FINANCE

INTRODUCTION

THE PRESENT CHAPTER DEALS WITH A NUMBER OF ECONOMIC AND CREDIT INSTITUTIONS operating in the field of finance in this district and covers such institutions as the money-lender, the co-operative societies, the commercial banks, the joint-stock companies, the Life Insurance Corporation and many others, directly undertaken or indirectly helped by the Government. It is upon their successful functioning that the material progress and the economic development of the district in regard to agriculture, industry and trade depend.

The past few decades have witnessed, perhaps, more remarkable changes in the field of finance than in any other sphere of economic activity. During this period some of the old institutions have faded into insignificance, while a few have gained a new status. There are others still that have emerged anew under the impact of recent economic and political forces. The age-old institution of money-lenders, for example, which continued for long to be the main source of credit to the rural population of the district, is fast losing ground and its place has been taken by Government agencies that have come forth to extend financial assistance by way of tagai loans and agricultural subsidies to a large number of people. The growth of modern banking system and the rapid spread of the co-operative movement in the country are, again, the outcome of this vast process of economic change.

With Independence, the relative importance of applied economics underwent a radical change in the country. In the light of new surroundings and altered political conditions, new economic policies were formulated and applied and new codes of law were administered. It was to be an era of Government intervention in public life resulting in a gradual supremacy of the public over the private sector of the economy. These changes, significant as they were, affected not only the size and structure of the credit institutions, but also brought under regulation the conditions of their working.

Of no less importance are the other two schemes introduced by the Government to augment its financial resources. The first was the Small Savings Drive launched by the Government with a view to evoke amongst the people a spirit of co-operation and mutual help and encourage them to contribute their humble mite to pool a mighty reserve. The second was the creation of the Life Insurance Corporation consequent upon the nationalisation of the life insurance business in the year 1956. An attempt is made to give an account of all these changes in what follows.

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