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Thursday, 9 June 2016

Indian Banking System: 3 Phases of Indian Banking System

Indian Banking System: 3 Phases of Indian Banking System


Phases of Indian Banking System are summarized below: 
Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors.
For the past three decades India’s banking system has several outstanding achievements to its credit. The most striking is its extensive reach; it is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even the remote comers of the country. This is one of the main reasons of India’s growth process.
The government’s regular policy for Indian bank since 1969 has paid rich dividends with the nationalisation of 14 major private banks of India.
Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice, Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dial a pizza. Money have become the order of the day.
The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases.
They are as mentioned below:
i. Early phase from 1786 to 1969 of Indian banks.
ii. Nationalisation of Indian Banks and up to 1991 prior to Indian banking sector Reforms.
iii. New phase of Indian Banking System with the advent of Indian Financial and Banking Sector Reforms after 1991.
To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and Phase III.

Phase I:

The Genera; Bank of India was set up in the year 1786. Next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1806), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called them Presidency Banks. These three banks were amalgamated m 1921 and imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders.
In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1885 and 1913, Bank of India Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up Reserve Bank of India came in 1935.
During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with the Banking Companies Act, 1949 which was later changed to Banking Regulation Act, 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive power for the supervision of banking in India as the Central Banking Authority.
During those day’s public has lesser confidence in the banks. As an aftermath deposit mobilisation was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders.

Phase II:

Government took major steps in the Indian Banking Sector Reform after independence. In 1955, it nationalised Imperial Bank of India with extensive banking facilities on a large scale specially in rural and semi urban areas. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country.
Seven banks forming subsidiary of State Bank of India were nationalised on 19th July 1959. In 1969, major process of nationalisation was carried out. It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi 14 major commercial banks in the country was nationalised.
Second phase of nationalisation in Indian Banking Sector Reform was carried out in 1980 with six more banks. This step brought 80% of the banking segment in India under Government ownership.
The following are the steps taken by the Government of India to Regulate Banking Institutions in the country.
i. 1949: Enactment of Banking Regulation Act.
ii. 1955: Nationalisation of State Bank of India.
iii. 1959: Nationalisation of SBI subsidiaries.
iv. 1961: Insurance cover extended to deposits.
v. 1969: Nationalisation of 14 major banks.
vi. 1971: Creation of credit guarantee corporation.
vii. 1975: Creation of regional rural banks.
viii. 1980: Nationalisation of 6 banks with deposits over 200 crore.
After the nationalisation the branches of the public sector banks in India rose to approximately 800% and deposits and advances took a huge jump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions.

Phase III:

This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was setup by his name which worked for the liberalisation of banking practices.
The country is flooded with foreign banks and their ATM stations. Efforts are being made to give a satisfactory service to customers. Phone banking and net banking is introduced. The entire system became more convenient and swift. Time is given more importance than money.
The financial system of India has shown a great deal of resilience. It is sheltered from any crisis triggered by any external macro-economics shock as other East Asian Countries suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the capital account is not yet fully convertible, and banks and their customers have limited foreign exchange exposure.

HISTORY OF BANKING IN INDIA

The origin of western type commercial Banking in India dates back to the 18th century. The story of banking starts from Bank of Hindustan established in 1770 and it was first bank at Calcutta under European management. It was liquidated in 1830-32. From Bank of Hindustan in 1770, the evolution of banking in India can be divided into three different periods as follows: Phase I: Early phase of primitive Indian banks to Nationalization of Banks in 1969 Phase II: From Nationalization of India banks in 1969 up to advent of liberalization and banking reforms in 1991 Phase III: From Indian Financial and Banking Sector Reforms 1991 onward In 1786 General Bank of India was set up. Since Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, it became a banking center. Three Presidency banks were set up under charters from the British East India Company- Bank of Calcutta, Bank of Bombay and the Bank of Madras. These worked as quasi central banks in India for many years. The Bank of Calcutta established in 1806 immediately became Bank of Bengal. In 1921 these 3 banks merged with each other and Imperial Bank of India got birth. Imperial Bank of India was later renamed in 1955 as the State Bank of India. Thus, State bank of India is the oldest Bank of India. In 1839, there was a fruitless effort by Indian merchants to establish a Bank called Union Bank. It failed within a decade. Next came Allahabad Bank which was established in 1865 and working even today. The oldest Public Sector Bank in India having branches all over India and serving the customers for the last 145 years is Allahabad Bank. Allahabad bank is also known as one of India’s Oldest Joint Stock Bank. However, the Oldest Joint Stock bank of India was Bank of Upper India established in 1863 and failed in 1913. The first Bank of India with Limited Liability to be managed by Indian Board was Oudh Commercial Bank. It was established in 1881 at Faizabad. This bank failed in 1958. The first bank purely managed by Indians was Punjab National Bank, established in Lahore in 1895. The Punjab national Bank has not only survived till date but also is one of the largest banks in India. However, the first Indian commercial bank which was wholly owned and managed by Indians was Central Bank of India which was established in 1911. So, Central Bank of India is called India’s First Truly Swadeshi bank.

Provision of Urban Amenities in Rural Areas (PURA)

