Saturday, 27 September 2014
Dr balraj Bishnoi: TRIBUTE TO FATHER OF THE NATION ....................
Dr balraj Bishnoi: TRIBUTE TO FATHER OF THE NATION ....................: KHADI AND VILLAGE INDUSTRIES: AN EVOLUTION Dr Balraj Vishnoi (author ) Beginning can be initiated by taking note of ...
Dr balraj Bishnoi: TRIBUTE TO FATHER OF NATION ........................
Dr balraj Bishnoi: TRIBUTE TO FATHER OF NATION ........................: KHADI AND VILLAGE INDUSTRIES: AN EVOLUTION Dr Balraj Vishnoi ( Author) The Second Five Year Plan (1956-61), which ...
Dr balraj Bishnoi: TRIBUTE TO FATHER OF NATION ........................
Dr balraj Bishnoi: TRIBUTE TO FATHER OF NATION ........................: KHADI AND VILLAGE INDUSTRIES: AN EVOLUTION Dr Balraj Vishnoi ( Author) The Second Five Year Plan (1956-61), which ...
TRIBUTE TO FATHER OF NATION ..............................Series 2
KHADI AND VILLAGE INDUSTRIES: AN EVOLUTION
Dr Balraj Vishnoi
( Author)
The Second Five Year Plan
(1956-61), which gave a high priority to the development of heavy industry and
large investment of public funds in this Sector, found a new justification for
Village Industries. It was propounded that the rising demand for consumer goods
could be met by additional production generated by village and small industries
which required relatively less capital investment and that they could thus help
reduce the inflationary pressures recurring from high investment on heavy
industries. The village and small industries sector was viewed as a progressive
and efficient decentralized sector, closely integrated with agriculture on the
one hand and the large industry on the other. As a result, common production
programs and regulatory devices such as reservations, controls, allocation of
raw materials and purchase policies were advocated. The Karvc Committee
(October 1955) which was appointed to examine the problems of the VSI sector
recommended the organization of industrial cooperatives for implementation of
the expanded programme of village Industries and the initiation of steps to
facilitating transition to higher technology. This was in accordance with the
prevailing preference for the co-operative method in the field on rural
development. Some of these new ideas were incorporated in the industrial policy
resolution of 1956. The Resolution highlighted the potential of village and
small industries as the method of ensuring a more equitable distribution of
national income, as they are capable of creating immediate and permanent
employment on a large scale at relatively small capital cost : Attempts were
also made to assists rural artisans from allocations under rural arts and
crafts in the Community Development Block budgets and through the
training-cum-production centres set up by the Block administrations. In some
places, the state Khadi and Village Industries Boards were invited to start
village industries programmes. KVIC itself took commendable initiative to
organize carcass disposal and bone digester centres, non-edible oil units, plan
products, carpentry and block smithy units, beekeeping etc. and to promote
research in improved tools and equipment. It was against this background that
Ambar Charkha was introduced in 1956-57 with noted hope. But as the Khadi
Evaluation Committee (1960) noted, the programme did not come up to
expectations for various reasons, such as “inadequate training, lack of proper
pre-processing, non-standardization of spinning equipment and inadequacy of the
organizational structure”. The Ambar Charkha had to be remodeled and converted
into in all-metal six spindled unit. It came to be known as New Model Charkha
(NMC). Its introduction also come to be restricted to carefully selected areas.
This on important lesson was learnt by the khadi and village industries
commission about the complexities in the transfer of technology on a large
scale.
The Evaluation Committee headed by Dr.
V.K.R.V. Rao of the institute of economic growth, Delhi took up the survey of
Intensive Area in 1962. It found that out of 121 Areas, 48 were abandoned due to
unsatisfactory working. The committee also found that the activities in most
areas were confined to one or two villages, that the scheme suffered for lack
of resources, particularly for non-industrial activities outside the
jurisdiction of KVIC, that delays in sanction and release of funds by KVIC
affected the progress of the programme and the commission’s attitude to
technological changes and use of power should have been more pragmatic in the
interest of higher productivity. Later in 1966, the Estimates Committee of the Parliament drew
attention to the unimpressive results of the scheme and advised the Government
to evolve an ‘overall and well coordinated plan of rural industrialization’. It
added that in view of the “ideological reservations and inhibions” the KVIC is
not a suitable organization for implementing the programme of a rural
industrialization, covering all rural industries and all rural areas.
