Private Agencies Sources:
@ Money lenders: Though there are drawbacks, moneylenders are by far the most important source of agricultural credit in India. That we have already seen before, It is therefore, clear that the basic problem of the agricultural economy of India is the huge indebtedness of farmers and their exploitation by private moneylenders. For that government of India make provisions in act as follows a. maintenance of accounts in prescribed forms, b. furnishing of the receipts and periodical statements, c. fixing of maximum rates of interest, d. Protection of the debtors from molestations and intimidations, e. licensing of moneylenders, and f. penalties for infringement of the provisions. The basic objectives of such legislative enactments can be stated as: I. To bring about an improvement in the terms on which private credit was available to agriculturists and to place legal restrictions on the unreasonable exactions of moneylenders, II. To enable civil courts to do greater justice as between lenders and borrowers than was possible in the prevailing circumstances under the ordinary Code of Civil Procedure.
@ Traders & commission agents: Traders & commsiion agents supply funds to farmers for productive purposes much before the crops mature. They force the farmers to sell their produce at low prices and they charge a heavy commission for themselves.
@ Landlords & others: Farmers, predominantly small farmers & tenants, depend upon landlords and others to meet their financial requirements. This source of finance has all the defects associated with moneylenders, traders and commission agents. Interests rates are exorbitant. Often the small farmers are cheated and their lands are appropriated. What is worse, this source of finance is becoming more important—from 3.3 percent in 1951-52 to 14.5 percent in 1961-62 but declined to 8.8 percent in 1981.
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