CHAPTER- 2

EVOLUTION OF THE AGRICULTURAL CREDIT MARKET IN WEST BENGAL SINCE 1977: A JOURNEY FROM IMMISERISED

STAGNATION TO AGRICULTURE-LED DEVELOPMENT

This Chapter deals with some aspects of the flow of the agricultural credit in

West Bengal vis a vis that at the national level. The entire chapter is based on

secondary sources of information. The first part of this chapter deals with the role of

land reform in a backward economy. In an economy like West Bengal, la.'ld reform

is likely to open up a possibility of 'agriculture-led development'. The concept of

'agriculture-led development' received a concrete theoretical foundation in the hands

of Bukharin and Kalecki. It has been discussed in the second part of the chpter that

the concept of 'agriculture-led development' got a fresh revival in West Bengal, with

the recent experience of high agricultural growth arresting of the national trend of

immiserisation following a successful implementation of agrarian reforms.

It has been argued in the third part of this chapter that at the national level the

flow of institutional credit to agriculture since bank nationalization has not been able

to ensure agricultural growth but has hastened up the process of differentiation by its

skewed distribution across social classes. The state-wise disbursement of financial

assistance by NABARD has only widened the inequality accross regions and states.

Finally, the discussion on the agricultural credit market in West Bengal shows

not only a more equitable distribution compared to that in the national level, but also

75

a growmg association of the institutional credit with the 0n gomg process of

agriculture-led development.

2.1. AGRICULTURE-LED DEVELOPMENT AND WEST BENGAL: A THEORETICAL APPRAISAL:

The recent experience of West Bengal may be explained in the light of the

theory of agriculture-led development. The problem of agriculture-led development

was initiated during the Great Debate in the Soviet Union in a- quite different context.

Hence it can't be directly linked up with India1• On the one hand Preobrazhensky

extended the idea that agriculture should be exploited as an internal colony by means

of unequal exchange without which a Socialist economy can't be a viable one

(Preobrazhensky, 1965). Bukharin seems to be the initiator of the concept of

agriculture-led development. He developed the idea that instead of squeezing the

agricultural sector in order to extract surplus for industrialization, a more viable and

sustainable alternative lay in nourishing this sector and developing co-operatives of the

poor. Further incentives to these co-operatives could be provided by the newly

established socialist state by means of credit and other development assistance, which

may discriminate against kulaks. Once the national co-operative started to take lead in

the rural economy, it would enhance the economic surplus from the agricultural

sector, which in turn, would hasten the process of economic development as a whole.

It is noteworthy that in Bukharin' s theorization, state assistance in general and

institutional credit to agriculture in particular seems to act as a control instrument for

development.

76

The concept of agriculture-led development has gained a concrete theoretical

shape in the hands of Kalecki. In Kalecki 's formulation, in an underdeveloped mixed

economy, the rate of supply of necessities (food) may be limited by institutional

factors, such as feudal land ownership and domination of peasants by merchants and

moneylenders. As a result 'the average rate of increase in the supply of necessities

over the planning period, is kept down to a rather low level'. (Kalecki, 1970: 153)

According to Kalecki's formulation, the rate of increase of supply of necessities as

fixed by institutional barriers to the development of agriculture, determines the rate of

growth of national income. (Kalecki, 1970: 152) Therefore according to Kalecki,

' ... the main 'financial' problem of development is that of adequate agricultural production. The key to 'financing' a more rapid growth is the removal of obstacles to the expqnsion of agriculture, such as feudal land-ownership and domination of peasants by money-lenders and merchants'. (Kalecki, 1970: 152)

2.2. LAND REFORMS AND CLASS DIFFERENTIATION IN AGRICULTURE:

The transition of a pre-capitalist agriculture does not always follow a

unique path of agrarian evolution. Sometime it is slow and accommode the old mode

of production. Sometime it is fast and harsh. These two paths were described by

Lenin as the Prussian or conservative path of 'semi-feudal capitalism' and American

path of radical agrarian reform '2.

The radical way of abolition of the landlordism inherited from the colonial·

periods had never been on the agenda of the Indian ruling class. On the contrary, after

Independence, a compromise was made between the Indian bourgeoisie and the landed

77

oligarchy which permitted both to co-exist peacefully. This system may be called

'landlord-capitalism' (U. Patnaik, 1988) which is akin to the Prussian path of slow and

evolutionary agrarian change described by Lenin. The survival of all the retrogressive

economic agents like landlords, moneylenders and traders in the post-independence

period, had asserted their negative impact on output growth4. An alarming level oflow

productivity in agriculture in the late fifties and early sixties compelled the government

to scatter the new technology in a few pockets of the country without disturbing the

prevailing agrarian structure. In the absence of any effective agrarian reform, all the

fruits of the new technology had been cornered by the rural rich accentuating the

prevailing land and asset inequality iri rural India.