We may also take note of
another experiment in intensive work undertaken by KVIC. On the recommendation
of a combined meeting held in June, 1959 Khadi Gramodhyog Samiti of the Sarva
Seva Sangh, the Khadi and Village Industries Boards and the representatives of
Khadi & V.I. Industries Board, the commission decided to intensify its
activities in the Gramdan Villages. In a number of states assistance was
provided under the scheme. Foundations of integrated Development Programme,
which was initiated in April, 1961, were laid by the Intensive Area Scheme and
to a certain extent, by the “Gram Dan” Village Scheme. The objective of the
programme was to develop compact areas with a population of about 5,000 each
into well-knit units of agro-industrial economy where, in addition to Khadi and
Village Industrial, other programmes of rural development such as sanitation,
housing, health services education etc… were also to be developed. It was
intended to stimulate in the local population initiative and desire for the
development of village community as a whole in preference to the programmes of
different sectors of the economy in an isolated manner.
However, in the light of the
observation of the Estimates Committee of Lok Sabh (1961-62) that the Intensive
Area Scheme was outside the scope of the Commission as well as the
unsatisfactory results in its implementation, KVIC decided to discontinue the
Intensive Area Scheme 1963-64. It could not also pursue the Integrated
Development Programme on the lines Visualized in April, 1961. However a limited
(Ltd) programme was launched in 1966-67, with the objective, inter-alia, of
developing new organizations or encouraging existing local institutions for
promoting KVI activities as a part of helping the process of integrate
development of selected areas. In other words, the new approach of the IDP
envisaged building up of institutional infrastructure in areas where KVI
activities are relatively weak or absent. At present this programme sometimes
referred to as Gram Ekai is implemented in 14 states by 57 institutions and
agencies. The pattern of assistance provides sanction of financial assistance
up to Rs. 40,000 grant per IDP lalock to an institution for a period of seven
years, on a tapering basis.
The policies and approaches
laid down in the first and second Five Year Plans were by and large, continued
in the subsequent plans with some change in emphasis on one aspect or the
other. For example, Third Five Year Plan (1961-66) laid stress on improvement
of skills, supply of technical guidance, better equipment and liberalized
credit, with a view to reducing production costs and achieve higher
productivity. It also suggested that a view should be taken on the role of
subsidies and other financial props, so as to motivate production units to
achieve viability as soon as possible. The Fourth Five Year Plan (1969-74) drew
special attention to regional disparities in the development of Khadi and
Village Industries and the need for special efforts in backward areas. The
Fifth Five Year Plan (1974-78) spoke of the needs of traditional artisans who
were getting displaced and suggested larger development of institutional finance
for village industries in the wake of the expansion of the banking structure
after Nationalization. KVIC continued to operate within the four corners of its
state only a few more were added to the list of village Industries as noted
earlier. The feedble exercises initiated in the second Five Year Plan to
integrate Khadi and Village Industries with the larger programme of rural
development came to an abrupt end with the abandonment of the community
Development Programme and the dismantling of the block machinery in most of the
states. Although great concern was expressed in the Fourth Five Year Plans at
the rising unemployment in rural areas and special programme like crash scheme
for Rural Employment (C&RE) and Drought Prone Area programme (DPAP) were
introduced, they remained confined to land-based activities oriented to
artisans was by and large, not drawn into these special employment programmes.
Here, Mention may be made of
the initiative taken by the commission to
interest the state governments in The Artisans Employment Guarantee scheme
popularly known as balutedars block Level Multi-Purpose Cooperation Scheme. The
main object of this scheme was to cover as large a number of artisans as
possible with the help of the available field agencies and to arrest their
displacement from the existing crafts. The scheme was to ensure adequate
earnings on the our hand and provision of fuller employment on the other.
In 1971-72, KVIC approached
State Governments requesting them to formulate detailed schemes for providing
fuller employment to artisans in Khadi and Village Industries. However, only
the Maharashtra State Khadi KVI Board took steps for its implementation and
registered 294 block level multi-purpose co-operatives, under the scheme,
Capital expenditure was born by KVIC and the working capital was secured from
the institutional (cooperative) financing agencies. The Reserve Bank of India
agreed to provide refinancing facilities under section 17(2) (bb) of the RBI
Act. KVIC also provided loan assistance to the artisan members of Block Level
Multi-purpose Cooperatives towards their share capital contributions. The State
Government agreed to meet the establishment cost of the multipurpose
Co-operative Societies they also contributed to the share capital. KVIC extended
interest subsidy scheme to the borrowings of Block Level Multipurpose
Co-operative The
scheme was launched in Maharashtra in 1972-73. In 1985-86 the scheme was
implemented by 295 block level multipurpose cooperatives with a membership of
1.82 lakhs and paid up share capital of Rs. 5.62 crore. It availed of
institutional credit of Rs. 12.20 Crores. The number of artisan assisted under
the scheme was 1.26 Lakhs and the production was valued at Rs. 59.48 Crores.
