Top 9 Measures for Eradicating Indebtedness from India

This article throws light upon the top nine measures for eradicating indebtedness from India.

Measure # 1. Protecting the assets of the agriculturists from passing into the hands of moneylenders:

For this purpose, many acts have been passed like the Land Alienation Act and the Encumbered the Estates Relief Act of 1876.

Measure # 2. Regulation of the activities of moneylenders:

These include acts like:

(a) The Deccan Agriculture Act 1879:

Under this act, the courts were allowed to go behind the contract of debt and to modify it in favour of the borrower.

(b) The Various Loans Act 1918:

This act tried to improve the legal position of the borrower.

(c) The Regulation of Accounts Act 1930:

It aimed at protecting the debtor from manipulated accounts by prescribing forms of accounts and insisting on the debtor being supplied with these regularly.

Measure # 3. The Punjab Relief of Indebtedness Act 1934:

It drew a distinction between secured and unsecured loans for purposes of rate of interest.

Measure # 4. Various Acts like the Punjab Registration of Moneylenders Act 1938:

It provided for the registration and licensing of moneylenders

Measure # 5. Co-operative Credit Societies Act 1904:

By this act, the fanners were given loan by the societies for the purchase of seeds, fertilizers etc. They were to be encouraged to work on co-operative basis.

Measure # 6. Co-operative movement:

After independence Government of India and state governments pay attention to the problem. Co-operative movement have been encouraged. Co-operative marketing societies have to be started to provide goods and facilities to the rural poor.

Measure # 7. Nationalisation of commercial banks:

The commercial banks were nationalized in 1969. At present, the commercial banks are mandated to earmark 18% of their total annual lending to agricultural sector as part of priority sector lending.

Measure # 8. Co-operative credit institutions:

Co-operative finance is the best and the cheapest source of rural credit. It works at a very low rates of Interest in advancing loans.

Measure # 9. Role of NABARD:

NABARD Is National Bank for Agriculture and Rural Development set up by the Govt., of India on 12th July 1982. It is set up as an apex Development Bank with a mandate for facilitating credit flow for promotion and development of agriculture, small scale industries, cottage and village industries, handicrafts and other rural crafts.

It also has the mandate to support all other allied economic activities in rural areas, promote Integrated and sustainable rural development and secure prosperity to the rural areas.

In discharging its role as a facilitator for rural prosperity, NABARD is entrusted with:

1. Providing refinance to lending institutions in rural areas.

2. Bringing about or promoting institutional development.

3. Evaluating, monitoring and inspecting the client banks.

Besides this pivotal role, NABARD also:

(i) Acts as a coordinator in the operations of rural credit institutions.

(ii) Extends assistance to the government, the Reserve Bank of India and other organisations in matters relating to rural development.

(iii) Helps the state governments in reaching their targets of providing assistance to eligible Institutions in agriculture and rural development.

Some of the milestones in NABARD’s activities:

1. As on 31st January 2007, through the Rural Infrastructure Development Fund (RIDF), Rs. 59,795,35 crore have been sanctioned for 2,31,702 projects covering irrigation, rural roads and bridges, health and education, soil conservation, drinking water schemes etc.

2. Watershed Development Fund, with cumulative sanctions of Rs. 578, 95 crore for 427 projects in 124 districts of M states, has created a people’s movement in rural India.

3. Farmer’s now enjoy financial access and security through 582.50 lakh Kisan Credit Cards that have been issued through a vast rural banking network.

4. District Rural Industries Projects (DRIP) has generated employment for 23.34 lakh persons with 10.95 lakh units in 105 districts.

Submitted by : Dr. Maxwell, Category : Indebtedness