West Bengal- New Forms of Fiddling

per cent to 33.7 per cent. The over- dues of land development banks had gone up from 13.5 per cent of loans due for repayment in 1970 to 23 per cent in 1971. The ARCs chairman had then warned that "it is not too late for remedial action to be taken so as to bring the co-operatives back onto a sound footing and enabled them to play the part expected of them in the nation's drive for increased agricultural production''. However, despite this warning two years ago, the latest Annual Report of the ARC records that the overdues of LDBs "increased alarmingly from Rs 12.89 crores in 1969-70 to Rs 76.33 crores (provisional) in 1972- 73; as percentage of demand, i e, the amount due for repayment, overdues rose from 21 per cent in 1969-70 to 42 per cent in 1972-73." The overdue amound is thus almost equal to the ARCs total disbursements in 1973-74. What the people of the Eastern and North-Eastern regions, where the ARCs disbursements have failed to pick up, appear to lack is the knack of securing large volumes of institutional finance and accumulating large overdues 1 With overdues amounting to over 40 per cent of institutional credit due for repayment, certain important questions arise about the source of these funds and their inflationary potential. A large chunk of co-operative and commercial bank finance is, directly or indirectly, related to created money. For instance, out of Rs 309.74 crores of refinance granted by the ARC upto June 1974, Rs 163.50 crores have come from the Government of India, One- half of the latter amount has been based on funds provided by the IDA and the balance has come from the RBI or has been raised through bonds and debentures which are subscribed to by banks and other financial institutions. Similarly, the Reserve Bank pumps in large amounts of funds into the co-operative sector. The total flow of institutional funds to the farm sector