Provision of Urban Amenities in Rural Areas (PURA)
I. Objective / purpose
Vision / Mission Statement
Holistic and accelerated development of compact areas around a potential growth centre in a Gram
Panchayat (or a group of Gram Panchayats) through Public Private Partnership (PPP) framework for
providing livelihood opportunities and urban amenities to improve the quality of life in rural areas.
Brief history
In pursuance to the announcement of Prime Minister on Independence Day, 2003, the Planning
Commission submitted a proposal for approval of the Government to implement PURA scheme. The
scheme was approved by the Government in „in-principle‟ in January 2004. Subsequently, MoRD
implemented the PURA scheme on a pilot basis in seven clusters for a period of three years (2004-
05 to 2006-07). It was approved with retrospective effect by the Cabinet in its meeting on 16.03.06
with the direction to restructure the PURA scheme. The pilot phase of PURA was evaluated by
National Institute of Rural Development (NIRD). Based on the experience learnt during the pilot
phase, evaluation conducted by NIRD of pilot phase and the technical support of Asian
Development Bank (ADB), the PURA scheme has been restructured. The restructured PURA
scheme has been approved by the Government for implementation on a pilot basis during the 11th
five year plan.
Duties
(i) Laying of policy guidelines
(ii) Selection of private developers for implementation of the scheme
(iii) Release of funds to the DRDAs
(iv) iv) Monitoring and evaluation of performance
Main activities / functions
Formulation of policy guidelines, release of funds under PURA scheme, selection of private
developers and its monitoring and evaluation.
List of services being with a brief write – up on them
 Formulation of guidelines for implementation of
PURA scheme.
 Evaluation and approval of Detailed Project Report
 Release of funds to DRDAs
 Convening the meeting of Project Screening and Monitoring Committee (PSMC) Inter –
Ministerial Empowered Committee (EC) Central Level for approving the projects
 Monitoring / Evaluations
 Grievance redressal mechanism
Organizational Structure Diagram at various levels namely State, directorate, region, district,
block etc
Expectation of the public authority from the public for enhancing its effectiveness and
efficiency
To access the disclosures made in the public domain and to bring to notice any deviation from stated
policy.
Arrangements and methods made for seeking public participation / contribution
Stakeholders are consulted on policy matters through meetings, conferences and written
correspondence etc.
Mechanism available for monitoring the services delivery and public grievance resolution
IT based Monitoring and evaluation mechanism, Right to Information Act, 2005.
Besides, in order to ensure proper monitoring and supervision of performance by the Private
Developer, an Independent Engineer will be provided to the PURA cluster of Gram Panchayat
(s) to supervise and monitor performance during the project life cycle.
II. Please provide details of the powers and duties of officers and employees of the organization
I. Laying of policy guidelines
II. Issue Expression of Interest (EoI) for selection for Private Developer
III. Release of funds to the DRDAs which will further release the funds to private developer
after completing necessary formalities
IV. Monitoring and evaluation of performance
Project Screening and Monitoring CommitteeResponsible
for monitoring of progress of sanctioned
projects
Inter Ministerial Empowered Committee –
To approve the project proposals and approve the different
stages of project transaction
District level Committee under the chairmanship of
District Magistrate for local level monitoring and grievance
handling.
III. Please provide list of rules, regulations, instructions, manual and records, held by public
authority or under its control or used by its employees for discharging functions as per the
following format. This format has to be filled for each type of document
Files, audit reports, copy of the Concession Agreement and State Support Agreement, Scheme
guidelines, program implementation plans
Name /Title of document Scheme guidelines
Type of document
Choose one of the types given below (Rules,
Regulations, Instructions, manual, Records,
others)
Others
Brief write-up on the document Based on Ministry of Rural Development‟s
extensive consultations with various stakeholders
including the States Government, departments /
ministries and in consultation with Asian
Development Bank, the guidelines for PURA
scheme have been prepared. The guidelines are
an operating manual for the government and
other stakeholders. It also provides the road map
for fund disbursal, grievance redressal and
dispute resolution, etc.
From where one can get a copy of rules,
regulations, instructions, manual and records
PURA Section,
Ministry of Rural Development,
R. No. 561, Hotel Samrat, Chankyapuri,
New Delhi – 110 021.
Besides, it is also available on the website.
Fee charged by the department for a copy of
rules, regulations, instructions, manual and
records (if any)
No Fee
IV. Whether there is any provision to seek consultation / participation of public or its
representatives for formulation of policies? If there is, please provide details of such policy in
following format
S.
N
o.
Subject / Topic Is it mandatory to
ensure public
participation (yes/no)
Arrangements for seeking public
participation
1 Policy matters
relating to PURA
No
PURA policy matters are considered in
consultation with the stakeholders i.e. the
different Departments / Ministries, States /
UTs, etc through meetings and written
correspondence.
V. Use the format given below to give the information about the official documents. Also mention
the place where the documents are available e.g. at secretariat level, directorate level, others
(Please mention the level in place of writing “Others”)
S.
No.
Category of the
document
Name of the document Procedure to obtain
the document
Held under
custody of
1 Scheme
Guideline
Provision of Urban
Amenities in Rural Areas
(PURA) – a Public Private
Partnership (PPP) Scheme
Available in PURA
Section as well as on
the website
Ministry of
Rural
Development
VI. Please provide information on Boards, Councils, Committees and other Bodies related to the
public authority in the following format.
Name and address of the Affiliated Body
Type of Affiliated Body (Board, Council,
Committees, Other Bodies)
Inter-Ministerial Empowered Committee (EC)
Project Screening and Monitoring Committee
(PSMC)
Brief introduction of the Affiliated Body
(Establishment Year, Objective/Main Activities)
EC and PSMC have been constituted in May
2010. The EC shall give approval to different
stages of project transaction and take all decisions
incidental to the project. The PSMC shall examine
and evaluate the responses to EoI, proposals
including Concept Plans submitted in response to
RFPs and the DPRs prepared by Private
Developers. The PSMC shall also be responsible
for monitoring of progress of sanctioned projects.
Role of Affiliated Body (Advisory/Managing/
Executive/Others)
Advisory, Managing and Executive.
Structure and Member Composition The composition of EC and given below.
Head of the Body EC is headed by Secretary (RD) and PSMC is
headed by Joint Secretary in charge of PURA
Scheme.
Address and main office and its Branches Ministry of Rural Development,
Krishi Bhawan, New Delhi.
PURA Division is housed at
Room No. 561,
5
th Floor, Hotel Samrat,
Chanakyapuri,
New Delhi – 110 017.
Frequency of Meetings As required.
Can public participate in the meetings? No
Are minutes of the meetings prepared? Yes
Not Applicable.
The composition of Inter-Ministerial Empowered Committee (EC) and Project Screening and
Monitoring Committee (PSMC) is as follows:-
Inter-Ministerial Empowered Committee (EC)
i. Secretary, Rural Development - Chairperson
ii. Secretary, Department of Economic Affairs / or representative not below the rank of Joint
Secretary - Member
iii. Secretary, Planning Commission / or representative not below the rank of Joint Secretary -
Member
iv. Secretary, Drinking Water Supply / or representative not below the rank of Joint Secretary –
Member
v. Secretary, Ministry of New and Renewable Energy / or representative not below the rank of
Joint Secretary – Member
vi. Secretary, Power / or representative not below the rank of Joint Secretary – Member
