GENERAL ECONOMIC SURVEY

FINANCE

The district economy has witnessed a complete reorientation in the field of finance since the publication of the old Gazetteer, seventy years ago. The old Gazetteer mentions the existence of three hankers, 20 money-lenders and 19 firms, having headquarters at Bombay and Jalgaon, most of them having capital amounting to less than Rs. 1,00,000. There was no separate class of insurance agents. The most usual forms of exchange bills were darshani and mudati hundis. Imports were usually paid in bills of exchange and exports for cash. Of urban people, merchants, traders, shopkeepers, brokers, pleaders and a few highly paid government servants and of country people, landlords, heads of villages, money-lenders and a few rich cultivators saved money. There were no large banking establishments. Interest charged by money-lenders was on monthly basis and an addition was made for any intercalary month that may be included. The unscrupulous usurers charged interest rates varying between 70 and 200 per cent.

During the last seventy years the whole pattern of the district economy has undergone such a radical change that the agencies employed in financial operations have felt the impact. Co-operative societies have sprung up and the co-operative movement has speeded up the financial integration of the district. Joint stock banking has developed considerably and the postal schemes have reached the distant parts of the district thus encouraging the saving habits of the people and enabling the proper channelisation of the resources towards the development programme. The expansion of the activities of the State Bank and the rural credit department of the Reserve Bank of India have relieved the farmers of their traditional debts. The insurance habit is fast developing and the business has increased by leaps and bounds. The moneylenders who were a terror to the populace in the past have been reduced to a position of insignificance under various Government rules and regulations. The foremost components of the financial system of the district to-day are the money-lenders, the joint stock banks, the insurance companies, the postal and savings banks and various other agencies working under the direction of Government.

MONEY-LENDERS.

Formerly, there were no large banking establishments in the district except in Jalgaon. Money-lenders who were either Marvad or Gujarat Vanis and Brahmins used to lend money at 6 to 12 per cent interest. Grain and money were advanced for seed and as support to the cultivator's family. Money was also raised by jalap system. Mortgage of land was very common.

Today, the money-lenders' class includes a wide variety of individuals. Till the passage of the Money-lenders Act of 1946 (which made licensing compulsory) most of them indulged in nefarious practices and employed harsh methods to recover loans.

During the past few years the number of money-lenders decreased from 502 in 1948-49 to 355 in 1955-56 because, (i) many of the farmers received tagai from the Government and (ii) stringent rules and regulations were laid on the money-lending business. Even then, money-lenders, because they provide large bulk of agricultural credit, are important. They will continue to be so till the co-operative movement develops considerably as following figures will show: —

Joint Stock Banks.

As Jalgaon district was predominantly agricultural there was little development of banking organisation in the past. In spite of this, the picture was changed during World War II when agricultural commodities commanded a better market and total business grew considerably. At present there are 13 bank offices in the district. Of them five are State Bank offices.

Insurance.

Except the general insurance including fire, marine and accident all the insurance has been nationalised with the establishment of the Life Insurance Corporation in 1956. Now the Life Insurance Corporation is the only largest single insurance agency. It has a branch office at Jalgaon. At present there are 760 agents working under it and the business proposed and conducted by them is worth Rs. 1,41,22,750 and Rs. 1,16,11,750, respectively. Number of policies proposed and completed increased from 1,665 (in 1956) to 5,601 (in 1958) and from 1,077 (in 1956) to 4,603 (in 1958), respectively.

Small Savings Scheme.

The movement was started in India in 1945 to fight the rising spiral of inflation. Today, it is an important source of mobilising public credit in a co-operative way. Following are the various categories of investment in small savings: —

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