This is where the process of differentiation in Indian agriculture comes in. The

term 'differentiation' essentially means the peasant class differentiation, the idea

developed by Lenin in his famous work 'Development of Capitalism in Russia'5. The

differentiation of the peasantry as it is experienced in India involves the following

trends:

(i) Income distribution over economic classes had worsen sharply over time as

a result of the adoption of green revolution technol"ogy. The latter shows a marked

concentration with the labour-hiring holdings. The labour-hiring classes show a

complete domination over the structure of asset, input, output and product marketed.

(U. Patnaik 1987,1988)

(ii) The agricultural labour population to the total agricultural households rose

in the post green revolution period (Shetty 1990). The percentage of male and female

78

agricultural labour population to the main workers increased during 1981-91. (Census

of India 1991)

(iii) The real wage of agricultural labourers declined following the green

revolution (Bardhan 1970).

(iv) Intersectoral terms of trade declined against agriculture since the mid­

seventies (P. Patnaik 1988, Shetty 1990). It may be noted that while the rich peasants

seek to appropriate all the gains of the favourable terms of trade, they like to pass on

all the misery of adverse terms of trade on the poor (P. Patnaik 1988).

(v) Rural unemployment increased in the post green revolution period following

a decline in the cropping. intensity owing to the higher input price. (Rao 1989)

The trend-break in the growth rate during the eighties in West Bengal was

associated with the opening up of the horizon of diversified rural activities. As a

result, some positive structural changes may be observed in recent years in West

Bengal. The changes may be described in terms of the following trends.

(i) The proportion of total rural workers in India depending on the primary

sector has declined quite marginally and at a slow pace, from 83.35 per cent to 82.26

per cent between 1981 and 1991. Compared to the all India figures the proportion of

total rual workers depending on the primary sector declined from 77 per cenno 73 per.

cent in West Bengal between 1981 and 1991. Accordingly, both the secondary and the

tertiary sector employment has increased. The percentage increase in the total rural

workforce engaged in primary sector in West Bengal during the same period was

26.98 per cent while the secondary and tertiary sectors recorded a growth rates of

79 '

51.79 per cent and 67.28 per cent respectively. Further the growth rates of rural

female employment in West Bengal were higher in all the sectors during the same

period. Particularly in the secondary sector it was the highest. 'Thus, rural West

Bengal is in the expected path of the transition'. (Arun Kumar et.al., 1995)

(ii) West Bengal follows the same national trend in the demographic front in

the sense that birth rate, death rate and the infant mortality rate - all declined between

1980-81 and 1990-91. However the ranks of West Bengal for these three rates have

improved among all other Indian states from 8 to 5 (birth rate), 7 to 5 (death rate) and

6 to 4 (infant mortality rate) between 1980-81 and 1990-91. (Dasgupta, 1995)

(iii) The percentage of male and female agricultural labour population to the

main workers marked an increase for India, but experienced a decline for West Bengal

during 1981-91. (Census of India 1991)

(iv) Casualisation of rural workers increased steadily for all India from 1972-73

to 1987-88. But for West Bengal after an initial rise from 1972-73 to 1983, it marked

a fall in 1987-88. (Chandrasekhar 1993)

(v) It is evident from NSSO Surveys, that between 1983 and 1987-88,

unemployment rate of all kind6 for male workers declined in West Bengal, while it

marked a general rise for all India. (Chandrasekhar 1993)

(vi) The employment in non-agricultural activities under Left Front rule

increased as a result of growth and development of agricultural sector. (Chandrasekhar

1993)

(vii) According to the Expert Group on the Estimation of Proportion and the

80

Number of Poor (EGEPNP), the head count incidence of poverty in West Bengal

declined by over 20 percentage points between 1977-78 and 1987-88, as against a

decline of 14 percentage points in all India and this was among the largest decline in

poverty in any Indian state. (Sen and Sengupta 1995) According to another estimate,

the percentage of rural population in poverty declined from 64 in 1972-73 to 30.3 in

1987-88 in West Bengal, whereas in all India level the decline was from 54.0 to 33.4.

The rate of decline was(-) 2.25 percent per annum for West Bengal against(-) 1.37 -

percent per annum for all India7.

(viii) According to the EGEPNP, agricultural wages tripled in West Bengal

during 1977-78 to 1987-88, and the real wage increase in West Bengal was also

among the highest in India. (Sen and Sengupta 1995) A study by Jeemol Unni (1988)

also revealed the fact that the real wage of agricultural labourers - for both male and

female, was much above -the national level in West Bengal for the year 1987-88.