The Progress of the scheme and the lessons to be drawn there from will be
critically reviewed in a later chapter.
During the second half the
Fifth Plan, the Planning Commission began to show a marked preference to the
beneficiary oriented approach and self employment in the anti poverty programmes.
The trend of thinking got a boost during the Janta period (1977-79) when some
State Government revived the evocative term “Antyodaya” which was coined by
Gandhiji himself. When one is called upon to identify the poorest of the poor
and to help him attain viable self-employment through the acquisition of assets
like tools and equipment and through training, one is compelled to choose a
simple craft or a village industries, if the selected person has the
inclination to be an artisan. Accordingly, the Sixth Five Years Plan (1980-85)
laid down specific targets for Village Industries to be developed under the
Industry, services and Business ( I & B) Sector of Integrated Rural
Development Programme (IRDP) out of the 600 families selected in each block, at
least 50 were thus required to be assisted to take up Village Industries. And
as every such Industry needs for successful operation on a continuing basis,
specif backward and forward linkages, attempts came to be made to involve the
KVIC and the State Khadi and Village Industries Boards and the District
Industries Centres Concerned. The District Level Officer of the State KVIB has
been included in the DIC as Manager-in-charge of Village Industries in some
states. But a great deal has still to be done to make these links strong,
useful and effective. The seventh Five Year Plan document has recorded that the
target under the 1 part of I&B sector could not be achieved in the Sixth
Plan for various reasons. Now that the Seventh Plan (1985-90) has never the less
reaffirmed broadly the approach under IRDP, according to bring about the
organizational and other improvements that will help in achieving the objects.
Some other developments have
also contributed to an increased flow of funds for Village Industries through
channels outside the control of the KVIC. They are the Tribal Sule – Plan, a
concept introduced in the Fourth Five Year Plan, the special component plan for
schedule castes which come into vogue in the Fifth Plan and the special women’s
programme which resulted from the recognition that something special should be
done for the economics betterment of women in general and rural women in
particular. In all these cases, KVIC and the State KVIBs are often required to
provide the necessary support, although no proper organizational arrangements
have been evolved by the concerned agencies for ensuring the necessary degree
of coordination. As a result, coordination has been left to the initiative of
the local officers. This has worked well in some areas while in some others, it
has not.
It is interesting to note that
as flow of funds through other channels for setting up Village Industries has
been increasing, the allocations to the KVIC have been declining in terms of
percentage of the total public sector outlay.
to be continue.................3
Friday, 26 September 2014
TRIBUTE TO FATHER OF THE NATION ..........................series 1
KHADI AND VILLAGE INDUSTRIES: AN EVOLUTION
Dr Balraj Vishnoi
(author )
Beginning
can be initiated by taking note of the phases through which the policy relating
to khadi & Village industries has been developed over the years. For this
purpose, the past may be divided into two periods : one upto 1947 and the other
after 1947. While in the first period, the development of khadi and village
industries was entirely a non-governmental effort under the inspired guidance
of Gandhiji, the originator, in the second period the Govt. of India and the
planning commission assumed the responsibility for fitting khadi & village
industries within the overall framework of the five years plans.
1.1
Four phases may be
distinguished in the first period. Originally, Gandhiji conceived khadi as the
best instrument for giving concrete expression to the “Swedeshi” spirit and for
making effective the boycott of foreign goods in general and foreign cloth in
particular. Khadi was also expected to provide on opportunity to every man,
woman and child for cultivating self-discipline and self-sacrifice as part of
the non-cooperation movement.
1.2
For ensuring coordinated
development of khadi throughout the country, Gandhiji set up in December, 1923,
the All India Khadi Board with branches in all provinces. The organization was
an integral part of the India National Congress and worked under its direction and
supervision. This initial phase can be said to have begun in 1918 and ended in
1924.
1.4
The second phase opened in 1925
with the formation for an autonomous organization called “All India Spinners
Association” (AISA) of Akhil Bharat Charkha Sangh. Although several congressmen
continued to play an important role in the affairs of the sangh, it was
organizationally independent of the congress. AISA did commendable work in
regard to propagation, production and sale of khadi. However, Gandhiji
continued to distinguish the increased volume and value of khadi produced or
sold from the larger social objective of the khadi programme with emphasis on
the latter.
1.5
In the thirties, Gandhiji
turned his attention to other village industries and the result was the
establishment in 1935 of another organization with the name, All India Village
Industries Association (AIVIA). He wrote “Khadi is the central sun around which
the other village industries revolve like so many planets. They have no
independent existence nor khadi can exist without other village industries.
