BANKING TRADE AND COMMERCE

STATE'S FINANCIAL ASSISTANCE TO AGRICULTURE

The practice of granting financial assistance to the agriculturists was in existence even before the establishment of British rule in India and such assistance was extended especially during famine years. The British Government adopted the system that was already prevalent and gave it a legal status. The agriculturists' riots that broke out in several districts of the Deccan only helped to expedite the legislation in that regard.

The Land Improvement Loans Act of 1883 and the Agriculturist Loans Act of 1884 provide the legal framework under which tagai loans are granted to the needy agriculturists. The former Act is broadly concerned with the long-term finance while the latter accommodates persons with short-term financial needs.

Loans under Land improvement Loans Act.

Loans under Land Improvement Loans Act, 1883.-Loans under this Act are granted to cultivators for works of improvement on land such as irrigation, drainage, reclamation from rivers or protection from floods, soil erosion, etc. The Collector, Prant Officer, Mamlatdar or Mahalkari is authorised to grant loans up to Rs. 7,500, Rs. 2,500, Rs. 2,500 and Rs. 1,000, respectively. The interest rate for these loans is generally 8½ per cent hut in particular cases a reduced rate or nominal interest is charged if the Collector so recommends.

As regards security it was provided that the grantor, whoever he may be, had to satisfy himself as to the sufficiency of it with a margin of safety. Movable property was rarely accepted as security. Personal security was accepted if the person was solvent. The security of immovable property was invariably demanded where the amount of loan applied for was large.

Loans under the Agriculturist Loans Act of 1884 could be granted to holders of arable lands for purchase of seeds, fodder, cattle, agricultural implements, rebuilding the destroyed houses, maintenance of cultivators till the harvest and so on. As in the case of the Land Improvement Loans Act, so also in case of Agriculturist Loans Act, the Collector, the Prant Officer or the Mamlatdar is authorised to grant loans up to specified limits. Loans above Rs. 2,500 have to be referred to Government for approval. The interest to be charged was again at 8½ per cent. The conditions of security were the same as those under the Land Improvement Loans Act of 1883.

With a view to improving the agricultural conditions it was decided to extend the scheme of granting financial aid still further. The system of distribution of the tagai loans, therefore, was changed and the co-operative societies, the revenue office and the Zilla Parishad were authorised to give financial assistance to the agriculturist. The amounts of. assistance also have substantially increased so as to cover a larger coterie of clients.

During the First Five-Year Plan, cultivators were encouraged by grant of liberal tagai loans to construct new wells and repair old wells. As a result 308 new wells were constructed and 252 old wells were repaired in the district. The scheme was continued under the Second Five-Year Plan. During 1956-57, 45 new wells were constructed and 23 old wells were repaired. From 1957-58, it was decided to give a further incentive of a subsidy to the extent of 25 per cent of the cost of sinking new wells, in order to step up the tempo of this activity.

The Second Plan also provided for giving tagai loans to cultivators for purchase of oil engines and pumps of indigenous make. During the First Plan period, tagai loans of Rs. 2,98,964 were granted to cultivators for purchase of 208 pumping sets. During the Second Plan a similar amount was granted to them for the same purpose.

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