[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...
[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...
[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...
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REIMAGINING INDIA<br />
was lowest in STs and second lowest in<br />
SCs. OBCs reported higher spread of<br />
indebtedness and amount of loan than<br />
SCs but lower spread and higher amount<br />
of loan than general category of<br />
social group.<br />
State wise distribution of farmers’ indebtedness<br />
suggests that Andhra<br />
Pradesh registered highest incidence of<br />
debts with 82 percent followed by Tamil<br />
Nadu (74.5 percent), Punjab (65.4 percent),<br />
Kerala (64.4 percent) and Karnataka<br />
(61.6 percent). Uttaranchal reported<br />
lowest percentage of farmers with<br />
loan. In terms of per farmer amount of<br />
loan, Punjab carried the highest burden<br />
of loan amount at Rs.41,576 followed by<br />
Kerala (33,907). Haryana stood at third<br />
with Rs.26,007 followed by Andhra<br />
Pradesh (Rs.23,965), Tamil Nadu<br />
(Rs.23,963), Rajasthan (Rs.18,372),<br />
Karnataka (Rs.18,135) and Maharashrtra<br />
(Rs.16,973). Among social groups of<br />
STs, per farmer loan amount was highest<br />
in Punjab (Rs.1,18,495), followed by<br />
Haryana (Rs.23,555), Tamil Nadu<br />
(Rs.21,023) and Andhra Pradesh<br />
(Rs.12,760). In case of SCs, per farmer<br />
loan amount was highest in Rajasthan<br />
(Rs.16,708) followed by Haryana<br />
(Rs.13,341), Kerala (Rs.13308), Tamil<br />
Nadu 12,786 and Andhra Pradesh<br />
(Rs.12,720). For OBCs per farmer loan<br />
amount was highest in Kerala<br />
(Rs.33,116), followed by Tamil Nadu<br />
(Rs.27,355), Haryana (Rs.26,226),<br />
Andhra Pradesh (Rs.23,697), and Rajasthan<br />
(Rs.22,009). In general category<br />
also per farmer loan amount was highest<br />
in Kerala (Rs.38,013) followed by<br />
Andhra Pradesh (Rs.37,802), Haryana<br />
(Rs.31,548), Gujarat, Karnataka and<br />
Tamil Nadu.<br />
Amount of loan taken was generally<br />
utilized for production and consumption<br />
purposes. Data suggest that 30.6 percent<br />
of loan amount was spent for capital expenditure<br />
in farm business followed by<br />
current capital expenditure (27.8 percent).<br />
Non-farm business consumed 6.7<br />
percent. Thus, altogether 65 percent<br />
loan amount was directly used for production<br />
purposes. Another 15 percent<br />
was spent for social development and<br />
remaining 20 percent was on marriage<br />
and other ceremonial occasions and on<br />
consumption expenditure. Medical<br />
treatment and other expenditure could<br />
eat significant proportion in some of<br />
Near landless and marginal households took 56.7 % and<br />
47.2 % of loan amount respectively from informal usury<br />
networks. State wise variations suggest that non-institutional<br />
share of loan fi nance was higher in many states<br />
the states.<br />
Rural credit market has both formal<br />
and informal players. Formal players are<br />
government, cooperatives, commercial<br />
banks, whereas informal credit market<br />
is run by and large by moneylenders - often<br />
farmer, traders including dealers of<br />
inputs, other professionals, friends and<br />
relatives, and others operate as moneylenders.<br />
NSS data suggest that commercial<br />
banks remained major player in providing<br />
credit to farmers (35.6 percent)<br />
followed by cooperatives (19.6 percent)<br />
and government (2.5 percent). Altogether<br />
57.7 percent of credit taken by farmers<br />
was provided through institutional arrangements.<br />
Remaining 42.3 percent<br />
credit market was controlled by informal<br />
players. <strong>The</strong>se players may be categorized<br />
in one bracket of moneylenders<br />
with a few individual exceptions. It is<br />
evident from data in reference that credit<br />
extended by cooperatives and commercial<br />
banks emerged positively directed<br />
towards increasing <strong>size</strong> of holdings<br />
whereas credit extended by moneylenders<br />
had inverse direction. Landless<br />
households took 47.3 percent loan from<br />
moneylenders alone. Adding extended<br />
informal usury network it came to 77<br />
percent. Near landless and marginal<br />
households took 56.7 percent and 47.2<br />
percent of loan amount respectively from<br />
informal usury networks. State wise<br />
variations suggest that non-institutional<br />
share of loan finance was higher in many<br />
states. Non-institutional finance controlled<br />
greater credit market to the tune<br />
of 68 percent in Andhra Pradesh followed<br />
by Rajasthan, Assam Bihar and<br />
Punjab. Although Maharashtra provided<br />
83 .8 percent credit through institutional<br />
sources farmers were not free from<br />
distress and suicides. This suggests that<br />
provision of institutional credit is although<br />
important it alone cannot be sufficient<br />
to rescue the farmers from the<br />
syndrome of despair.<br />
Flow of institutional credit amount to<br />
agriculture over the years increased<br />
many folds by cooperatives, commercial<br />
and regional rural banks in terms of<br />
short, medium and long terms loan. But<br />
the question of distributional aspects of<br />
credit remained to be addressed effectively.<br />
Total credit extended by cooperatives<br />
was to the tune of Rs.24.23 crore in<br />
1950-51 to Rs.15,957 crore in 1998-99<br />
56 THE <strong>IIPM</strong> THINK TANK