They are absolutely inter-dependent”. Prime facie, the creation of a separate
organization for village industries (AIVIA) may appear to be at variance with
Gandhiji’s philosophy. But on a closer look, it would be clear that AISA and
AIVIA were conceived for different purposes. AISA dealt with the revival of the
extinct craft of spinning and took upon itself the whole process of promotion
production, sales, technological development and welfare of the artisans. AIVIA
concerned itself with resuscitation of some languishing industries through
improvement in tools and training and philosophy of “Swadeshi”. The latter did
not take upon itself the entire responsibility for production and sale. It
organized State Level Association to provide support to craftsmen in varying
ways. Even so, just before his death, Gandhiji saw the necessity of bringing
together not only these two organizations but other organizations in-charge of
constructive work. He proposed merging them in one organization called Akhil
Bharat Sarva Seva Sangh.
1.5 There is evidence to show that Gandhiji was
not entirely satisfied with the progress of the two organizations and the
manner in which the programmes of Khadi & Village Industries were being
developed, as they were ends in themselves. In the latter half of the forties,
he felt an imperative need for an entirely new approach, according to which the
programmes should be carried out as part and parcel of the wider programme of
new-violent village uplift or village reconstruction. He named it as “Samagra
Seva” and said that khadi could begin to have permanent effective only in the
context of complete reorganization of the entire rural economy. He sincerely
felt that otherwise all efforts would not only be inadequate but also largely
futile. In his words, our main concern should be to lay the foundation for this
work as deep as possible and not merely be satisfied with production of khadi
and sale of khadi itself. He laid stress on village self-sufficiency, limitation
of Government Assistance to education, technical research and technical
guidance and reduction on dependence on raw materials from outside.
1.6
It must be added that the
enthusiasm of Gandhiji for Khadi & Village Industries and the building up
of programme of “Samagra Sewa” around them was not shared fully by all national
leaders of importance. Even among those that conceded a role for khadi and
village industries, some stressed the need for adopting better technology and a
flexible attitude to the use of machines. It was in answer to these doubts and
hesitancies that Gandhiji wrote in the “Harijan” dated June 20, 1946 as follows
: Khadi (including village industries) is the only true economic proposition in
terms of the millions of villagers until such time if ever, when a better
system of supplying work and adequate wages for every able bodied person above
the age of sixteen, male or female, is found for his field, collage or even
factory in everyone of our villages so as to give the villagers the necessary
comforts and amenities that well regulated left demands and is entitled to”. In
this context, is worthwhile recalling two statements mode by Gandhiji on the
use of machines.
(A)
“What I object to is the craje
for machinery, not machinery as such. The craje is for what they call labour
saving machinery. Man go on saving labour till thousand are without work and
thrown on the open streets to die of starvation. I want to save time and
labour, not for a fraction of mankind, but for all”.
(B)
“The supreme consideration is
man. The machine should not tend to make atrophied the terms of man. For
instance, I would make intelligent exceptions. Take case of the singer sewing machine. It is one of the few useful
things every invented, and there is a romance about the device itself. Singer
saw his wife laboring over the tedious process of sewing and seaming with her
own hands, and simply out of his love for her, he devised the sewing machine,
in order to save her from unnecessary labour. He, however saved not only her
labour but also this labour of everyone who could purchase a sewing machine”.
1.7
Perhaps, the first move to make
khadi a governmental programme was made in 1946 by the Government of Madras
which deputed a senior officer to obtain advise from Gandhiji and set up a department
of khadi soon thereafter. This was followed by the central Governments
recognition of the importance of rural cottage industries in the Industrial
Policy Resolution of 1948. The Constituent Assembly also included development
of cottage industries in rural areas among the Directive Principles of the
constitution in Article 43. These ideas were elaborated in the first five year
which began in 1951-52.