(ix) The percentage of agricultural labour households with land declined from

48.6 in 1977-78 to 44.1 in 1983 all India, while the same had increased from 45.2 to

47.0 in West Bengal during the same period8.

One must explain these changes in West Bengal vis a vis national level in

proper theoretical perspective. It should be mentioned in clear terms that no radical

redistributive land reform has taken place in West Bengal, without which no

fundamental changes can be possible. The land re~orm which has been carried out in

West Bengal is a- limited one, defined by adherence to the fundamental right to

property in the Constitution. In this sense the Left Front has successfully implemented

81

the Congress programme of land reform and not its own programme. The latter is

concerned with the radical redistribution of cultivated land by revolutionary means and

a destruction of the rentier class, the jotedars. Such a radical redistribution continues

to remain a declared task of the Left in India. Such a radical redistribution did take

place, in Russia after the 1917 October Revolution. But in Lenin's analysis this simply

laid the basis for a democratic and wide-based process of peasant differentiation, rather

than the narrowly-based process of landlord opression (Lenin, 1970; pp. 486-87).

Particularly in a situation like that in West Bengal even when the percentage of hired

workers might be declining, in Leninist concept, the differentiation might still be going

on in terms of increasing command over assets, ou,tput, labour and marketed product

in the hands of a minority developing into capitalist farmers. (Lenin, 1960; pp. 97-99,

Kautsky, 1988; pp. 165-166) Therefore the national trend of the peasant class

differentiation cannot be stopped in West Bengal, as long as West Bengal continued

to be operated under the same national economy and the same Constitution.

However, the above mentioned positive structural changes have taken place in

West Bengal in consequence of the commitment of the Left Front government to

actually implement every legal provision of the limited land reform programme. As

we have seen land reform has been characterised by the registration of bargadars

giving the effective security of tenure and the acquisition and effective distribution of

the ceiling surplus land, implementation of minimum wages for labourers through

strong trade union action and curbing of the worst abuses of the jotedar system. The

poorer peasants and the labourers have been given power to some extent through their

82

representation in elected Panchayats. All this represents a substantial achievement

towards democratisation within the existing overall constraints. It has made

differentiation more broad based and has helped to prevent the immiserisation of the

labourers and the poor seen in most other parts of India.

2.3. HIGHER FLOW OF INSTITUTIONAL CREDIT, GROWING PROCESS OF DIFFERENTIATION AND LOW GROWTH OF AGRICULTURE: POST BANK-NATIONALIZATION EXPERIENCE IN INDIA:

pointed out that the late starters cannot follow the classic path of capitalist IYI ct\~ hw~t~ ~ s.c.tt''"" ~ o.. "--t..: ""5 s1sh .........

development. A close and active : /t.Dt.e.::/rl! of the statel\is essential for capitalist

development in these countries. In India the nationalization of 14 major scheduled

commercial banks in 1969 is considered as an important effort in this direction. As a

result,. the agricultural sector, which was almost untouched by the formal credit

ht).S system, was flooded with massive flow of agricultural credit. But how far ~he huge

inflow of agricultural credit ;_· been able to do away with· the long inherittlnce of r· •

usury and other kinds of pre-capitalist impediment ?

An affirmative reply to this question can hardly be given from the experience

of Indian agriculture for the last two decades or more. During the eighties there had

been a sharp decline in the compound growth rate of gross capital formation in

agriculture and in the ratio of total investment in agriculture (both public and private

investment) to gross domestic produce. The growth rate of agricultural output also

83

revealed a stagnation10. The common sense logic suggests that the large influx of

agricultural credit played a neutral role, if nofnegativei~9-n..e.~' f\

On the other hand, the increased flow of institutional credit to agriculture had

an adverse distributional effect. This had been revealed by the paradoxical decline in

the percentage of households reporting outstanding cash dues to institutional agencies

from 14.7 percent to 13.0 percent between 1971 and 1981, when the percentage of

cash dues outstanding to institutional agencies marked a big jump during the same

period. The paradox may be explained by the fact that the higher flow of cash dues

outstanding to institutional agencies had been cornered by the increasingly smaller

proportion of beneficiaries. (Bhattacharyya 1991) The asset-group wise and size-class

wise distribution of credit as presented in the next section (in comparison with West

Bengal), further confirms the growing appropriation of the institutional credit by the

upper classes in rural India.

