Role of RGVN in Micro Finance Services of Assam

Authors: Nihar Ranjan Kalita

Country: India

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Abstract: Since the 1950s, various governments in India have experimented with a large number of grant and subsidy based poverty alleviation programmes. The Indian state put stress on providing financial services to the poor and underprivileged since independence. The commercial banks were nationalized in 1969 and were directed to lend 40% of their loan able funds, at a concessional rate, to the priority sector. The priority sector included agriculture and other rural activities and the weaker strata of society in general. The aim was to provide resources to help the poor to attain self sufficiency. They had neither resources nor employment opportunities to be financially independent. To supplement these efforts, the credit scheme Integrated Rural Development Programme (IRDP) was launched in 1980. But these supply side programs (ignoring the demand side of the economy) aided by corruption and leakages, achieved little. Further, ‘The share of the formal financial sector in total rural credit was 56.6%, compared to informal finance at 39.6% and unspecified sources at 3.8%. Not only the formal credit flow was less but also uneven. The vacuum continued to be filled by the village moneylender who charged interest rates of 2 to 30% per month (Rural Credit and Self Help Groups- Microfinance needs and Concepts in India- K.G.Karmakar 1999). 70% of landless/marginal farmers did not have a bank account and 87% had no access to credit from a formal source.( World Bank NCAER, Rural Financial Access Survey 2003). The figures show that these mandatory and dedicated subsidized financial programmes, implemented through banking institutions, have not been fully successful in meeting their social and economic objectives.

Keywords: -

Paper Id: 1654

Published On: 2015-05-17

Published In: Volume 3, Issue 3, May-June 2015

Cite This: Role of RGVN in Micro Finance Services of Assam - Nihar Ranjan Kalita - IJIRMPS Volume 3, Issue 3, May-June 2015.

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