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BANKING TRADE AND COMMERCE
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FINANCIAL ASSISTANCE TO AGRICULTURE AND INDUSTRIES
The problem of rural indebtedness is one of the most important problems with which the agricultural sector of our economy is beset since long. The Indian agriculturist is born in debt and has to live in debt. Owing to his utter poverty and instability of income he is always at the mercy of the village money-lender or sawkar and does little to improve the production of his land for want of economic assistance. It is with a view to help him out of his plight that the system of ' Tagai' was devised even before the British regime. The British administrators adopted the already existing system and passed a number of Tagai Acts between 1871 and 1879. No' active assistance, however, was given till the Land Improvement Loans Act of 1881 and the Agriculturists Loans Act of 1884 were passed. The former Act is broadly concerned with long-term loans, while the latter deals with short-term accommodation.
Land Improvement Lands Act of 1883.
Loans under this Act are granted to cultivators for works of improvement on land such as construction of wells and tanks, preparation of land for irrigation, drainage, reclamation, enclosures, etc. The Collector, Prant Officer and Mamlatdar are authorised to grant loans
upto specified limits bearing an interest of 8½ per cent., i.e. 16 pies per rupee per annum. In particular cases, however, the Government may reduce the rate of interest or charge no interest at all. The loan is given when the grantor is satisfied as to the security with a margin of safety. Generally immovable property is demanded as security against loans to be advanced.
Agriculturists Loans Act of 1884.
Loans under this Act may be granted to holders of arable lands for purchase of seed, fodder, agricultural stock or implements. They are also granted to hire cattle, to rebuild houses destroyed by calamities, to maintain cultivators while engaged in work on land or to achieve some such purpose. The rate of interest, the type of security and the terms and conditions of the grant of loans are the same as under the Land Improvement Loans Act of 1883.
The following tabular statements show the extent of Government assistance under these Acts in the Satara district and bring to our notice the actual needs of the people for Tagai loans.
TABLE No. 14. |
Particulars. |
Loans under Land Improvement Act, 1883. |
Loans under Agriculturists Loans Act, 1884. | |
1955-56 |
1956-57 |
1957-58 |
1955-56 |
1956-57 |
1957-58 | |
|
|
|
|
|
| |
1 |
2 |
3 |
|
|
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
Rs. | |
1. Applications pending at the beginning of the year. |
86 |
69 |
73 |
194 |
150 |
221 | |
2. Amount involved in (1). |
78,650 |
18,625 |
69,300 |
80,690 |
65,800 |
92,820 | |
3. No. of applications received during the year. |
406 |
424 |
294 |
1,542 |
1,120 |
1,770 | |
4. Total amount applied for by these applicants. |
2,23,920 |
2,60,775 |
2,81,817 |
4,26,381 |
3,22,070 |
4.88,803 | |
5. Number of applications sanctioned. |
216 |
193 |
156 |
924 |
491 |
1,098 | |
6. Total amount asked for in 5 above. |
72,645 |
34,275 |
61,586 |
2,02,261 |
96,350 |
2,25,978 | |
7. Total amount actually sanctioned. |
54,987 |
28,646 |
51,540 |
1,94,463 |
86,850 |
1,87,810 | |
8. Total amount actually disbursed during the year. |
47,471 |
28,433 |
52,340 |
1,94,463 |
86,850 |
1,87,810 | |
9. Total loans repaid during the year. |
1,76,786 |
1,22,470 |
1,14,902 |
1,35,144 |
1,49,889 |
1,42,287 | |
10. Total loans outstanding. |
9,37,340 |
7,04,966 |
4,78,480 |
5,93,499 |
6,63,459 |
6,97,185 |
TABLE No. 14—contd.
