ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by Rangu RaoSubscribe to Rangu Rao

Rural Credit in 20th Century India

This overview of rural credit in 20th century India finds a remarkable continuity in the problems faced by the poor throughout the period. These include dependence on usurious moneylenders and the operation of a deeply exploitative grid of interlocked, imperfect markets. We articulate the theoretical and historical case for nationalisation of banks and provide evidence of its positive impact on rural credit and development. Certain excesses led to the reforms of the 1990s, which did increase bank profitability but at the cost of the poor and backward regions. While the microfinance institution model is unsustainable, the self-help group-bank linkage approach of MF can make a positive impact on security and empowerment of the disadvantaged. Much more than MF is, however, needed to overcome the problems that have persisted over the last 100 years.

Government 'Schedule of Rates'

The Schedule of Rates that state governments currently use to value work done by labour employed in schemes needs to be substantially revised if the promise of the National Rural Employment Guarantee Scheme is to be realised. The schedules now have an inherent pro-contractor bias, encourage the use of machinery and make it virtually impossible for labourers to earn minimum wages.

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