Marginal Rise in Priority Sector Lending Raises Questions on Credit Quality, Agricultural Focus in Tripura
By Our Correspondent
Agartala, April 28, 2026
While the rise in Priority Sector (PS) advances in Tripura has been projected as a positive signal for financial inclusion and regulatory compliance, economists and sector observers have pointed out that the increase remains modest and raises deeper concerns over the quality, direction and developmental impact of institutional credit in the state.
According to the 154th Quarterly Report of the State Level Bankers’ Committee (SLBC), Priority Sector advances increased to Rs. 13,651.53 crore in 2025 from Rs. 11,963.71 crore, registering an increment of Rs. 1,687.82 crore. Though the growth reflects movement in lending and improved outreach, experts argue that the increase is relatively limited when viewed against the state’s rising developmental needs and inflationary pressures.
Economics researcher Kiran Bhowmik, a PhD Scholar in the Department of Economics at Tripura University, described the increase as an indication of stronger compliance with the updated Reserve Bank of India Priority Sector Lending norms, but cautioned that compliance alone cannot substitute for transformational credit delivery.
He observed that while public sector advances to Adjusted Net Bank Credit (ANBC) rose from 60 percent in 2024 to 62 percent in 2025, the growth does not necessarily indicate robust sectoral deepening unless supported by improved productivity outcomes and timely repayments.
A more critical concern, according to the analysis, lies in agriculture. Agricultural advances increased to Rs. 4,793.74 crore from Rs. 4,663.42 crore, but agriculture’s share in ANBC slipped from 23 percent to 22 percent, indicating a relative decline in the sector’s credit priority.
“This contradiction needs serious policy attention,” Bhowmik argued, adding that while absolute agricultural lending has risen, the reduced proportional share may weaken long-term support for a sector that remains central to Tripura’s economy. The report also points to a deeper structural issue repayment stress and rising risks of agricultural loans turning into non-performing assets. Delayed repayments, crop uncertainties, weak loan monitoring and inadequate restructuring mechanisms continue to affect credit efficiency.
Critically, experts have questioned whether banking institutions are focusing more on meeting regulatory lending targets than on ensuring productive and sustainable deployment of rural credit.
Constructive criticism has emerged that banks in the state need to move beyond routine credit expansion and adopt reforms such as improved loan structuring aligned with crop cycles, timely insurance claim settlement, stronger credit appraisal, monitoring of end-use of loans, and promotion of diversified farming and allied activities. Financial literacy among borrowers and responsible lending practices were also flagged as urgent priorities.
Observers note that while the banking sector in Tripura deserves recognition for expanding priority sector lending, the modest increase and declining agricultural share suggest the need for a more development-oriented credit strategy. As Tripura seeks inclusive growth, experts believe the real challenge is not merely increasing advances, but ensuring that credit translates into productivity, repayment discipline and sustainable rural transformation.
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