|
Particulars. |
Financial assistance under Grow More Food campaign. | |
1955-56 |
1956-57 |
1957-58 | |
Loan. |
Subsidy. |
Loan. |
Subsidy. |
Loan. |
Subsidy. |
|
1 |
4 |
|
|
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
|
1. Applications pending at the beginning of the year. |
26 |
-- |
19 |
-- |
69 |
-- |
|
2. Amount involved in (1). |
28,050 |
-- |
21,700 |
-- |
73,400 |
-- |
|
3. No. of applications received during the year. |
186 |
-- |
166 |
-- |
773 |
-- |
|
4. Total amount applied for by these applicants. |
1,56,425 |
-- |
98,010 |
-- |
7,26,840 |
-- |
|
5. Number of applications sanctioned. |
109 |
-- |
45 |
-- |
364 |
-- |
|
6. Total amount asked for in 5 above. |
69,810 |
-- |
18,000 |
-- |
4,35,115 |
-- |
|
7. Total amount actually sanctioned. |
67,279 |
-- |
16,210 |
-- |
4,24,345 |
-- |
|
8. Total amount actually disbursed during the year. |
55,549 |
-- |
17,960 |
-- |
2,76,045 |
-- |
|
9. Total loans repaid during the year. |
81,454 |
-- |
29,011 |
-- |
31,581 |
-- |
|
10. Total loans outstanding. |
2,33,909 |
-- |
2,21,807 |
-- |
3,45,116 |
-- |
TABLE No. 14—contd.
|
Particulars. |
Any other loan for project area. |
Financial assistance by other Government Departments. |
|
1955-56 |
1956-57 |
1957-58 |
1955-56 |
1956-57 |
1957-58 |
|
Loan. |
Subsidy. |
Loan. |
Subsidy. |
Loan. |
Subsidy. | |
1 |
5 |
6 |
|
|
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
|
1. Applications pending at the beginning of the year. |
-- |
-- |
2 |
-- |
-- |
-- |
-- |
-- |
-- |
|
2. Amount involved in (1). |
-- |
-- |
1,000 |
-- |
-- |
-- |
-- |
-- |
-- |
|
3. No. of applications received during the year. |
11 |
8 |
51 |
-- |
-- |
-- |
-- |
-- |
-- |
|
4. Total amount applied for by these applicants. |
11,500 |
6,000 |
71,500 |
-- |
-- |
-- |
-- |
-- |
-- |
|
5. Number of applications sanctioned. |
6 |
6 |
39 |
-- |
-- |
-- |
-- |
-- |
-- |
|
6. Total amount asked for in 5 above. |
10,500 |
5,000 |
60,000 |
-- |
-- |
-- |
-- |
-- |
-- |
|
7. Total amount actually sanctioned. |
8,493 |
4,350 |
56,735 |
-- |
-- |
-- |
-- |
-- |
-- |
|
8. Total amount actually-disbursed during the year. |
8,493 |
4,350 |
56,735 |
-- |
-- |
-- |
-- |
-- |
-- |
|
9. Total loans repaid during the year. |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
|
10. Total loans outstanding. |
8,493 |
12,843 |
69,578 |
-- |
-- |
-- |
-- |
-- |
-- |
TABLE No. 15.
|
Purpose for which financial assistance is — sanctioned. |
Loans under Land Improvement Act, 1883. |
Loans under A. L. Act, 1884. |
|
1955-56 |
1956-57 |
1957-58 |
1955-56 |
1956-57 |
1957-58 |
|
1 |
2 |
3 |
|
|
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
1. For current farm expenditure— |
|
|
(a) Seed |
-- |
-- |
-- |
18,125 |
17,900 |
25,760 |
|
(b) Fodder |
-- |
-- |
-- |
700 |
100 |
1,400 |
|
(c) Manure |
-- |
-- |
-- |
965 |
-- |
1,270 |
|
(d) Farm implements |
-- |
-- |
-- |
-- |
-- |
200 |
|
2. Purchase of draught animals i, e. bullocks.. |
-- |
-- |
-- |
1.70.273 |
67.150 |
1.58,180 |
|
3. Well-digging and
other irrigation projects. |
-- |
-- |
-- |
-- |
-- |
-- |
|
4. Land improvement |
32,211 |
10,425 |
41,563 |
-- |
-- |
-- |
|
5. Consumption |
-- |
-- |
-- |
-- |
-- |
-- |
|
6. Other purposes |
22,776 |
18,221 |
9.977 |
4,400 |
1.700 |
-- |
|
Total |
54,987 |
28,646 |
51,540 |
1.94,463 |
86.850 |
1,87,810 |
TABLE No. 15-contd.