vii. Secretary, Ministry of Panchayati Raj / or representative not below the rank of Joint Secretary
– Member
viii. Secretary, Department of Legal Affairs, / or representative not below the rank of Joint
Secretary – Member
ix. Additional Secretary and Financial Advisor, MoRD – Member
x. Principal Secretary / Secretary, Rural Development of the concerned State Government –
Member
xi. Joint Secretary (PURA), Department of Rural Development - Member Convener
Project Screening and Monitoring Committee (PSMC)
i. Joint Secretary, Deptt. of Rural Development: – Chairperson
ii. Representative of Department of Economic Affairs – Member
iii. Representative of Planning Commission – Member
iv. Representative of Department of Drinking Water Supply – Member
v. Representative of Ministry of New and Renewable Energy – Member
vi. Representative of Ministry of Power – Member
vii. Representative of Ministry of Panchayati Raj – Member
viii. Representative of the concerned State Government – Member
ix. Director (PURA) – Member Convener
VII. Please provide contact information about the Public Information Officers, Assistant Public
Information Officers and Departmental Appellate Authority of the Public Authority.
Name
Designation &
Address of CPIO
Phone No.
E-Mail
Fax No.
Appellate Authority
Name, Designation, Address
Phone No.E-Mail
S.Rukmani
Under Secretary (PURA)
5th Floor Samrat Hotel,
New Delhi
011-24673554 Shri. B.S. Negi,
Director (Admn.,UNDP, IC)
Krishi Bhawan,
New Delhi
011- 23386231
VIII. What is the procedure followed to take a decision for various matters
The restructured PURA Scheme is being implemented on pilot basis under the framework of Public
Private Partnership (PPP). A Project Screening and Monitoring Committee (PSMC) has been
constituted under the chairpersonship of Joint Secretary (PURA) to examine and evaluate the
Expression of Interest (EoIs), proposals including Concept Plans submitted in response to Request
for Proposal (RfPs) and the Detailed Project Report (DPRs) prepared by Private Developers. PSMC
is also responsible for monitoring of progress of sanctioned projects. An Inter-Ministerial
Empowered Committee (EC) has been constituted under the chairpersonship of Secretary (RD) for
approving the project proposals. The EC shall give approval to different stages of project transaction
and take all decisions incidental to the project.
Besides, decisions are taken on file by competent authority as per delegated authority.
IX. What are the documented procedures/laid down procedures/Defined criteria/Rules to arrive at
a particular decision matters? What are different levels through which a decision process
moves?
Guidelines of the PURA Scheme
S.O - US - DS / Director - JS - Secretary
Project Screening and Monitoring Committee (PSMC) and Inter – Ministerial Empowered
Committee (EC)
X. What are the arrangements to communicate the decision to the public?
Website of this Ministry (www.rural.nic.in)
XI. Who are the offices at various levels whose opinions are sought for the process of decision
making?
State Rural Development Departments and concerned Private Developer
XII. Who is the final authority that vets the decision?
Minister for Rural Development
XIII. Please provide information separately in the following format for the important matters on
which the decision is taken by the public authority.
S.
No.
1 Subject on which the
decision is to be taken
Not applicable.
Guidelines / Directions,
if any
Process of Execution
XIV. Directory of officers and Employees
Given under chapter heading “Directory of Officers”
XV. Please provide information about the details of the budget for different activities under
different schemes in the given format
The budgetary provision of PURA Scheme is as follows:-
2010 – 12 (BE): 124.00 crore
2010 – 12 (RE): 74.00 crore
2011 – 12 (BE): 100.00 crore
XVI. The manner of Execution of Subsidy Programmes. Please provide the information as per the
following format
No subsidy is being provided under PURA Scheme.
S.No. Items
1 Name of the Programme/Scheme
2 Duration of the Programme/Scheme
3 Objective of the Programme
4 Physical and financial targets of the
programme (for the last year)
5 Eligibility of beneficiary
6 Pre – requisites for the benefit
7 Procedure to avail the benefits of the
programme
8 Criteria for deciding eligibility
9 Detail of the benefits given in the
programme (also mention the amount
of subsidy or other help given)
10 Procedure for the distribution of the
subsidy
11 Where to apply or whom to contact
in the office for applying
12 Application fee (where applicable)
13 Application format (where
applicable. If the application is made
on plain paper please mention it
along with what the applicant should
mention in the application)
14 List of attachments
(certificates/documents)
15 Format of attachements
16 Where to contact in case of process
related complaints
17 Details of available fund (At various
levels like District level, Block level
etc.)
XVII. Particulars of Recipients of concessions, permits or authorization granted by it. Please provide
the information as per the following format.
PURA scheme is to be implemented under the framework of Public Private Partnership (PPP). The
scope of the scheme is to select private partners to develop livelihood opportunities, urban amenities
and infrastructure facilities and to be responsible for maintenance of the same for a period of 10
years in selected Panchayats / cluster of Panchayats. A Concession Agreement will be signed
between the Gram Panchayat as the Grantor and the private developer as the concessionaire. It shall
include details of minimum service level standards, performance guarantees, etc. State Support
Agreement will be signed between Ministry of Rural Development, State Government and private
developer. The commitment of State Government for delivering the core facilities like roads, bulk
water and power to the PURA area shall be made as part of this agreement. At present, Ministry of
Rural Development is in the process of selecting private developer for implementing the scheme.
After completing the process, details of developers will be placed on the website.
S.
No.
Items Remarks
1 Name of the programme Provision of Urban Amenities in Rural Areas
(PURA) Scheme
2 Type
(Concession/Permits/Authorization)
Concession
3 Objective To implement PURA Scheme
4 Targets set (for the last year) No target was set for last year as the scheme was
not implemented last year.
5 Eligibility The concession agreement and State support
Agreement are yet to be executed. After
execution of these agreements, the details will be
shared.
6 Criteria for the eligibility
7 Pre – requisites
8 Procedure to avail the benefits
9 Time limit for the Concession/Permits
/ Authorization
10 Application Fee (Where applicable)
11 Application format (where applicable)
12 List of attachments
(certificates/documents)
13 Format of attachments
XVIII. Please provide the details of the Norms/Standards set by the Department for execution of
various activities / programmes.
The procedure followed in the decision making process, including channels of submission
S
No.
Type of Cases Final Level of
Disposal
Channel of submission above the
Section Level
I Policy Matters M(RD) US-Director/DS -JS-SecretaryM(RD)
II Parliament Matter
1. Starred Question M(RD) US-Director/DS -JS-SecretaryM(RD)
2. Unstarred Question MOS US-Director/DS -JS-MOS.
3. Assurance-Implementation MOS US-Director/DS -JS-MOS.
4. Material asked for by other
Division
Director US/Director/DS / Joint Secretary
5. Material to Lok Sabha/Rajya
Sabha Secretariat. For deciding
admissibility of Questions
Joint Secretary US-Director/DS -JS.
III VIP References M(RD) US-Director-JS-Secretary-M(RD)
IV Matters relating to Committee
Parliamentary Standing
Committee
Secretary US-Director-JS - Secretary.
2. Performance Budget Secretary US-Director/DS -JS-Secretary.
3. Cabinet Note Cabinet US-Director/DS -JS-SecretaryM(RD)-Cabinet
V Guidelines
1. Formulation and modification
of Guidelines on the
Schemes/Programmes relating
to PURA Scheme
M(RD) US-Director/DS -JS-SecretaryM(RD)
2. Clarification on Guidelines /
Scheme
JS US-Director/DS -JS.
VI Monitoring JS US-Director/DS -JS.
VII Holding of Review meetings Joint Secretary US-Director/DS -JS.
VIII Budget
1. Budget Allocation from
Planning Commission
Joint Secretary US-Director/DS -JS.
2. Reply to Audit Objections JS US-Director/DS -JS.
