Human resources and rural development

During the past one and half-decades, credit has been made out to be a key factor in the process of rural development. With the commencement of the Fourth Five Year Plan, aggressive efforts at institutionalising rural credit commenced, having come to realise that the spread of co-operatives did not very much help the process of agricultural and rural development. In fact in retrospect, it would appear that all the moves on the part of Government of India to induct banks into to rural credit area have been strategic. Chronologically speaking, indirect assistance for rural credit flowed through co-operatives and Government supported fertiliser and foodgrain supply organisations in the late Sixties and it was very convenient for any commercial bank to operate that way as it suited their security based lending approach.
The next step was to finance the small farmers and marginal farmers who were potentially viable. Here also land was the base, though the security-base was slightly weakened. Simultaneously, agricultural labourers were asked to be covered in certain proportion. This meant a major departure from a purely commercial operation. There were tremors in the banking corridors. Government of India came up with supportive organisational intervention through the Small Farmers and Marginal Farmers and Agricultural Labourer's Development Agencies (SFDAs) and (MFALDAs) (latterly both were merged into SFDAs) which were to identify the clientele to be financed by Banks and the areas of assistance