|
Purpose for which financial assistance is — sanctioned. |
Financial Assistance under Grow More Food Campaign |
Any other loan for project area | |
1955-56 |
1956-57 |
1957-58 |
1955-56 |
1956-57 |
1957-58 |
|
Loan. |
Subsidy. |
Loan. |
Subsidy. |
Loan. |
Subsidy. |
|
1 |
4 |
5 |
|
|
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
Rs. |
1. For current farm expenditure— | |
|
(a) Seed |
1.335 |
-- |
1,485 |
-- |
50 |
-- |
-- |
-- |
-- |
|
(b) Fodder |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
|
(c) Manure |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
|
(d) Farm implements |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
2. Purchase of draught animals i. e. bullocks. |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
3. Well-digging and other irrigation projects. |
65,944 |
-- |
14,725 |
-- |
4.23,780 |
-- |
8,493 |
4,350 |
56,735 |
4. Land improvement |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
5. Consumption |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
-- |
6. Other purchases |
-- |
-- |
-- |
-- |
515 |
-- |
-- |
-- |
-- |
|
Total |
67,279 |
-- |
16,210 |
-- |
4,24,345 |
-- |
8,493 |
4.350 |
56,735 |
TABLE No. 16.
|
Time lag between date of application — and date of sanction. |
No. of Applications. |
Amount applied for |
|
1955-56. |
1956-57. |
1957-58. |
1955-56. |
1956-57. |
1957-58. |
|
1 |
2
|
3 |
|
|
|
Rs. |
Rs. |
Rs. |
Less than 1 month |
646 |
446 |
993 |
1,06,205 |
64,670 |
3,04,801 |
1 to 2 months |
428 |
192 |
331 |
1,68,776 |
49,200 |
2,25,628 |
2 to 3 months |
84 |
69 |
197 |
31,675 |
25,455 |
1,41,385 |
3 to 4 months |
18 |
14 |
58 |
9,000 |
4,900 |
23,865 |
4 to 5 months |
-- |
-- |
-- |
-- |
-- |
-- |
5 to 6 months |
-- |
5 |
-- |
-- |
3,850 |
-- |
6 to 7 months |
-- |
-- |
15 |
-- |
-- |
15,000 |
|
7 to 8 months |
5 |
5 |
-- |
2,500 |
2,950 |
-- |
Over 8 months |
74 |
4 |
20 |
37,060 |
2,600 |
15,100 |
Not ascertainable |
-- |
-- |
43 |
-- |
-- |
56,900 |
|
Total. |
1,255 |
735 |
1,657 |
3,55,216 |
1,53,625 |
7,82,679 |
TABLE No. 16. contd.
|
Time lag between date of application — and date of sanction. |
Amount sanctioned |
|
1955-56. |
1956-57. |
1957-58. |
|
1 |
4
|
|
|
Rs. |
Rs. |
Rs. |
Less than 1 month |
99,404 |
61,996 |
2,89,086 |
1 to 2 months |
1,56,447 |
45,050 |
2,03,365 |
2 to 3 months |
23,500 |
18,300 |
1,26,809 |
3 to 4 months |
7,201 |
3,810 |
19,450 |
4 to 5 months |
-- |
-- |
-- |
5 to 6 months |
-- |
2,500 |
-- |
6 to 7 months |
-- |
-- |
10,800 |
|
7 to 8 months |
2,000 |
1,800 |
-- |
Over 8 months |
36,670 |
2,600 |
14,020 |
Not ascertainable |
-- |
-- |
56,900 |
|
Total. |
3,25,222 |
1,36,056 |
7,20,430 |
TABLE No. 17.
