All India rural credit survey : report of the committee of direction C.2

Volume 1 : The survey report

The All-India Rural Credit Survey was ini tiated by the Reserve Bank of India in August 1951 with the object of collecting such facts and statistical information as would assist the Re serve Bank, the Government of India and the State Governments in the formulation of an integrated policy in the sphere of rural credit. The planning and organization of the Survey was entrusted to a Committee of Direction consist ing of Shri A. D. Gorwala (Chairman), Prof. D. R. Gadgil, Shri B. Venkatappiah and Dr N. S. R. Sastry (Member-Secretary). The field enquiries. covered 1,27,343 families in 600 villages selected in 75 districts all over the country. Investigations were also held in several other rural and urban places which were the centres of marketing or the seats of administration. To this study of rural credit and allied economic activities, on a hitherto unprecedented scale, was added a careful analysis of the views which the Committee had elicited from officials and non-officials.

The Survey reveals that the private creditor the professional moneylender, the agriculturist moneylender and the trader-still reigns supreme in the field of rural credit, supplying 70 per cent or more of the total requirements. The Government supplied as little as 3.3 per cent, and the co operatives, the equally insignificant proportion of 3.1 per cent. Out of this very little, the larger part went to the bigger agriculturist and only a minor fraction percolated to the smaller cultivator. Most co-operative societies lent on the security of land; and they tended to set aside as 'non-credit worthy' those who could not offer such security. While the private interests of trading-cum-money lending, themselves strong, derived further strength from the whole superstructure of urban trade and finance, the co-operative societies had very little help from the federal structure of Co-operation, itself very weak, or from the State.

Although Co-operation was inadequate, as it could not help being inadequate, in these con Iditions, the Committee believes that there is no alternative to the co-operative form of association in the village for the promotion of agricultural credit and development. Co-operation must, therefore, be enabled to succeed. The Inte grated Scheme of Rural Credit, put forward by the Committee, is designed to create the condi tions necessary for such success.