NABARD has projected a priority sector credit potential of ₹4.47 lakh crore for Karnataka in 2025-26, which is 12.55 per cent higher than the projections made for 2024-25.
To support this, NABARD annually prepares a Potential Linked Credit Plan (PLP) for each district through a consultative process to facilitate credit planning and allocation for priority sector activities. The PLPs assess the potential for priority sector lending by considering available resources, economic activity trends, credit deployment patterns, infrastructure needs, and market opportunities.
These sector-specific projections, derived from district plans, are aggregated at the state level in the form of the State Focus Paper (SFP). In addition to credit potential, the SFP identifies critical infrastructure gaps, necessary linkages, and key policy issues that require interventions from various stakeholders to ensure the holistic development of Karnataka’s agricultural and rural economy.
Emphasising the role of the banking sector in providing financial access to farmers, MSMEs, and rural entrepreneurs, Uma Mahadevan, IAS, ACS & DC, highlighted Karnataka’s balanced approach to agricultural and industrial development. “Public investment in infrastructure is a major catalyst for enhancing credit absorption capacity. Karnataka is well-equipped to utilise the estimated credit potential, with strong rural infrastructure in place, including rural connectivity, irrigation systems, marketing and storage facilities, healthcare, sanitation, and drinking water supply,” she remarked.
KVSSLV Prasada Rao, Chief General Manager (CGM), NABARD, Karnataka Regional Office, noted that of the projected ₹4.47 lakh crore credit potential for 2025-26, ₹2.04 lakh crore (46%) is allocated for agriculture, ₹1.88 lakh crore (42%) for MSMEs, and ₹0.56 lakh crore (12%) for other priority sector activities.
He also noted that this year, 298 rural infrastructure projects with RIDF assistance of ₹2,056 crore have been sanctioned for Karnataka.
Additionally, he highlighted challenges in the agricultural sector due to diminishing natural resources and stressed the need for sustainable practices, such as micro-irrigation systems, farm ponds, and a shift towards less water-intensive crops.