|
Time lag between date of sanction and date of disbursement. |
Number of Applications. |
Amount sanctioned. | |
1955-56. |
1956-57. |
1957-58. |
1955-56. |
1956-57. |
1957-58. |
|
1 |
2 |
3 |
|
|
|
|
|
Rs. |
Rs. |
Rs. |
On the same day |
-- |
8 |
18 |
-- |
1,550 |
14,300 |
Less than 1 month |
1,099 |
623 |
1,378 |
3,04,370 |
1,15,331 |
6,39,302 |
|
1 to 2 months |
100 |
78 |
151 |
14,100 |
10,900 |
49,325 |
2 to 3 months |
45 |
12 |
71 |
2,092 |
2,625 |
2,543 |
3 to 4 months |
-- |
9 |
9 |
-- |
3,300 |
4,500 |
4 to 5 months |
-- |
-- |
-- |
-- |
-- |
-- |
5 to 6 months |
-- |
-- |
-- |
-- |
-- |
-- |
6 to 7 months |
-- |
5 |
-- |
-- |
2,350 |
-- |
7 to 8 months |
5 |
-- |
-- |
2,000 |
-- |
-- |
Over 8 months |
6 |
-- |
30 |
2,660 |
-- |
10,460 |
Not ascertainable |
-- |
-- |
-- |
-- |
-- |
-- |
|
Total. |
1,255 |
735 |
1,657 |
3,25,222 |
1,36,056 |
7,20,430 |
TABLE No. 17. contd.
|
Time lag between date of sanction and date of disbursement. |
Amount disbursed. |
|
1955-56. |
1956-57. |
1957-58. |
|
1 |
4 |
|
|
Rs. |
Rs. |
Rs. |
On the same day |
-- |
1,550 |
14,300 |
Less than 1 month |
2,85,124 |
1,16,868 |
4,91,802 |
|
1 to 2 months |
14,100 |
10,900 |
49,325 |
2 to 3 months |
2,092 |
2,625 |
2,543 |
3 to 4 months |
-- |
3,300 |
4,500 |
4 to 5 months |
-- |
-- |
-- |
5 to 6 months |
-- |
-- |
-- |
6 to 7 months |
-- |
2,350 |
-- |
7 to 8 months |
2,000 |
-- |
-- |
Over 8 months |
2,660 |
-- |
10,460 |
Not ascertainable |
-- |
-- |
-- |
|
Total. |
3,05,976 |
1,37,593 |
5,72,930 |
TABLE No. 18.
|
Duration of loan. |
Number of applications. |
Amount Rs. | |
1955-56. |
1956-57. |
1957-58. |
1955-56. |
1956-57. |
1957-58. | |
Less than 3 months |
|
|
|
|
|
| |
3 to 6 months |
-- |
-- |
5 |
-- |
-- |
800 | |
6 to 9 months |
3 |
-- |
-- |
150 |
-- |
-- | |
9 to 12 months |
32 |
27 |
38 |
3,769 |
3,860 |
3,495 | |
1 to 2 years |
359 |
267 |
534 |
29,558 |
24,375 |
40,738 | |
2 to 3 years |
29 |
22 |
106 |
11,810 |
7,000 |
22,000 | |
3 to 4 years |
645 |
315 |
392 |
1,84,311 |
68,878 |
1,22,506 | |
4 to 5 years |
27 |
33 |
286 |
6,555 |
7,900 |
93,276 | |
5 years and above |
160 |
71 |
396 |
69,823 |
25,580 |
2,90,115 | |
TOTAL.. |
1,255 |
735 |
1,657 |
3,05,976 |
1,37,593 |
5,72,930 |
TABLE No. 19.
|
Reasons for Rejection. — |
Number of Applications. |
Amount Rs. | |
1955-56. |
1956-57. |
1957-58. |
1955-56. |
1956-57. |
1957-58. |
|
(1) Lack of security or inadequate security |
652 |
626 |
889 |
3.42,254 |
2,85,560 |
5.99,174 |
|
(2) Purpose of loan not approved |
5 |
13 |
10 |
1,125 |
16,270 |
7,000 |
|
(3) Old dues to Government |
165 |
106 |
155 |
1,02,651 |
46,840 |
89,277 |
|
(4) Miscellaneous |
136 |
111 |
243 |
98,245 |
54,165 |
88,605 |
|
Total. |
958 |
856 |
1,297 |
5,44,275 |
4,02,835 |
7,84,056 |
From the foregoing tables it is possible to make certain observations as regards the granting of Tagai loans. In the first instance the financial assistance granted under both the Acts seems to be very inadequate.