1.8
According to the First Five
Year Plan, “village industries have a central place in the rural development
programme”, and their development “should be as much a matter of state’s
concern as the increase in agriculture production”. It recognized that the
development of village industries called for “a great deal of local initiative
and cooperation”. As they involved “Processing of local raw material for local
markets with simple techniques. The plan envisaged the “Possibility of turning
waste into wealth, for instance, production of gas from cow-dung and other
refise of the village………………, production of bone manure…………soap making out of
non-edible oils etc”. The plan added : “while organization in village
industries requires drive and direction from the central and state governments,
the primary responsibility for carrying out programmes for village industries
rests with the State Governments ; but in many aspects the frame work within
which they execute the programmes for individual village industries is set by
policies followed by the Central Government. In the Central Governments, there
is therefore need for an organization which will give close attention to the
programmes of these industries and help the create favorable conditions for
action by State Governments, constructive organizations and village
cooperatives”. In accordance with this recommendation, the Government of India
set up the All India Khadi Board in January, 1953. The main functions of the
Board were to prepared and organize programmes of the development of Khadi and
Village Industries, including training of personnel, manufacture and supply of
equipment, supply of raw materials, marketing and research and study of the
economic problems of different village Industries. However, the Board was
expected to function as a clearing house of information and experience
regarding these industries and to work in close cooperation with the State
Governments and the Akhil Bharat Sewa Sangh which had earlier taken over the
activities of AISA and AIVIA in 1948. It was soon found that the Board was
suffering from several procedural handicaps, particularly the lack of timely
financial arrangements. It was, therefore, decided in 1955 that the Board
should be replaced by a statutory body. A bill was accordingly introduced in
Parliament Proposing the establishment of a commission with “power executive as
well as administrative”, for proper development of Khadi & Village
Industries. It also provided “for the All India Khadi & Village Industries
Board functioning as an advisory body which advise the commission generally in
the discharge of there duties”. With the passing of the above bill and the
promulgation of Act No. LXI of 1956, the Khadi and Village Industries
commission come in to being in April, 1957. Besides Khadi, initially 10 village
industries were named in the schedule. “Subsequently, 16 village industries”
were added to the schedule, one in 1959, one in 1962, ten in 1965 and one each
in 1978, 1979, 1980 and 1984, these bringing up the present total of 26 as
follows :-
Beekeeping ; cottage match industry : Manufacture of Fire works and
Agarbattis ; Cottage Pottery Industry ; Cottage Soap Industry (Now-edible oils
and soap Industry) ; Flaying, curing and Tening of hides and skins and
ancillary industries connected with the same and Cottage Leather Industry ;
Ghani oil Industry ; Hand Made Paper ; Manufacture of can Gur and Khandsari
Palmgur making and other palm products Industry and processing, packing and
marketing of cereals, pulses, spices, condiments, Masalas etc……………….
|
1959
|
|
Manufacture
and use of manure and methods gas from cowdung and other waste products (such
as flesh of dead animals, night soil etc.) Biogas
|
|
1962
|
|
Lime
stone, Lime shell and other lime products Industry
|
|
1965
|
|
Manufacture
of shellac; Collection of forest plants and fruits for medicinal purposes,
Fruits and vegetable processing, Preservation and canning, including Pickles
; Bamboo and cane work ; Black smithy ; Carpentry ; Fiber other than coir ;
Manufacture of Household utensils in Aluminum ; Manufacture of Katha ; and
manufacture of Gum Resins.
|
|
1978
|
|
Manufacture
of Lok Vastra Cloth
|
|
1979
|
|
Poly
Vastra
|
|
1980
|
|
Processing
of Maize and Ragi
|
|
1984
|
|
Manufacture
of Rubber Goods (dipped latex products)
|
The
commission and the Government of India persuaded the state governments to set
up Khadi and Village Industries Boards, more or less, on the pattern of the
commission, in order to receive grants and loans from the commission and there
by assist the development of the scheduled Industries.
1.9
Broadly speaking, the idea was
to entrust the task of developing khadi and village industries to those who
knew them best and to give them, for the purpose, sufficient powers, funds and
as much autonomy as would be consistent with the concept of accountability of
public funds. The last mentioned aspect was to be ensured through a Financial
Advisor appointed in the office of the commission by the Govt. of India.
According to Rule 12(5) of KVIC Rule 1957, the Financial Advisor shall have
authority to advise the commission and the standing Finance Committee that a
particular decision affecting the general financial policy of the Government
should be referred to the Government for consideration. How the commission was
constituted from time to time, how the persons nominated to the commission and
the Financial Advisor perceived their respective roles and how the concept of
autonomous institution was implemented in practice would be considered a little
later. For the present, we may continue with the historical evolution of the
policy relating to KVI.
1.10
During its short terms, the All
India Khadi and Village Industries Board initiated in 1954 some experiments in
integrated rural development on sarvodaya principles, in response to the call
of the Prime Minister, Nehru. The were under the caption, Intensive Area
Scheme. The scheme was continued by the commission till 1963-64. This must be
viewed as an opportunity given to Gandhi’s to experiment “Samagra Seva” about
which Gandhiji wrote during his last years. The idea of the Prime Minister was
to try out a new approach through the Gandhians side by side with the Community
Development approach. The intensive Area Scheme was “not intended to give
ready-made programmes to the village community but…………..to guide it to
formulate its own programmes in a comprehensive manner unfettered by any
pre-conceived notions or limitations”. Each area was to consist of 20 to 30
villages, with a population of about 20,000. For implementing the scheme, a
Kshetriya Samiti for the area and gram vikas mandal for every village were
organized and the commission appointed an organizer, on assistant organizer and
some staff technically trained in Village Industries. A though the scheme
envisaged all round development, inducing agriculture and social services, the
commission had no separate funds for these non-industrial purposes and had to depend
on public contributions and the assistance from other government departments.
