Increasing access to credit for the poor has always remained at the core of Indian planning in its fight against poverty. Nationalisation of banks, massive expansion of branch network in rural areas, mandatory directed credit to priority sectors of the economy, subsidised rates of interest and creation of RRBs & NABARD are some of the notable measures in this direction.
Though these measures resulted in impressive gains in rural outreach and volume of credit, the structure built up was “quantitatively impressive but qualitatively weak”. We still have a long way to go to fully realize the original objectives of inclusive growth.