What constitutes ‘Indirect Finance’ to Agriculture ?
Indirect finance denotes to finance provided by banks to farmers indirectly, i.e., through other agencies. Important items included under indirect finance to agriculture are as under : (i) Credit for financing the distribution of fertilisers, pesticides, seeds, etc. (ii) Loans upto Rs. 25 lakhs granted for financing distribution of inputs for the allied activities such as, cattle feed, poultry feed, etc. (iii) Loans to Electricity Boards for reimbursing the expenditure already incurred by them for providing low tension connection from step-down point to individual farmers for energising their wells. (iv) Loans to State Electricity Boards for Systems Improvement Scheme under Special Project Agriculture (SI-SPA). (v) Deposits held by the banks in Rural Infrastructure Development Fund (RIDF) maintained with NABARD. (vi) Subscription to bonds issued by Rural Electrification Corporation (REC) exclusively for financing pump-set energisation programme in rural and semi-urban areas and also fo
