Mixed credit growth under Annual Credit Plan shows improvement, but sectoral imbalance raises concerns. Agriculture lags, MSMEs gain, and non-priority sectors dominate lending, highlighting urgent need for policy correction to ensure inclusive and equitable credit distribution.
A modest rise in overall credit flow has been recorded under the Annual Credit Plan (ACP), but deeper analysis reveals uneven sectoral distribution that could undermine inclusive economic development. The latest disbursement figures point to progress in aggregate numbers, yet highlight persistent gaps in priority sectors, especially agriculture and weaker segments.
According to the latest data, total credit disbursement increased from Rs. 9,846.59 crore in 2024–25 to Rs. 12,281.52 crore in 2025–26 (up to December), achieving 72 percent of the annual target of Rs. 17,000 crore. This represents a 4 percentage point improvement compared to last year’s 68 percent achievement. While the overall expansion signals improved lending activity, the distribution of funds across sectors remains uneven and raises concerns about the effectiveness of credit outreach.
The agriculture sector, which forms the backbone of the state’s economy, continues to lag behind expectations. Against a target of Rs. 4,000 crore, disbursement reached only Rs. 2,323.78 crore, translating to 58 percent achievement. This marks only a marginal rise from 57 percent in the previous year, indicating that structural challenges in farm credit delivery persist despite policy focus on rural financing. Limited access, procedural hurdles, and weak last-mile connectivity are often cited as key obstacles in this segment.
In contrast, the MSME sector has shown encouraging progress. Credit disbursement rose sharply to Rs. 3,975.39 crore against a target of Rs. 5,040 crore, achieving 79 percent of the target. This is a notable improvement from 70 percent in the previous year, reflecting stronger institutional support and targeted lending initiatives aimed at small and medium enterprises. The upward trend suggests growing confidence in the MSME segment as a driver of economic activity and employment.
However, the “Other Priority Sector” category has experienced a significant setback. Disbursement declined from Rs. 1,397.79 crore (74 percent achievement) in 2024–25 to Rs. 984.83 crore (45 percent achievement) in 2025–26. This sharp 29 percentage point drop raises concerns about reduced credit access for segments that often include vulnerable and underserved groups.
Overall, priority sector lending slightly dipped from 66 percent to 65 percent of the target, despite higher absolute disbursement figures. In contrast, the non-priority sector recorded strong growth, with achievement levels rising from 73 percent to 87 percent and disbursement reaching Rs. 4,997.52 crore. This shift suggests a growing preference among financial institutions for non-priority lending segments.
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Economic analysts have pointed out that while the increase in total credit flow is a positive development, the imbalance across sectors needs urgent attention. Strengthening delivery mechanisms, simplifying procedures, and improving monitoring systems could help ensure that credit reaches intended beneficiaries more effectively. Without corrective measures, the current trend risks widening disparities and limiting the broader developmental impact of credit expansion.