3. Allocation of funds to States JS US-Director/DS -JS.
IX Release of fund
Release of fund As per provisions
contained in the
Scheme
guidelines.
US – Director/DS – JS in
consultation with Finance Division
X NFRD/PPP JS US-Director/DS-JS
XIX. Please provide the details of the information related to the various schemes which are available
in the electronic format
Under PURA Scheme, guidelines and other related documents are available on website of the
ministry (www.rural.nic.in) in electronic form.
XX. Means, methods or facilitation available to the public which are adopted by the department
for dissemination of information.
Awareness generation through intensive IEC activities using electronic media, print, press
advertisements, workshops, outdoor through DAVP and interpersonal communication through DFP
and S&DD have been taken up.
XXI. Frequently Asked Questions (FAQs)
Question 1 What is PURA?
Answer Provision of Urban Amenities in Rural Areas (PURA) is a Central Sector scheme re-launched
by Ministry of Rural Development (MoRD), Government of India during remaining period of
the XI Plan with support from Department of Economic Affairs and the technical assistance
of Asian Development Bank. MoRD intends to implement the PURA scheme under a Public
Private Partnership (PPP) framework between Gram Panchayat(s) and private sector
partners. The scheme envisages twinning of rural infrastructure development with
economic re-generation activities and is the first attempt at delivering a basket of
infrastructure and amenities through PPP in the rural areas. It is an effort to provide a
different framework for the implementation of rural infrastructure development schemes
and harness private sector efficiencies in the management of assets and delivery of
services. This would perhaps be the first such attempt at PPP in integrated rural
infrastructure development and management in the world.
Question 2 What is the objective of PURA scheme?
Answer The primary objectives of the scheme are the provision of livelihood opportunities and
urban amenities in rural areas to bridge the rural – urban divide.
Question 3 What is the mission of PURA scheme?
Answer Holistic and accelerated development of compact areas around a potential growth centre
in a Gram Panchayat (or a group of Gram Panchayats) through Public Private Partnership
(PPP) framework for providing livelihood opportunities and urban amenities to improve
the quality of life in rural areas.
Question 4 What are the features of PURA scheme?
Answer The objectives of PURA are proposed to be achieved under the framework of Public Private
Partnership between Gram Panchayats and private sector partner with active State
Government support. Core funding shall be sourced from the Central Sector scheme of
PURA and complemented by additional support through convergence of different Central
Government schemes. The private sector shall also bring on board its share of investment
besides operational expertise. The scheme would be implemented and managed by the
private sector on considerations of economic viability but designed in a manner whereby it
is fully aligned with the overall objective of rural development.
Question 5 What are the urban amenities proposed under PURA scheme?
Answer An illustrative list of amenities and economic activities proposed to be provided under
PURA are as follows:-
Question 6 Need for restructured PURA scheme despite a number of other ongoing schemes –
Answer It is believed that a scheme like PURA wherein all related schemes for rural infrastructure
are being converged for a synchronized delivery for a period of 10 years in project mode
shall maximize socio-economic impact. Besides, minimum development obligations by the
private developer will enable improved quality of service delivery in the Panchayat area.
Question 7 How have the Gram Panchayat(s) been chosen for PURA?
Answer In the pilot phase, the private developer is given flexibility to identify and select the Gram
Panchayat for undertaking PURA projects based on their familiarity with the area or past
experience of working at the grassroots level. However, as the consent of the concerned
Panchayats and no objection from the state governments are mandatory, the selection
would reflect the concurrence of all the stakeholders.
Amenities to be provided
under MoRD Schemes
Amenities to be
provided under NonMoRD
Schemes
Add-on Projects (Revenue
earning, people centric
projects)
1. Water and Sewerage
2. Construction and
maintenance of Village
Streets
3. Drainage
4. Solid Waste Management
5. Skill Development
6. Development of Economic
Activities
7. Village Street Lighting
8. Telecom
9. Electricity, etc.
10. Village linked tourism
11. Integrated Rural Hub, Rural
Market.
12. Agri – Common Services
Centre, Warehousing, etc.
13. Any other rural-economy
based project
Question 8 How have the Private Developers been chosen for implementation of PURA scheme?
Answer The selection has been done through an open competitive technical bidding process with
rigorous qualification and evaluation criteria. As these are pilot projects, therefore, there
has been no financial bidding. In the pilot projects the bidders have been evaluated on
their technical capability and assigned scores as per pre-approved evaluation methodology.
Question 9 What is the funding source for PURA scheme?
Answer Funding for projects under PURA scheme may come from four sources: MoRD schemes,
non-MoRD schemes, private financing and Capital Grant under PURA.
Question 10 How shall the cost of a PURA project and the capital grant be determined?
Answer Each individual PURA project cost and the eligible capital grant (subject to a maximum of
35% of project cost) shall be determined on the basis of a Concept Plan and Detailed
Project Report that would be appraised and approved by an inter-Ministerial Empowered
Committee for the purpose.
Question 11 Is PURA viable for a private developer?
Answer It is expected that the additional revenue generating activities and the capital grant
support shall successfully enable a viable PPP in the scheme. Mapping of different risks
along with mitigation measures has been attempted. Along with emphasis upon rural
development priorities, there shall be an effort to dovetail developers’ perspective on an
economically viable project. The way project design has been done, the private developer
should make requisite profit during the project life cycle of 10 years.
Question 12 Is this model of PURA upscalable?
Answer Through the implementation of proposed pilot projects, the unique features of this scheme
could be tested on the ground and provide lessons for upscaling in future. Besides, the
entire process shall help strengthen the institutional ability of a Gram Panchayat to
undertake PPP and help pilot-test the viability of PPPs in rural infrastructure development.
However, as far as funding and management of PURA projects across all the 2,50,000
Panchayats in the country is concerned, it is upscalable and financially affordable for the
Government over a period of 5-10 years horizon.
XXII. Related to seeking information with relation to training imparted to public.
S.
No.
Items Remarks
1 Name of training programme with brief description Not Applicable
2 Time period for training programme/Scheme
3 Objective of training
4 Physical and Financial targets (Last year)
5 Eligibility for training
6 Pre – requisite for training (if any)
7 Description of help (Mention the amount of Financial
help, if any)
8 Procedure of giving help
9 Contact information for applying
10 Application fee (where applicable)
11 Other fees (where applicable)
12 Application form (Incase the application is made on
plain paper please mention the details which the
applicant has to provide)
13 List of enclosures / documents
14 Format of enclosures / documents
15 Procedure of application
16 Process followed in the Public Authority after the
receipt of application
17 Normal time taken for issuance of certificate
18 Validity period of certificate (If applicable)
19 Process of renewal (if any)
20 Selection procedure
21 Time table of training programme (in case available)
22 Process to inform the trainee about the training
procedure
23 Arrangement made by the public authority for
creating public awareness about the training
programme
24 List of beneficiary of the training programme at
various levels like district level, block level etc.