However, the scheme had wide ranging objectives. There were four economic
objectives : creation of employment at relatively low capital cost and raising
levels of real income; a balanced and diversified occupational pattern;
introduction of better and appropriate techniques; and local or regional self-sufficiency
in essential consumption goods. Social objectives were also four facilities for
education, health, recreation and social security; promotion of people’s
participation, self-reliance, social cohesion and cooperation in gram parivar;
creation of institutional frame work for village development and
self-government and local leadership; and reduction of inequalities and
Antyodaya. Under other objectives was listed, development of village industries
in a balanced rural economy without much dependence on outside protection. A
very ambitious list indeed. The programme had two stages-pre-intensive and
intensive. 121 areas were brought under the scheme.
Wednesday, 30 July 2014
Thursday, 10 July 2014
ROLE OF SHORT TERM CREDIT STRUCTURE & COOPERATIVES
SHORT
TERM CREDIT STRUCTURE
Dr Balraj Vishnoi
States successfully
provides its services to the rural farming community to provide short term
agriculture loan for: a) Agricultural needs; b) Rural development purpose; c)Non-agricultural loans based on various
programmes ; d) Employment oriented schemes; and significantly e) Short term
loans. For instance RSCB enhances Short term Co-operative Credit Structure with
innovative banking and secure financial services with the objective to Serve
Rural areas in particular.
State Cooperative Bank
Ltd (SCB) is an Apex institution of the District Central Cooperative Banks
(DCCBs) functioning in the state. The governance of Primary Agriculture
Cooperative Societies (PACS) meant for villages, District Central Cooperative
Banks(DCCBs) & RSCB is ensured by elected board.
Functional and Structural System
In order to achieve the
objectives of the Cooperatives, an extensive net-work is available to cater the
needs of rural masses at their door-step with a three tier short-term
cooperative credit delivery system.
At the Apex level,
Rajasthan State Cooperative Bank (RSCB) with its 5 Regional and 8 local
(Jaipur) Branches in the State. At the District level 29 DCCBs covering 33
Districts of the State having 409 Branches.
At the grass-root level
5389 PACS/LAMPS which covers 100% of the geographical area of the state, i.e.,
42955 villages.
PACS are the backbone
of Short-term Cooperative Credit Structure. Out of 5389 PACS/LAMPS in the
state, 4117 PACS working as Mini Bank were collecting deposits from their
members. Total deposits of these Mini Banks stood at Rs.805.69 crores as on
31.3.2011AND show variation by 2013 in terms of target and deposits not up to
mark.
SHORT TERM COOPERATIVE STRUCTURE
RBI NABARD
RSCB
DCCB
BRANCHES
FOCUS:
1 issue Kisan Credit
Card to all eligible farmers.
2To increase the borrowing
membership by the end of March, 2013.
3 To inculcate thrift
habits in rural areas by mobilizing rural savings through PACS/MINI Banks and
branches of DCCBs. GSS(PACS/LAMPS)
4 To implement Life
Insurance/ Personal Accidental Insurance/ Crop Insurance Schemes/Group Health
Insurance Scheme covering borrowers & customers of Cooperative Sector.
5 To release farmers
from the clutches of money lenders by providing cheaper and timely
institutional credit.
6 To increase
investment credit to farmers to create/enhance capital formation in the state.
7 To support State
Government's efforts to implement the revival package for Short-term
Cooperative Credit Structure.
8 To promote farmers
club & SHGs ensuring. Credit linkage of Maximum SHGs & special efforts
for women SHGs.
9 To bring about
technological changes in the Short-term Cooperative Credit Structure.
10 To enhance corporate
image of cooperative banking in general and Apex Bank in particular.
11 To start branches of
Mini banks in more than 4000 Bharat Nirman Rajeev Gandhi Seva Kendra’s
constructed at Gram Panchayat Level.
12 To complete the
Computerization of PACS under Vaidynathan Revised Package by Nabard so that
Uniform Common Accounting System (CAS) and Management Information System (MIS)
are successfully implanted.
KISAN CREDIT CARD
In the State of
Rajasthan, the crop loans were disbursed in the cash credit form based on
" Sri Ganganagar or Punjab Pattern" even prior to the introduction of
Kisan Credit Card(KCC) Scheme. However, with the introduction of KCC scheme,
loan disbursement procedure has been renamed accordingly. At present all crop
loans are being disbursed under
KCC. The State Govt.
has also taken keen interest to see that more and more KCC are issued to the eligible
farmers of the state. Short term cooperative credit structure of the state has issued
KCC not op up to expectation by 31st March,2013.