The accompanying tables reveal the general trends in the Government's scheme of assistance under these Acts. It can be seen from table No. 14 that the number of applications received during recent years under Land Improvement Loans Act of 1883 does not show any tendency of substantial increase. To illustrate, the number of applications received in the year 1955-56 was 406. It increased only by 18 during the next year, but dropped again to 297 in 1957-58. On the other hand, the Government attitude is to disburse more and more loans every year, which becomes evident from the loans advanced during the year 1957-58. These circumstances, viz. willingness of the Government to grant assistance and unwillingness of the agriculturists to take its advantage can be explained by the inability of the farmer to repay the loan within the stipulated period.
Figures in tables for the years 1955-56, 1956-57 and 1957-58 further reveal that the time-lag between the date of applications of the loans and the date of their sanction was quite short. Nearly sixty per cent. of the applications were sanctioned during a period of less than one month, and the rest were sanctioned within two to three months.
It is also found from the tables that once the loans were sanctioned there was no delay involved in disbursing the due amounts. The maximum period involved in this was only two months, calculated from the date of their sanction.
There were also few cases where applications for loans were turned down for one reason or the other. More than 68 per cent. of these applications were rejected because of the lack of security or adequate security, thirteen per cent. were rejected on account of the old dues that were yet to be paid to the Government and the rest were rejected for miscellaneous reasons, implying thereby the government's disapproval of the purpose for which the loans were asked for.
Crop Finance.
The Government instituted a system of crop or seasonal finance when it was found that the financial assistance rendered by the Government through its various agencies fell short of the credit needs in the rural areas. The system is thus primarily intended to fill in the vacuum in the credit facilities caused mainly by legislation relating to debt relief, money-lending and land tenure passed during the past few years.
The advances made by way of crop or seasonal finance are secured by the crops grown by debtors. These advances are essentially short term in nature. Their main object is to finance agricultural operations required for raising of crops. The interest charged on these advances is quite reasonable.
The principal agencies which are recognised for grant of crop or seasonal finance are the following:—
(1) Co-operative Societies,
(2) Tagai, Loans (advanced through revenue department),
(3) Grain Depots,
(4) Persons authorised under section 45 of the Bombay Agricultural Debtors' Relief Act of 1947.
As far as possible it is through the agency of the co-operative societies that the advances of crop finance are made to the persons who are parties to the proceedings or awards under the Bombay Agricultural Debtors' Relief Act of 1947. It is only in those districts where there is a paucity of co-operative organisations that the system of crop finance is allotted to agencies other than the co-operative societies. In Satara district the bulk of such finance is being provided by co-operative societies and to a lesser extent through revenue department by way of tagai advances and through grain depots. This is quite in tune with the Government policy of making the co-operative societies the main agency for providing crop finance to adjust debtors. This policy has given impetus to the formation of new co-operative societies.
The accompanying statement shows the position as regards crop or seasonal finance made through co-operative societies in the Satara district during the years from 1946 to 1956.
TABLE No. 20.
STATEMENT SHOWING ADVANCES OF CROP OR SEASONAL FINANCE THROUGH CO-OPERATIVE SOCIETIES DURING THE YEARS FROM
1946-47 TO 1955-56.
|
Year. |
Number of applications. |
Amount of finance applied for |
Amount advanced. |
Amount recovered. |
| | |
Rs. |
Rs. |
Rs. |
1946-47 |
1,463 |
1,44,511 |
10,828 |
756 |
1947-48 |
712 |
90,076 |
25,649 |
74,499 |
1948-49 |
4,762 |
3,62,301 |
3,60,051 |
79,790 |
1949-50 |
2,920 |
5,35,062 |
3,52,611 |
2.13,759 |
1951-52 |
3,800 |
12,15,798 |
4,80,909 |
3,72,514 |
1952-53 |
3,537 |
10,69,877 |
4,63,939 |
3,89,050 |
1953-54 |
3,278 |
9,51,213 |
4,32,584 |
3,90,850 |
1954-55 |
2,758 |
7,78,726 |
2,89,800 |
3,58,810 |
1955-56 |
2,888 |
6,97,757 |
4,32,829 |
4,12,752 |
TABLE No. 20. contd.