Agricultural Extension in India: A Note

Public-Sector Agricultural Extension in India: A Note
Sajesh, V. K.* and Suresh, A.
*Scientist, National Institute for Agricultural Economics and Policy Research, sajeshvk@gmail.com
Senior Scientist, Division of Agricultural Economics, Indian Agricultural Research Institute
The importance of agricultural extension in transferring relevant knowledge and information to farmers as well as in translating policy directions into action is well known. India has a long tradition of agricultural extension. Agricultural extension in the post-Independence era was largely the function of State Departments of Agriculture. Some voluntary organisations were also involved in agricultural development activities in different parts of the country, but with limited outreach. The Indian Council of Agricultural Research (ICAR) began its participation in agricultural extension through National Demonstrations in 1964.
A major change in public sector extension came with the implementation of the World Bank sponsored Training and Visit System (T&V) in 1974. Most States adopted the T&V system during the 1980s, and this improved the financial and human resource capacity of the extension system. The 1970s also witnessed the launch of Krishi Vigyan Kendras (KVKs) or Farm Science Centres, Lab-to-Land programmes, and Operational Research Programmes by the ICAR. Krishi Vigyan Kendras (KVKs) were begun by ICAR to provide need-based and skill-oriented vocational training to farmers, field-level extension workers and other self-employed persons. KVKs were meant to bridge the gap between technology developed at research institutions and its adoption at the field level. Their role was to feed proven technologies to the main extension system. The KVK programme began in 1974. There are now a total of 642 KVKs in the country – 429 under State Agricultural Universities (SAUs) and Central Agricultural Universities (CAU), 56 under ICAR institutes, 100 under Non-Government Organisations (NGOs), 35 under State Governments, three under various Public Sector Undertakings (PSUs), and the remaining 18 under other educational institutions. KVKs work under the administrative control of Zonal Project Directorates (ZPDs). There are 8 ZPDs in the country. In 1992, National Demonstrations, Operational Research Projects, and the Lab-to-Land Programme were merged with KVKs, and front-line demonstrations and on-farm testing were added to the responsibilities of KVKs. From 2009 onwards, KVKs have also assumed the role of Knowledge and Resource centres in the concerned districts. Each KVK has scientific manpower of six to seven subject-matter specialists.
Low manpower resources restrict the reach of KVKs to a limited number of farmers. Many KVKs are constrained by financial, infrastructural, and human resource limitations and unable to reach the farming community of a district.
Agricultural extension witnessed a qualitative change in the 1990s, with a new focus on privatisation and the withdrawal of support to the state-led extension system. Reduced spending by government weakened the public sector extension system. Other non-governmental agencies stepped in to fill the vacuum.
Facing criticisms on the failure of extension, the government introduced the Agricultural Technology Management Agency (ATMA). The ATMA model was pilot-tested from 1998 to 2005 in 28 districts, and later extended to all 548 rural districts in the country. The ATMA model was meant to make the extension system a demand-driven, market-oriented, and farmer-accountable system. At the district level, ATMA was to function as a registered society of all major stakeholders in agriculture and allied activities, with the objective of becoming a platform for the convergence of the various agencies involved in extension in a district. ATMA was to be the nodal point at the district level for technology dissemination, integrating research and extension activities, and decentralising day-to-day management of the public agricultural extension system. Field-level activities are coordinated through Farm Information and Advisory Centres (FIAC) at the block level. Another feature of ATMA is that it deals with groups such as farmer groups or self-help groups rather than with individuals for the delivery of extension services. It also has provisions for public-private partnership in the district. In 2000, ICAR introduced Agricultural Technology Information Centres (ATIC) in selected ICAR institutes and State Agricultural Universities to function as a single window to disseminate technologies developed in the Universities and Institutes.
Many new service providers and institutional arrangements in agricultural extension have emerged over the last two decades. These include private extension agencies, input agencies, agri-business firms, farmers’ organisations, producer cooperatives, financial agencies involved in rural credit delivery, and consultancy services (Sulaiman 2012). The establishment of Agri-Clinics and Agri-Business Centres (AC & ABC) Scheme was an explicit move by government to support private sector initiatives in extension. Under the AC and ABC scheme, unemployed farm graduates were provided training for two months each and given access to credit to start their own ventures. Close to 45904 farm graduates were trained between 2002 and 2016 and more than 19402 ventures begun (AC & ABC 2016). The impact of this initiative is yet to be evaluated.
While the Indian extension system is now guided by a variety of models, schemes, and institutions, public sector extension continues to dominate. Though ICAR’s extension initiatives have been important to transformations in Indian agriculture, their capacity and reach has always been limited compared to those of first-line extension systems run by State-level departments of agriculture. Further, since agriculture is a State subject, the mode of organisation and operation of public extension systems vary widely across States.
This note deals with some critical gaps and emerging challenges for agricultural extension in India. The note is based on secondary information collected from various sources including the Planning Commission, the Department of Agriculture and Co-operation, Ministry of Agriculture, Government of India, the Central Groundwater Board, and the National Sample Survey Office (NSSO).
Yield Gap and Access to Information
Among the various functions of extension, the dissemination of information is the most important. Knowledge gaps in turn lead to yield gaps (Morris et al. 1998 and Singh et al. 2001). Substantial gaps between yields in research stations and actual yields in farmers’ fields exist in all principal crops (Table 1). In the case of wheat, for instance, the yield gap was 6 per cent in Punjab and 84 per cent in Madhya Pradesh. In a study of yield gaps in rainfed conditions, Agarwal et al. (2008) found substantial yield gaps across all States and in all crops, thus implying large scope for enhancing rainfed crop productivity. On an average, the gap estimated relative to simulated potential yield in rained conditions was 2560 kg per hectare for rice, 1120 kg per hectare for cotton, and 860 kg per hectare for mustard.
Table 1 Yield gaps for selected crops, States of India, 2007 in per cent
CropYield Gap (range)
Wheat6 (Punjab) to 84 (Madhya Pradesh)
RiceOver 100 in Assam, Bihar, Chhattisgarh and Uttar Pradesh
Maize7 (Gujarat) to 300 (Assam)
Sorghum13 (Madhya Pradesh) to 200 (Karnataka)
Mustard5 (Haryana) to 150 (Chhattisgarh)
Soybean7 (Rajasthan) to 185 (Karnataka)
Sugarcane16 (Andhra Pradesh) to 167 (Madhya Pradesh)
The Situation Assessment Survey of Farmers 2003 reported that, given a choice, 40 per cent of farmers were willing to leave agriculture. The survey also showed that the coverage of Government extension programmes and extension services of the National Agricultural Research System (NARS) was very low (NSSO 2005). Only 40 per cent of farmers had access to any source of information on modern technology. Of those who had access to such information, the highest proportion obtained information from other progressive farmers (16.7 per cent), followed by input dealers (13.1 per cent), and radio broadcasts (13 per cent). Only 5.7 per cent of farmers had received information from extension agents. Further, the major problem reported by those who had access to extension services was the practical relevance of the advice. The Situation Assessment Survey 2013, though not strictly comparable, again highlighted the prominence of farmer-to-farmer exchange of information in Indian agriculture. Traditional and modern ICTs (newspapers, radio, television, and internet) have also assumed an important role as a source of information for farmers. At the all-India level, 41 percent of cultivating households accessed technical help from any source during the reference period (July-December 2012). Public extension agencies, including extension workers, KVKs, and State Agricultural Universities, were a source of information for around 10 percent of households (NSSO 2014).
A study in Maharashtra by Bachhav (2012) concluded that the majority of farmers seek information on availability of seeds (74 per cent), crop production (71 per cent), fertilizer (65 per cent) and insecticide availability (62 per cent). Other areas mentioned by farmers were water management (34 per cent), weather information (23 per cent), and agricultural equipment (18 per cent). Similar findings were observed by Meitei and Devi (2009), who concluded from a study in Manipur State that most farmers seek information on crop production and availability of seeds and fertilizers. Babu et al. (2012) observed that the most important information needs for rice farmers in Tamil Nadu related to disease and pest management, and pesticide and fertilizer application. The most important information need of tribal farmers, as identified by Saravanan (2007), concerned disease and pest management, followed by information related to suitable crop varieties, packages of practices, farmers’ training programmes, irrigation, and farm credit.
A recent study by Reardon et al. (2011) in Uttar Pradesh showed that public sector extension sources (State extension staff, KVKs, All-India Radio, university extension, and plant protection units) were collectively a source of information for only 25 per cent of farmers. In Madhya Pradesh, 37 per cent of the farmers had contacted State extension staff (Reardon et al. 2011) for services. Other major sources of extension services for farmers in Madhya Pradesh were All-India Radio and television (21 per cent), and KVKs (12 per cent). Private sector sources accounted for 25 per cent of all information sources.
Glendenning et al. (2010) concluded from a review of agricultural extension in India that despite the variety of agricultural extension approaches that operate in parallel and sometimes duplicate one another (see Figure 1), the majority of farmers in India do not have access to any source of information; this lack of access severely limited their ability to increase productivity and income and reduce vulnerability.
 
