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

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Regional Divide in Banking Development in Maharashtra

An enquiry into the regional distribution of banking in Maharashtra comparing the rural and urban areas of the state and various divisions and districts dispels the commonly held notion that the state is a well-banked one. The aggregated indicators of banking development conceal the reality of an extremely wide divide in the distribution of banking between the urban and rural areas. This is essentially a reflection of the district-wise divide between Mumbai and the other districts, particularly those from central and eastern Maharashtra or Amravati, Nagpur and Aurangabad divisions, which have been identified in the literature as economically backward districts and have also been associated with a high incidence of agrarian distress in recent times. With a thrust on the policy of financial inclusion since 2005, there has been an increase in the number of bank branches in underbanked districts of the state. However, this increase has not helped in correcting the regional divide in bank credit and hence, most districts other than Mumbai continue to be significantly credit-deprived.

Rural Credit Cooperatives in Maharashtra

Examining the different phases of growth and distribution of cooperative credit in Maharashtra between the 1960s and 2000s, this paper tries to understand the multiple dimensions of the phenomenon in the state—across regions, crops, ownership and size classes of land, and social groups. Although Maharashtra has been leading in the expansion of credit cooperatives, this has been marked by a distinct bias in favour of Western Maharashtra where cash crops, particularly sugar cane are grown. The process has largely eluded Eastern and Central Maharashtra, where cotton and other crops are grown.

Gender Inequality in Banking Services

The substantial growth in women-members of self-help groups has not meant any major change in the access of women to banking. This brief note shows that women at large remain significantly deprived of banking services. By any criterion - number of accounts, amount of loans, credit in agriculture, banking across socio-economic groups, and rural and urban areas - women remain far more disadvantaged than men. In recent times, there has, in fact, been a worsening of access to banking services for women from rural areas and those from economically backward regions and social groups.

Revival of Agricultural Credit in the 2000s: An Explanation

This paper examines credit to agriculture provided by the commercial banks, including regional rural banks, and finds that contrary to the general perception that the credit revival began in 2004, the actual revival started after 2000. The increase in credit was to a large extent the result of a growing share of indirect finance, which, in turn, has been broadened in scope to cover many new kinds of farm lending. Moreover, even as direct lending to agriculture has also grown, there has been a sharp increase in the share of large-sized advances for financing agri-businessoriented enterprises, rather than for the small and marginal farmers.

Access to Bank Credit

The earlier policy of social and development banking has given way to one of financial inclusion, albeit without compromising commercial opportunities. Rural households are thus turning to more burdensome informal credit channels, with dalit rural households facing greater marginalisation due to financial exclusion from the formal credit system.

Trends in Agricultural Wages in India

This paper examines the trends in agricultural wages in India from 1964-65 to 1999-2000, using data from Agricultural Wages in India and Rural Labour Enquiry, after dealing with the limitations of the AWI data. The trends show that there was a slowdown in the rate of growth of real daily wages of male and female agricultural labourers in more than half of the districts in the sample in the 1990s. Earlier, there was a striking rise in the growth of daily real earnings across all states between 1983 and 1987-88. Second, there was a rising trend in the variations in real wages across districts in the 1990s. Third, the differences between the average wages of male and female agricultural labourers have widened over the years. Fourth, the daily wages of male agricultural labourers exceeded the minimum wage levels in most states, while those of women were below the minimum in most states.

Micro-Credit and Rural Poverty

This paper reviews empirical evidence on NGO-led micro-credit programmes in several developing countries, and compares them with state-led poverty alleviation schemes in India. The study shows that micro-credit programmes have been able to bring about a marginal improvement in the beneficiaries' income. However, the beneficiaries have not gained much by way of technological improvements, given the emphasis on 'survival skill'. Also, in Bangladesh the practice of repayment of Grameen Bank loans by making fresh loans from moneylenders has resulted in the creation of 'debt cycles'.
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