|
Year. |
Amount out-standing at the end of the year. |
Amounts of overdues. |
|
Authorised. |
Unauthorised. |
Amount of Government guarantee. |
| |
Rs. |
Rs. |
Rs. |
Rs. |
1946-47 |
10,072 |
10,072 |
-- |
-- |
1947-48 |
-- |
-- |
6,921 |
-- |
1948-49 |
3,54,525 |
-- |
21,353 |
-- |
1949-50 |
2,59,685 |
550 |
52.087 |
-- |
1951-52 |
6,20,990 |
18,750 |
2,75,848 |
-- |
1952-53 |
6,95,879 |
39,900 |
3,37,246 |
-- |
1953-54 |
7,37,613 |
8,172 |
3,30,887 |
-- |
1954-55 |
6,68,603 |
1,47,938 |
2,73,978 |
-- |
1955-56 |
6,88,860 |
-- |
2,19,625 |
8,627 |
The table shows that not all the applications made for obtaining crop finance were entertained. The reason for rejection of some of them was the default in payment of previous dues or want of adequate security furnished by the people. Few applications were rejected on the ground that the applicants owned no landed property.
It is also seen from the table that since the beginning of the system, i.e., from 1946-47 the demand for crop or seasonal finance loans by the debtors under the Bombay Agricultural Debtors' Relief Act has been on the increase. The Government also responded well by increasing the crop finance almost every year from 1946-47 to 1955-56 except for the year 1953-54, when there was a steep fall in the advances of crop finance. Recoveries, however, were not so satisfactory due to inadequate rains, failure of crops and a fall in agricultural prices. This resulted into the accumulation of large amounts of unauthorised arrears in the district.
As said above except in the year 1948-49, when only Rs. 440 were advanced to the applicants there were no advances made by the Grain Depots and Revenue agencies in the Satara District. The advances were made by the co-operative societies.
The following statement shows the arrangement for provision of crop finance made in the Satara district: —
Statement showing the arrangement for provision of crop or seasonal finance made in the Satara District.
|
Name of Taluka. |
Total No. of Villages. |
Number of Villages allotted to the agency of. |
Total. |
|
Co-operative Societies. |
Revenue. |
Moneylenders. |
|
Patan |
205 |
205 |
-- |
-- |
205 |
|
Satara |
152 |
123 |
29 |
-- |
152 |
|
Javli |
I98 |
109 |
17 |
-- |
126 |
|
Wai |
91 |
73 |
18 |
-- |
91 |
|
Man |
73 |
19 |
54 |
-- |
73 |
|
Khatav |
90 |
70 |
20 |
-- |
90 |
|
Mahabaleshwar |
56 |
26 |
30 |
-- |
56 |
|
Karad |
116 |
110 |
6 |
-- |
116 |
|
Phaltan |
86 |
8O |
6 |
-- |
86 |
|
Koregaon |
76 |
76 |
-- |
-- |
76 |
|
Khandala |
45 |
41 |
4 |
-- |
45 |
|
Total. |
1,182 |
932 |
184 |
-- |
1,116 |
With a view to make crop finance available at a cheaper rate of interest through the existing as well as newly organised societies, the societies were advised to admit persons who were parties to any proceedings or awards under the Act coming from their area of operation and also from the neighbouring villages as ordinary members or nominal members and to reduce their lending rate of interest to 6¼ per cent. or 7 13/16 per cent. as the conditions of societies concerned permitted by amending their bye-laws suitably. The Central Financing Agencies agreed to charge a concessional rate of 4½ per cent. to societies in respect of funds provided to finance the agricultural debtors.
All this goes to show that Co-operative Societies played a prominent role in providing crop loans to the agriculturists who are increasingly taking advantage of these facilities.
The Government of India created a Small Scale Industries Section in the Department of Industries with a view to implementing the recommendations and policies of the All India Small Scale Industries Boards constituted by the Ministry of Commerce and Industry. On the advice of this Board the Government have accepted the following definition of small scale industry:—
"An industrial unit employing less than fifty persons (where power is used), or less than hundred persons (where power is not used) and having a capital of not more than five lakhs of rupees is to be regarded as a small scale unit."
