Impact of credit on sustainable agricultural development in India

Abstract

ABSTRACT Agricultural credit works as a most important factor in a developing country like India, where 70% of the population resides in the rural area that is still dependant on agriculture. Sustainable development of agriculture depends upon the available natural resources, and in India, the natural resources and climate are favourable for production. This study examines the short-term and long-term effect of bank's credit on the agricultural sector growth. Using the secondary data from 1990 to 2019 the ARDL Bound test has been conducted to check the relationship between the variables. In the study we found that in the long run credit, interest rate and inflation rate have positive impact on the agricultural development, whereas in the short run credit and inflation rate have a significant impact, but the interest rate has no significant impact on the agricultural development.