DIVERSIFICATION OF LOAN PORT-FOLIO
In last few years
concerted efforts have been made to diversify loan portfolio so as to provide
an opportunity to DCCBs to cross subsidize their losses in traditional crop
loan business. Consequent to above deliberated efforts, DCCBs have been able to
develop investment portfolio over a period of time.
In this endeavor NABARD
has introduced lots of new schemes
viz; water harvesting
structure, organic farming, agri-clinic /agri-business centers, aromatic and
medicinal plantation, onion storage structure, horticulture, self help groups,
house building, swarojgar credit card etc. for which DCCBs can avail refinance from
NABARD and can further diversify their farm and non-farm investment portfolio.
Apex Bank on its part has been pursuing DCCBs to finance for innovative
activities, the sole purpose of which is to diversify the loan portfolio of
these banks and to facilitate economic development through creation of assets
in the rural areas of the state.
COMMERCIAL LOAN SCHEMES
Ever reducing margin on agricultural lending made
diversification need of the time. Consequent to this concept several loan
schemes were launched from time to time keeping in view the requirement of
general public of the state. Most of the schemes have been adopted by DCCBs,
some of them are as under: -
1 Personal Loans.
2 Vehicle Loans.
3 Working capital finance to the existing & new
indutrial units.
4 Cash Credit limits.
5 Krishak Mitra Yojana
6 Aawas and Vyavasayik parisar loan Scheme.
7Swarojgar Credit Card Scheme.
8 Gyan Sagar ( Education) loan scheme.
9 Financing against N.S.Cs & Securities.
10 Avika Sahkari Credit Card Scheme for Sheep rearing.
11 Viswas Yojna for handicapped persons (FAILURE IN
RAJASTHAN ).
12 Loan against property
CREATING
INNOVATIVE FINANCIAL PRODUCT FOR THE POOREST OF THE POOR (SELF HELP GROUPS):
Under the micro-credit system promoted by Short Term
Cooperative Credit Structure in the State, the DCCBs/PACS have been playing the
role of facilitators to organize Self Help Groups of specially the women
clientele to address their common socio-economic needs by pooling their resources
to make available small interest bearing loans to their members.
The process helps them in inculcating saving habits and
imbibes the essentials of financial intermediation including prioritization of
needs, setting terms & conditions, accounts keeping & building
financial discipline by handling resources of a size beyond their individual
capacities. These groups are graduated to be linked with DCCBs/PACS. Since
beginning of the SHG-Pilot project new SHGs have been formed and most SHGs were
benefited by providing cumulative credit.
WEATHER BASED CROP INSURANCE SCHEME:-
State Govt. has launched Crop. Insurance scheme from Kharif
Crop under which prescribed Crops in the
notified area are being insured. During Kharif 2013 cropsrural farmers was
insured at minimum premium; remitted to insurance companies.
*RBI Report:
Micro Credit
Loans provided by banks directly and through SHG/JLG
mechanism will be eligible to be classified as priority sector advances subject
to the conditions given below:
i.
Income
limit of the individual beneficiary is ` 60,000 p.a.
in rural areas and ` 120,000 p.a. in non-rural areas.
ii.
Loan
does not exceed ` 50,000 per beneficiary.
iii.
Loan
is without collateral.
*Loans
Individual/SHGs
The banks should obtain from MFI, at the end of each quarter,
a Chartered Accountant’s Certificate stating, inter-alia, that (i) 85 percent
of total assets of the MFI are in the nature of ‘qualifying assets’, (ii) the
aggregate amount of loan, extended for income generation activity, is not less
than 75 percent of the total loans given by the MFIs, and (iii) pricing
guidelines are followed.
Cooperatives
as an important financial player in rural economy
Cooperative system was created as an important institutional
framework for ensuring necessary credit flow to agriculture. Rural cooperative
credit institutions have played a large role in providing institutional credit
to the agricultural and rural sectors in the past. However, contribution of
cooperative sector in the upliftment of rural economy has drastically reduced
over the years. Out of the total direct institution credit for agriculture and
allied activities, loans issued by cooperatives was 23.9 per cent in 2008-09,
down from 46.2 per cent a decade ago. This ratio, however, improved in case of
SCBs from 44.8 per cent in 1998-99 to 65.3 per cent in 2008-09.