In order to help such small-scale establishments and cottage industries the Government is granting them financial assistance under the State-aid to Small Scale and Cottage Industries Rule, 1935. The scheme is mainly intended to assist those units which cannot ordinarily get assistance either from the Industrial Finance Corporation or from the Maharashtra State Financial Corporation. Under this scheme loans are given to artisans for the purchase of tools and equipment and also to serve as working capital. The loans are payable in fifty monthly instalments, and bear a 4½ per cent. rate of interest. In the Satara District the amount of loans considered during the period from the 1st January 1958 to the 30th September 1958, was as follows: —
Firstly, a sum of Rs. 35,000 was advanced to M/s. Phadke Industrial Works, Private Ltd., Karad. This loan was to serve a dual purpose. It was to be utilised for the purchase of land and also as working capital. It bore a compound interest of 3 per cent. and was to be repaid in ten annual instalments.
Two companies, viz., the Plastic Products of India Ltd., Satara, and the B. R. Shinde and Company of Satara, had appliled for loans of Rs. 75,000 and Rs. 10,000 respectively. But they were rejected. The reasons for the rejection of the first were that their factory was located at a place which made its working uneconomic and also because the
management of the company was not in the hands of a suitably or technically qualified personnel. The second application was rejected because the applicant himself had no experience in the field of
industry proposed to be started.
Financial Assistance to Small Scale and Cottage Industries.
The most important aspect of the state's programme for development of industries relates to encouragement to cottage and village industries through provision of training facilities for artisans in the use of improved tools and equipment. More important than this, however, is the financial assistance accorded by the State to these industries. As a result of the sustained efforts of the Government in this direction, there art: 68 industrial co-operative societies in the district, and it is proposed to organise 125 industrial co-operative societies of various categories during the period of the Second Plan. These societies are to be given financial assistance by way of investment in their share capital, subsidies towards managerial expenses and loans and subsidies for purchase of equipment, etc. The financial assistance during the period of the Second Plan was estimated to be about Rs. 436 lakhs. In addition, loans amounting to Rs. 680 lakhs were also expected to be granted under the scheme of the State-aid to individual artisans or their co-operatives.
The Department of Industrial Co-operatives and Village Industries has certain schemes for granting financial assistance to cottage and village industries in the district. Under these schemes loans and subsidies are granted to individual artisans and their co-operatives. In what follows is a description of the operation of these schemes in the district.
(1) Scheme for grant of loans and subsidies to Educated Unemployed persons and Bona fide Craftsmen for the purchase of tools and equipment and for working capital.—Financial assistance upto Rs. 3,000 to educated unemployed persons and financial assistance up to Rs. 2,000 to trained as well as to hereditary artisans in the form of loans and subsidies can be granted under this scheme. In the year 1958-59 Rs. 3,787.50 were given as loan to six persons and Rs. 202.50 were given as subsidies to two persons under this scheme in the district. Two bona fide craftsmen also received Rs. 1.300 during the same period.
(2) Scheme for grant of loans and subsidies to Backward Class artisans for the purchase of tools and equipment and for working capital. —Here financial assistance is given according to the Rules of the Revenue Department. Preference and concessions in this respect are always given to those who are trained in the Government's peripatetic schools or institutions recognised by Government. During the period from 1st July 1958 to 30th June 1959, loans to the extent of Rs. 8,650 were given to ten persons and subsidies to the extent of Rs. 350 were given to two individuals in the district.
(3) Scheme for grant of loans and subsidies to Co-operative
Societies for purchase of tools and equipment and for working
capital.—Under this scheme co-operative societies, one-third at least
of whose members are bona fide craftsmen, can be granted financial
assistance up to Rs. 5,000. Of this amount 50 per cent, can be in the
form of subsidy. To those co-operative societies, the majority of
whose members come from backward class, loans are given free of
interest. For the remaining societies, however, interest at 4½ per cent
is charged.
In Satara district the outstanding amount with three societies as on 30th June 1958 on account of loan for tools and equipment amounted to Rs. 21,771.40. The outstanding amount Rs. 21,771.40 for working capital in case of 23 societies amounted to Rs. 1,11,435 during the same period. In the same way, the loans repaid by societies on account of loans for purchase of tools and equipment came to Rs. 240.28; while on account of loans for working capital the sum was Rs. 9,059.51.