Figure 1 Information flow from agricultural extension agencies in India
Notes: Information flow is the line between the boxes; strength and feedback in each line are not described here.
ATMA=Agricultural Technology Management Agency, DoA=Department of Agriculture, ICAR=Indian Council for Agricultural Research, FFS=farmer field school, FBO/SHG=farmer-based organisation/self-help group, SAU=State Agricultural University, KVK=Krishi Vigyan Kendra (farm science centre), NGO=non-governmental organisation.
Public-private partnerships, hailed as a major means of harnessing the strengths of both public and private actors, are still at a nascent stage in agricultural extension. Madhya Pradesh is the only State in India where public-private partnership in agriculture was initiated in the form of collaboration between the State department of agriculture and the Dhanuka group of companies, a group with a strong base in agrochemicals. Partnership was envisaged in areas such as soil testing, training, transfer of technology through cyber-cafes, establishment of markets, and provision of credit facilities. An impact assessment of the programme showed that there was an increase in the productivity of four major crops, namely rice, wheat, pigeon pea (arhar), and chickpea (gram), which in turn was reflected in higher incomes for farmers (Chandra Shekhara et al. 2010). The sustainability of such partnerships, however, has not been established.
Inclusiveness and Extension
Another concern facing Indian agriculture is the proliferation of smallholders who operate two hectares or less. Smallholders now cultivate 44 per cent of operated land and small holdings constitute 85 per cent of all operational holdings. Owing to the increase in population and consequent fragmentation of land, the average size of land holding has decreased over time. The average size of holdings for all operational classes declined from 2.82 hectares in 1970-1 to 1.16 hectares in 2010-1 (DAC 2013). The share of smallholders in total production has increased in the case of food grain, oilseeds, sugarcane, fruit and vegetables. The cost of cultivation per hectare is higher on small and marginal farms than medium and large farms (Dev 2012). Small farms are often unable to generate adequate incomes and hence smallholders are vulnerable to various risks. Globalisation and trade liberalisation add to the worries of small farmers, who are compelled to compete on quality and prices in the export and domestic markets, and often find it difficult, owing to limited financial resources, to cope with the specifications of a new market regime.
Data from the Situation Assessment Surveys of the NSSO bring out variations in access to information across farmers of different land size categories.1 In 2003, the proportion of farmers that gained access to information from any source was 54, 51 and 38 per cent in the case of large, medium and small farmers respectively. The proportion of farmers with access to information was found to increase with an increase in the size of holding. Smallholder farmers were found to rely mainly on local sources of information, such as progressive farmers (16 per cent) and input dealers (12.6 per cent), along with the radio (12.4 per cent). In case of medium-size and large farmers, the major sources of information in addition to those above were television (15.3 and 22.4 per cent), newspapers (10.3 and 15.9 per cent) and extension agents (9.8 and 12.4 per cent). To put it differently, only 4.8 per cent of smallholders viewed the extension worker as a primary source of information, as compared to 9.8 per cent of medium farmers and 12.4 per cent of large farmers (Adhiguru et al. 2009).
These observations have serious implications for organising the extension system in India, where 83 percent of farmers meet their livelihoods from small and marginal land holdings. It is well acknowledged that smallholders’ vital contribution to India’s food and agricultural economy and national food security depends on their responsiveness to public policies and to national investments in agricultural research and development and public infrastructure (Singhet al. 2002). Any decline in public investment in these critical public goods raises concerns for future agricultural growth. So the “elite bias” in access to information can seriously impede the growth of agriculture in future. Given the skewed nature of distribution of advanced electronic assets in favour of resource-rich farmers, personal contacts provided by extension workers carry greater weight in achieving extension objectives among small farmers.
Another dimension of exclusion of extension support is with regard to disadvantaged regions, crops, and sections of society. These include, among others, non-timber forest produce in tribal areas, dry land crops, and, small ruminants (sheep and goat). In remote and disadvantaged areas, farmers are rarely contacted by extension agents. Specialised and client-oriented extension approaches that focus on livelihoods rather than technology dissemination are needed for such areas (Sulaiman 2003).
The Challenge of Achieving Convergence
The scope of extension is increasingly becoming wider, covering all aspects of farming, from seeds to market. Farmers need information not only on best practices and technologies for crop production, but also information about post-harvest tasks including processing, marketing, storage, and handling (Van den Ban 1998Sulaiman and Holt 2002). Given the diversity of Indian agriculture, attempting a single blueprint for an extension strategy for smallholders is futile. What is ideal in a particular context depends entirely on the initial conditions in that particular context. A “best fit” approach, as proposed by Birner et al. (2006), will be more relevant and that requires mobilisation of farmers and networking with different stakeholders in the agricultural innovation system, such as research institutions, input dealers, processors, buyers, and financial agencies.
The establishment of the Agricultural Technology Management Agency (ATMA) was a major step forward in the convergence of multiple actors engaged in agricultural extension. ATMA is supposed to act as an umbrella organisation for all major stakeholders in agriculture and allied activities within a district. The Strategic Research and Extension Plan (SREP) is an important feature of ATMA. It is to be formulated by identifying local research and extension priorities in consultation with farmers. At the ground level, farmers’ groups act as platforms for the convergence of various advisory and service providers. ATMA also tried to utilise the potential of agri-entrepreneurs, custom hire service providers, input dealers, and extension workers in non-governmental organisations to supplement the efforts of public extension functionaries (DAC 2014). The Modified Extension Reforms Scheme introduced in 2010 was intended to synergise interventions under various schemes under the umbrella of ATMA. The initiation of a National Mission on Agricultural Extension and Technology (NMAET) in 2014, with four sub-Missions on agricultural extension, seed and planting material, agricultural mechanisation, and plant protection and plant quarantine, is envisaged as a further step in this direction. The aim of the Mission is to restructure and strengthen agricultural extension to enable the delivery of appropriate technology and improved agronomic practices to farmers by a combination of extensive physical outreach and interactive methods of information dissemination (DAC 2014).
Other than ATMA, there are some smaller interventions to promote convergence. Notable examples include “Convergence of Agricultural Interventions in Maharashtra’s Distress Prone District Scheme” (Vidarbha region) and “Rural Bio-Resource Complex Project” in Bangalore Rural district implemented by the University of Agricultural Sciences, Bangalore, since April 2005. The latter project was implemented in Doddaballapura taluk of Bangalore Rural District, and claimed to cover 8340 families spread over 75 villages in five panchayats in a contiguous area. Major features of the project included the identification of the most profitable, sustainable and location-specific technologies, timely and dependable information within easy reach of rural people, providing critical inputs free of cost, effective functional linkage, marketing empowerment, and commodity-based associations (Gowda 2009). The sustainability of such initiatives, especially after the withdrawal of the implementing agency, requires that appropriate institutions be created at the ground level.
Natural Resource Orientation in Agricultural Extension