There is, therefore, a need to revitalize the cooperative
sector by ensuring speedy implementation of the Vaidyanathan Committee
recommendations. The key recommendations
of the Committee were related to encouraging such institutions for product
restructuring, institutional restructuring and allowing them to borrow from any
financial institution. So far, 25 State Governments have signed the MoU
with Government of India and NABARD, comprising more than 96 per cent of the
rural cooperatives operating in the country.
Target
groups under Agriculture and allied activities
In order to have focused approach for meeting the credit
needs of different groups under agriculture sector, target groups are
classified as under:
a. ‘Small & Marginal farmers including SHGs, JLGs and
other aggregators exclusively of SFMF;
b. Other individuals, aggregators and proprietorship firms;
c. Others such as corporates, partnership firms &
institutions.
Sub-target
for small and marginal farmers
The definition of
Small and Marginal farmer is given below:
Small Farmer: A farmer with a landholding of more than 1 hectare but less
than 2 hectares
Marginal
Farmer: A farmer with a
landholding of up to 1 hectare.
MANAGEMENT
INFORMATION SYSTEM (significance)
Robust Management Information System (MIS) is a sine qua non
for effective monitoring of performance, understanding the gaps and formulating
right policy responses. With adoption of technology by banks, the scope for
better MIS exists. Technology has changed the face of banking in India and it
can as well enhance quality and timeliness of data. Processing of data into
useful information for MIS and decision support systems in individual banks as
well as at aggregate level is important. For this, a uniform data reporting
standards need to be put in place which will reduce reporting requirements and
improve overall efficiency. Keeping this in view, there is a need to review the
existing MIS prevalent in banks, and suggest ways to streamline the same in
terms of frequency of compliance, data consistency and data integrity.
Towards credit cooperative reform
Since the 1990s India
has taken steps to liberalize its financial sector. These reforms were first
mainstreamed in the government-owned commercial banks and subsequently among
the regional rural banks (RRBs), but not in the rural CCS. A comprehensive
reform program to transform India’s CCS has been prepared in recent years
(Vaidyanathan 2004) and is now being implemented. Announced in January 2006, the reform package
was “designed to transform the potentially viable CCBs into democratically
governed, efficiently managed, financially sustainable, self-reliant entities
that can provide a wider range of financial services to the rural poor”.
Legal reforms are to be geared at
full independence and autonomy of cooperative institutions; regulatory reforms
at effective enforcement of RBI’s prudential regulations and corporate
governance standards; operational reforms at uniform financial reporting and
internal control systems, improved credit appraisal and risk management, and
new staffing policies; and restructuring at cleaning the balance sheet.
Since 2006 Nabard has
been implementing the reform package on behalf of the Government of India.
Total cost of the short-term CCS at the all-India level was estimated at
Rs136bn (US$3bn): 92% for cleaning up accumulated losses and 8% for audit,
human resource development, and technological support. The costs are to be
shared by the central government (68%), state governments (28%) and the CCS
(4%). The central government (GOI) is to provide its share as grants, while the
states are to meet their share from their budget or through open market
borrowing. In support of the revival package, ADB sanctioned a loan of US$1
billion, the World Bank US$600 million and KfW €130m to GOI. GIZ, the German
Agency for International Cooperation, in cooperation with DGRV, the German
Cooperative and Raiffeisen Association, is among the agencies providing
technical assistance, with a focus on an improved audit system and the development
of a competence-based training certification system. In 2007 one of Nabard’s
first acts of implementing the Revival Package for the Short-Term Credit
Cooperative System aimed at internal control and financial transparency of the
PACS, by preparing an obligatory Common Accounting System (CAS) and Management
Information System (MIS) together with handbooks,
followed by similar initiatives for the DCCBs and SCBs, with inputs by GIZ and
DGRV. Implementation of the CAS/MIS, including capacity building
and consolidation of reporting up to state and national levels, is a still
ongoing, a challenging process.
By March 2012, 25
states (out of 28) participated. The number of PACS has been declining due to
mergers and closures. Special audits had been completed of 80,837 PACS in 25
states, and of 319 Credit Cooperative Banks (CCBs) in 15 states.
Recapitalization assistance had been released to 54,715 PACS, amounting to
US$2.28 billion, with a share of 79.1% from Union Government, 7.5% from state
governments and 13.4% from the CCS/PACS. The CCS question the likely outcome
insofar as the main focus, next to internal control of CAS and MIS on recapitalization.
RBI
annual report
STCR
of GOI
KVIC and UNDP assistance, Dr.Balraj
Vishnoi / Cooperative Department, Rajasthan.
RSCB
ltd Rajasthan/Apex bank progress and profile
Nabard
circulars 71/DCRR-04/2007 (18.5.07), 157/DCRR-15/2007 (23.8.07), 123 /DCRR-09/2007-08
(19.7.07).
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