(4) Scheme for grant of Haskell or "Nutan Ghanis on loan-cum-subsidy basis.—The scheme is intended to induce Telis or oilmen to
use improved types of ghanis in preference to the old, less productive ghanis. The nutan ghanis are supplied to telis and their co-operative societies on loan-cum-subsidy basis and the element of subsidy
is not more than ¼ of the total cost or Rs. 75, whichever is less.
During the year 1958-59 only one oil society of telis received a loan
of Rs. 5,245.56 to serve as working capital. Besides the above
important scheme there are various other schemes administered
by the Department of Cottage Industries and Industrial Co-operatives.
Schemes, under which financial assistance is given to forest labourers
co-operative societies and labour contract societies, for example, can
be mentioned in this connection. These schemes are sponsored both
by the State and by the Central Government. Financial assistance
is given for purchase of tools and equipments for share capital, for
welfare activities carried on by the societies, for management
expenses, etc. During 1958-59, no financial assistance under these
schemes have been rendered to any society in this district.
Tanning and Leather Industry Development Scheme.—In this district only three societies received the benefit under the scheme and got Rs. 1,500.00 as loan during the year 1958-59.
Scheme of Khadi and Village Industries Commission.—Under this scheme loans to the extent of Rs. 1,57,713.50 were granted to twelve societies of different types in the year 1958-59.
Financial Assistance to Hand-loom Industry.
The most important amongst various cottage industries in the district is the handloom industry. There are 23 weavers' co-operative societies in the district. For the development of handloom industry financial assistance in the form of loans is granted for purchase of improved tools and appliances and grants are given for opening of sales, depots, plying mobile
vans for the sale of handloom cloth,
establishment of dyeing, bleaching, finishing and calendering plants, for setting up model production centre, etc. Under the handloom development schemes financial assistance to the extent of Rs. 53,200 has been granted to the weavers' co-operative societies out of which Rs. 9,882.36 nP. have been received till 1958-59.
Under the Scheme of Central Financing Agency, Government has placed Rs. 1,24,906 with the Satara District Central Co-operative Bank, Ltd., Satara, for financing the Industrial Co-operatives for working capital. Out of this sum the bank has advanced only Rs. 19,301 to seven societies.
State aid to Fisheries.
Taking into consideration the growing importance of fisheries, in 1945 the Government set up a full-fledged Directorate of Fisheries. The fisheries schemes have a dual importance. Firstly, they serve as supplementary to the programme of Grow More Food and secondly, they help in ameliorating the conditions of the fishing community which is generally very backward.
As the Satara district has no sea-coast, the programme for development of fisheries in the district comprises mainly the development of inland fisheries.
The Department of Fisheries through various schemes grants loans and subsidies under certain terms and conditions to fishermen and their co-operative societies for various purposes such as purchasing of engines, mechanisation of fishing crafts, purchasing or repairing of fishing equipments such as boats, nets, engines, trucks, ice plant, etc. Loan is also granted for working capital.
The principal terms and conditions governing the financial assistance are the following:—
(i) Tangible security valued to the extent of 1½ times the loan amount have to be furnished by the loanee. If not, a personal surety solvent to the extent of twice the amount of the loan with a letter of consent from the surety has to be furnished.
(ii) The loan exceeding Rs. 1,000, is generally paid in two equal instalments, the first instalment being payable immediately after a mortgage deed is executed and the second instalment after vouchers for the expenditure from the first instalment are produced.
(iii) Loan for engine is granted in one instalment.
Fishermen are granted a subsidy on the specific condition that they form a group of five to ten fishermen who should be members of a local fishermen's co-operative society and do fishing collectively. The amount of subsidy in each case is generally 33 to 50 per cent. The repayment of the loan commences three months after the loan is disbursed. The loan is repayable in equal monthly instalments over a period of five years, The loanees are required to furnish
securities, either collateral only, equal to 1½ times the loan amounts, or both personal and collateral securities each equivalent in value to the loan amounts.
Due to an extremely small scope for development of fisheries in this district no financial assistance under any of the above schemes is reported to have been granted either to the individual fishermen or their societies so far.
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