The depletion and degradation of natural resources is an important challenge confronting the long-term sustainability of Indian agriculture. Non-judicious use of inputs – fertilizer and water, in particular – is emerging as a major concern in the wake of the degradation of natural resources and consequent reduction in resource productivity. Indiscriminate use of chemical fertilizers is a major cause of soil degradation and groundwater pollution.
One problem is that the recommended N: P: K ratio (4:2:1) is not followed and there is an imbalanced use of fertilizers, especially of nitrogenous fertilizers.2 Price policy with respect to fertilizers has a large role to play here, as use is related to the decontrol of prices of certain fertilizers. Nevertheless, the need for providing awareness on nutrient applications based on soil fertility analysis cannot be underemphasised. Table 2 shows that although the imbalance in fertilizer use decreased between 1996-7 and 2006-7, it is still large.
Secondly, there is large non-uniformity in fertilizer consumption across States (DAC 2013). Per hectare consumption was as high as 244 kg in Punjab and 266 kg in Andhra Pradesh, and as low as 5 kg in some of the North Eastern States. Madhya Pradesh (88 kg per hectare), Odisha (57 kg per hectare), Rajasthan (62 kg per hectare) and Himachal Pradesh (55 kg per hectare) were characterised by medium levels of fertilizer use. These imbalances too need to be rectified with immediate effect to ensure efficient nutrient application, which in turn can lead to an increase in production and a decrease in costs of production. Extension, ideally, should have a programme on soil health.
Table 2 Trends in fertilizer application and nutrient imbalance, by farmer category, 1996-7 and 2006-7 in kilograms per hectare
Farmer categoryNutrients (kg per hectare)Nutrient ratios
NPKN:KP:K
2006-7
Marginal86.236.417.15.12.1
Small76.635.915.84.82.3
Semi-medium67.830.010.56.42.9
Medium61.626.67.08.83.8
Large45.319.03.413.45.6
Overall70.330.911.66.02.6
1996-7
Marginal64.827.711.35.72.4
Small49.923.88.95.62.7
Semi-medium46.822.26.47.43.5
Medium44.020.33.911.35.2
Large34.115.41.621.59.7
Overall48.422.26.57.43.4
Source: Computed by the authors using Input Survey (1996-7 and 2006-7), Department of Agriculture and Co-operation, Government of India.
In the case of irrigation, over-exploitation of groundwater and consequent decline in groundwater table is well documented. Table 3 reveals the critical situation in terms of shrinking water resources in the country. Out of 5842 assessed administrative units (Blocks/taluks/mandals/districts), groundwater was overexploited in 802 units, critical in 169 units, and semi-critical in 523 units (DAC 2013). Some of the critical areas were in Rajasthan, Haryana, Punjab, western Uttar Pradesh, western Andhra Pradesh, and North Western Tamil Nadu. Unsustained groundwater exploitation will be a serious threat even to the availability of drinking water in the near future.
Presently, the agricultural sector is using about 83 per cent of available water resources (DAC 2013).There is an immediate need to adopt groundwater-replenishing activities and less water-intensive farming methods like sustainable crop intensification and conservation agriculture. The adoption of such practices is a function of many factors, but agricultural extension has a role to play. There is a need to initiate specialised water-focused extension approaches, particularly in water-scarce regions. Such an approach would need to cover critical areas of soil and water conservation, rainwater harvesting, increased water use efficiency, and the conjunctive use of ground and surface water. Currently, water use efficiency is largely undertaken as a private initiative to promote drip and sprinkler irrigation. Water conservation efforts like rainwater harvesting are being run as routine schemes of the government. In canal-irrigated regions, the task is to increase water-use efficiency and share water resources. These interventions require joint efforts by various departments of the Government that have a stake in rural development, including departments of agriculture, rural development, irrigation, power, water, and forestry in different States.
Table 3 Status of categorisation of talukas/blocks/mandals with respect to groundwater extraction, selected States, 2009 in per cent of total blocks assessed
StateSemi-criticalCriticalOver-exploitedAll
Andhra Pradesh8.42.37.618.3
Gujarat9.02.712.123.8
Haryana7.818.158.684.5
Karnataka12.64.126.343.0
Madhya Pradesh19.51.37.728.5
Maharashtra5.40.32.58.2
Punjab1.42.279.783.3
Rajasthan6.710.569.586.7
Tamil Nadu17.48.536.061.9
Uttar Pradesh13.03.99.326.2
Note: Talukas/blocks/mandals are administrative units at sub-district level.
Source: Computed by the authors from data from the Central Groundwater Board (2011).
Human and Financial Resources in India’s Extension
The departments of agriculture of State governments are still the main agricultural extension agencies in India in terms of number of personnel and geographical coverage. India has a total of 0.12 million agricultural extension workers to serve a net cropped area of 141 million hectares and 158 million operational holdings. Table 4 provides information on the extent of net cropped area and operational holdings covered per extension worker in selected States of India. There is large variation in the intensity of personnel per acre and holding across States. In 2012, the number of operational holdings covered by an extension person varied from 249 in Jammu & Kashmir to 3162 in Andhra Pradesh. Similarly, an extension person was required to cover a net cropped area of as much as 3194 hectares in Rajasthan and 2982 hectares in Punjab.
The number of extension personnel in India is, however, only one-sixth of that in China. With this meagre number of extension personnel, serving widely dispersed farmers with diversified information needs is a really hard task. Moreover, most of the extension personnel are overburdened with multiple roles. Though farmers need information on the entire food and agriculture value chain, starting from forecasts of weather conditions to market prices of the produce, the public extension system largely concentrates on on-farm activities (Glendenninget al. 2010).
Table 4 Extension intensity or the number of extension personnel per operational holding and net cropped area, selected States in number and hectares
StatesNumber of extension personnelNumber of operational holdings/extension personnelNet cropped area/ extension personnel (in hectares)
Andhra Pradesh416731622608
Assam2779979991
Bihar102311583553
Chhattisgarh43138691092
Gujarat350113532799
Himachal Pradesh1084886499
Haryana30195361184
Jammu and Kashmir5812249127
Jharkhand4129656364
Karnataka322624283154
Kerala39331737531
Madhya Pradesh107758231387
Maharashtra157708691105
Orissa379412301477
Punjab13987532982
Rajasthan549512543194
Tamil Nadu8320976606
Uttar Pradesh1297617671265
Uttarakhand1031885731
West Bengal61641156859
All India11904811561187
Notes: The data on number of operational holdings, net cropped area, and numbers of extension personnel correspond to the years 2006, 2008, and 2012 respectively.
Source: Computed by the authors using information on human resources from the Desk Survey of the Department of Agriculture and Co-operation and the Agricultural Census, 2007.
To overcome the paucity of human resources, the Department of Agriculture and Cooperation (DAC) of the Government of India opened Kisan Call Centres in January 2004.The intention was to use the potential of information and communication technology to respond to farmers’ queries and concerns in local languages. A farmer could contact the call centre in his/her State (open from 6 am to 10 pm) by dialing a toll free number and seek answers to his/her problems. Agricultural graduates posted at the call centre were to provide the answers, and if unable to address the problem, would forward the query to experts at the next level. There are currently 25 call centres located in different parts of the country covering all the States and Union Territories. Sharma et al. (2011) have observed that KCCs are effective in hill agriculture where extension outreach is difficult.
Trends in expenditure (Centre plus State governments) on extension by subsector of agriculture (crop, livestock, and fisheries) from 1972-3 to 2010-1 are shown in Figure 2. The graph shows that the steady rise in expenditure on extension was reversed in the early 1990s, and began recovering only after 2004-5.
Between 1995-6 and 2004-5, real extension expenditure declined in the case of crops and soil and water conservation activities, resulting in a decline in total expenditure. The livestock and fisheries sectors witnessed a higher rate of growth, but that could be attributed to lower base values (Table 5). However, there was a spurt in growth of extension expenditure from 2005-6 to 2010-1 on account of initiatives such as taking Agricultural Technology Management Agencies (ATMA) to all districts.
 
