Agricultural credit system is a difficult task to handle. The purpose of this system is to improve the general health of Indian agriculture. Measures like rescheduling of loans, waiving of loans due to crop loss, cyclical credit as well as launching of credit counseling centers, crop insurance, price risk mitigation systems, etc., are aimed to improve the general health of indian agriculture. The government must take decisive action to counter the challenge of inflation and rise of oil prices to safeguard Indian agriculture.

Agriculture is one of the predominant pillars of the Indian economy. Since independence, efforts were made to develop and strengthen this sector followed by many ups and downs in the past. In this regard, Radhakrishna Expert Committee reviewed the system of agricultural credit in India and submitted its report in July 2007. The recommendations that are concerned with bank and its operations, the Reserve Bank of India (RBI) formed an Internal Working Group (IWG) headed by V S Das to judge and modify the recommendations pertaining to banking system. Following the recommendations and consequent suggestions mentioned by the IWG may be discussed as follows.

From the Prime Minister's relief package, we have seen that these relief measures are directed in such a way that individual households, who are distressed, should be handled carefully, and loans may be forwarded to them after taking into account their repayment capacity. For the successful operation of this relief package, no-credit components should be addressed with significant care, and for that the Government of India must lay down transparent but flexible guidelines for choosing debt-stressed districts in future.

Professional Banker Magazine, Agricultural Credit Systems, Indian Agriculture, Crop Insurance, Risk Mitigation Systems, Internal Working Group, IWG, Deposit Insurance and Credit Guarantee Corporation, DICGC, National Agricultural Insurance Scheme, NAIS, National Bank for Agriculture and Rural Development, Nabard, Small Industries Development Bank of India, SIDBI, Agricultural Products, National Housing Bank, NHB.