri Ancillary activities 30029.87
I Credit Potential for Agriculture (A+B+C) 537213.30
II Micro, Small and Medium Enterprises 276362.50
III Export Credit 2048.00
IV Education 3573.00
V Housing 47500.00
VI Renewable Energy 890.40
VII Others 47257.50
VIII Social Infrastructure involving bank credit 2238.72
Total Priority Sector (I to VIII) 917083.42

Agriculture Anci ,
30029.87, 3%
MSME; 276362.5; 30%

Agriculture Infra,
31139.52, 3%

TL for Agri & Allied,

146956.58, 16%
Renewable Energy,
890.4, 0.2% Total Priority Sector
₹ 917083 lakh
Export Credit,
2048, 0%

Housing; 47500; 5%
Education ; 3573; 0%

Others; 47257.5; 5%
Crop Production,
Social Infrastructure, 329087.33, 36%
2238.72, 0%
 PLP – JALGAON 2023-24 – Background Note with Projections

APPENDIX B

SUB SECTOR-WISE PLP PROJECTIONS FOR THE YEAR 2023-24

STATE: MAHARASHTRA DISTRICT: JALGAON

PLP Projections
Sr. No. Particulars
2023-24
I Credit Potential for Agriculture
A Farm Credit
i Crop Production, Maintenance & Marketing 329087.33
ii Water Resources 24127.20
iii Farm Mechanisation 18266.33
iv Plantation & Horticulture (including Sericulture) 12800.51
v Forestry & Wasteland Development 7296.00
vi Animal Husbandry - Dairy 26333.53
vii Animal Husbandry - Poultry 17803.64
viii Animal Husbandry - Sheep, Goat, Piggery, etc. 26952.00
ix Fisheries 10534.17
x Others - Bullock, Bullock Cart, etc. 2843.20
Sub-total [Farm Credit] 476043.91
B Agriculture Infrastructure
Construction of Storage Facilities (Warehouses, Market Yards, Godowns,
i Silos, Cold Storage Units / Chains 14275.52
ii Land Development, Soil Conservation, Watershed Development 10924.00
Others (Tissue Culture, Agri Bio-Technology, Seed Production, Bio-
iii pesticides / Fertilizers, Vermi-composting) 5940.00
Sub-total [Agriculture Infrastructure] 31139.52
C Ancillary Activities
i Food & Agro Processing 25853.07
Others (Loans to Coop. Soc. Of Farmers for disposing of their produce,
ii ACABCs, Loans to PACS/FSS/LAMPS, Loans to MFIs for on lending) 4176.80
Sub-total [Ancillary Activities] 30029.87
Total Agriculture 537213.30
II Micro, Small and Medium Enterprises
i MSME - Investment Credit 158737.50
ii MSME - Working Capital 117625.00
Total - MSME 276362.50
III Export Credit 2048.00
IV Education 3573.00
V Housing 47500.00
VI Renewable Energy 890.40
Others (Loans to SHGs, JLGs, Loans to distressed persons to prepay non-
institutional lenders, PMJDY, Loans to State Sponsored Organisations for
VII SC/ST 47257.50
VIII Social Infrastructure involving Bank Credit 2238.72
Total Priority Sector 917083.42
 PLP – JALGAON 2023-24 – Background Note with Projections

Final Comment:
Apart from the abovementioned aspects in different paragraph, GLC for the last 5 years
to the particular sector, various programmes / schemes declared by the Central and
State Govt., Changes taken place in the particular sectors in last 5 years etc. were also
taken into consideration while accessing the potential.

Though concerted efforts were made to estimate the potentials realistically, some
limitations and constraints are noticed in the exercise of PLP preparation are Non-
Availability of accurate granular data on credit flow – Sector and sub-sector-wise; and
Non-availability of data required for estimation of potential in some sectors with the
line Depts.

In view of the forgoing, we feel that the projections made by us are realistic, scientific
and justifiable to the extent possible. They are also in tune with the projections made at
State Level by NABARD. It can be observed from the overall projections that in many
sectors we have reduced the projections over previous year though the overall growth
in the assessment under PSL is projected to be 3.36%.

(Shrikant Zambre)
DDM, NABARD
Jalgaon
15.09.2022