Figure 2 Trend in extension expenditure in India, 1972-3 to 2010-1, real price (in constant 2004-5 prices)
Note: Extension expenditure here denotes plan funds only.
Source: Computed by the authors based on data from Chand, Kumar, and Kumar (2011b) (1972-3 to 2004-5) and CAG of India (2005-6 to 2010-1).
Table 5 Level and growth of extension expenditure in India, by sector, 1972-3 to 2010-1 in million rupees (at 2004-5 prices) and percentage per year
PeriodCropLivestockFisheriesTotal
Expenditure (Rs)
1972-32412.99126.44117.732657.16
1994-54747.66350.37161.185259.21
2004-54883.76362.55279.715526.02
2010-111701.23813.98307.2012822.41
Growth rate (percentage per year)
1972-3 to 1994-51.061.071.041.06
1995-6 to 2004-5-0.844.733.28-0.41
2005-6 to 2010-116.189.986.3515.41
Source: Computed by the authors from data in Chand et al. 2011b and CAG of India (2005-6 to 2010-1).
The livestock sector needs to be accorded high priority as it raises farm incomes and the nutritional security of poor households (Kumar and Mittal 2000). Major challenges facing India’s livestock sector include an inadequate number of veterinary hospitals, dispensaries, and technical manpower. Extension for livestock has focused on bovines to increase milk production, while neglecting other commodities such as meat, and other animals, such as small ruminants. India is the second largest producer of fish in the world. Fisheries provide livelihood opportunities to millions of people directly and through a number of subsidiary industries. Here too, one of the major constraints is inadequate extension staff for training of fishers and fisheries personnel (DAC 2013). It is also to be noted that the extension needs of inland and marine fisheries are quite different in terms of approaches and scale.
The Way Forward: Policy Implications
Indian agriculture is confronting serious issues such as a huge yield gap, a multitude of smallholders, imbalances with respect to input use and declining natural-resource productivity. Extension systems in India, which have an important role to play in addressing these concerns, are constrained by financial, infrastructural, and human resource limitations. An analysis of extension expenditure showed a serious setback in the 1990s. There is an immediate need to increase investment in extension.
The inclusiveness of extension services remains a major concern. Considering the prevalence of smallholders in Indian agriculture and the complexity of the problems confronting them, suitable extension strategies need to be formulated. The growth of smallholder agriculture will be determined by the extent to which institutions of research and extension are attuned to their priorities.
The focus of agricultural extension has been on increasing yield with much less attention paid to ecosystem health and natural resource conservation. Given the public-good nature of many of the benefits of natural-resource management activities, the role of government is critical.
Lastly, while there are a variety of institutions in the field of extension, the ability of private extension to reach disadvantaged and marginalised areas, enterprises and sections of society is not yet established. While private and non-governmental institutions should be encouraged, public extension has to be strengthened to cater to the scale and diversity of agriculture in India