The allocation of credit to the priority sector, particularly agriculture, is a critical aspect of India's financial policy aimed at fostering inclusive growth and rural development. However, ambiguity surrounding the definition and scope of agricultural lending has been a longstanding concern, leading to inconsistent implementation across financial institutions. In response to these challenges, Joshi (1972) recommended that the Reserve Bank of India (RBI) provide clear and specific definitions for the various components of the priority sector to enhance clarity and uniformity among bankers. Subsequently, the Working Group on the Modalities of Implementation of the Priority Sector Lending proposed guidelines to ensure adequate credit flow to agriculture, emphasizing that each bank allocate at least 40% of its advances to the agriculture sector. Moreover, the working group outlined specific targets for direct lending to weaker sections within agriculture, including small and marginal farmers, landless laborers, and individuals engaged in allied activities. It stipulated that at least 50% of total direct lending under agriculture should benefit these vulnerable groups, with borrowing limits not exceeding Rs 10,000. This study critically examines the implications of these recommendations on the prioritization and disbursement of credit to the agriculture sector, particularly focusing on the inclusion of marginalized agricultural communities. By analyzing the effectiveness of these policy measures in promoting equitable access to credit and enhancing agricultural productivity, this research aims to inform ongoing efforts to strengthen India's financial policies for rural development and poverty alleviation