Devyanshi K.

The rural banking system has expanded since independence due to the efforts of the government to expand bank branches and correspondents across rural India since credit availability is a major impediment to development of rural society. critical analysis of its impact:

successes- 

1. expanding credit coverage. Jan dhan accounts have expanded coverage significantly. 
2. better access to farm inputs such as implements, fertilisers, seeds, etc. 

3. green revolution was heavily dependent on credit access since it requires intensive use of both water and fertilisers. 
4. expanding non farm output through credit provisioning through regional rural banks, cooperative banks, etc. 

failures: 

1. unequal distribution of credit. Credit is concentrated in the green revolution states and maharashtra, and deprived in the northeast. 
2. high rates of default and risk due to agriculture failures resulting from monsoon vagaries. 
3. non institutional credit is still very high (35% of total rural credit) 

4. failing agriculture due to structural issues, lack of irrigation, and falling gdp. Credit alone can't be enough.

in conclusion, credit access is a prerequisite for development but has to supplemented through public investments so that agriculture yields adequate returns on invested credit, else development gains won't accrue.