The adverse distributional impact of the institutional credit to agriculture has

also been revealed by the distribution of financial assistance disbursed by the

NABARD to major states during 1992-93 as shown in Table 2.1. It is clear from Table

1 that states in Eastern India in general received lower proportion of financial

' assistance from NABARD compared to the national average, as well as to states in

other regions. In terms ofNABARD's disbursement per rural household, West Bengal

and other states in Eastern India remained far below the national level as well as

below other states in Noth Western, Central and Southern ~egions. Almost all the states

.in the latter regions accounted for the national average figures of the NABARD's

84

financial assistance and its disbursement per rural household. This is despite the fact

that since the eighties the states in Eastern India recorded a better performance of

growth in agriculture. (Rao 1989; Sen and Sengupta 1995) This is the reflection of the

fact that the distribution of NABARD's assistance to agriculture did not take into

account the demand conditions across the states. A lion share ofNABARD's assistance

went to the agriculturally advanced regions having a strong rich farmars' lobby.

However, among the states in Eastern region, West Bengal's position is relatively

better than other states in the region in terms of both the criteria (table-2.1 ).

The experince of the post-bank-nationalzation period in India was unique in

some senses. It is indeed the common phenomenon ofall growing capitalist countries,

as Kautsky pointed out, that the flow of institutional credit accentuates the process of

differentiation by denying loan to the poor borrowers; but at the same time it also

ensures the high rate of agricultural growth, which is the main pre-condition of the

capitalist system. (Kautsky 1988; pp. 88, 108, 121) In the case of India, the massive

flow of institutional credit to agriculture accentuates the process of differentiation

without creating any impulse for agricultural growth. (Bhattacharyya I 995) Unlike

in growing capitalist economies, it has also allowed usury capital to co-exist.

2.4. LAND REFORM AND INSTITUTIONAL CREDIT: THE CASE OF WEST BENGAL

This section attempts to analyse the growth and distribution of agricultural

credit in West Bengal and their interrelation with agricultural growth and agrarian

85

reform. An idea of agricultural credit market in West Bengal may be obtained from

NSS data. The data however, is inadequate for the present purpose; because the NSS

indebtedness survey conducted in the 37th round, gives information only upto 1981.

To overcome this limitation, the analysis have been carried out by taking data also

from the other sources like the Reserve Bank of India for the current periods.

Some scholars have reservations on the quality of RBI and NSSO data in

indebtedness (Prabhu et.al., 1988; Gothaskar, 1989; Bell, 1991 ). These data show a

substantial increase in the share of institutional credit in total credit between 1971 and

1981. The outstanding cash debt of the rural household from institutional sources was

29.20 per cent of total debt in 1971-72, which increased to 61.20 per cent in 1981 .

Conversely the share of non-institutional credit particularly from moneylenders

declined drastically. This is a welcome development if it reflects reality. The second

finding was the drastic decline in the percentage of total households reporting

outstanding loans in rural areas from 42.81 to 19.97 during the same period. Prabhu

et.al. (1988) pointed out that this order of decline involves a reduction also in the

absolute numbers of rural households reporting outstanding debt. This seemed

implausible to many in a situation where total number of rural households was

increasing. One explanation takes the data at face value and argues that cultivators

undertook productive investment through their own funds in the seventies to a greater

degree than before (Prabhu et.al., 1988). But most analysts argue that there is an

underestimation of the number of indebted households in 1981. The reasons· for this

underestimation can be summarised as follows.

First, there might be a small sampling error as NSSO shifted its sampling

strategy from a relatively few villages (2000) and many households per villages ( 40)

in 1961, to more villages (8000) and a fewer households per village (8) in 1981.

Secondly, the sample of village selected for survey is divided into two sub-samples

and allocated to NSSO under the central government and the state governments

respectively. There is generally a large difference between these two sample estimates.

At the all India level, where the central sample reported 25.81 per cent of rural

cultivator households to be indebted, the corresponding state sample percentage was

a mere 18. 72. Since the state sample generally yield lower estimates it is assumed that

they suffer from underestimation, perhaps owing to the factthat quality and training

of the NSSO' s own investigators are superior to those of state cadres. Since the state

sample has a weight of 50 per cent the total sample, the underestimation is carried

over to the estimates obtained by pooling the state and central sample results. Prabhu

et.al. (1988) estimated the approximate underestimation of borrowers at 13.11 million

or 14 per cent of total. rural households in 1981. Gothaskar (1989) painted out that the

actual debt may also be underestimated from the borrowers motive to emphasize the

inadequate loan facilities in order to secure more credit. It might be that with a

consideration of obtaining debt waiver, households repudiated their disabilities.

However for all practical pul-poses in this chapter, we have to depend on the

official statistics even if it suffers from errors. In our later chapter on credit, we shall

try to compare the NSS findings with that of our survey estimates.

87

However, the magnitude and direction of the agricultural credit market can well

be understood from the NSS data as depicted in Table 2.2 to Table 2.8. Table 2.2

shows a comparative picture of source-wise distribution of agricultural credit in West

Bengal vis a vis India between 1971 and 1981. It is evident that the rise in the share

of institutional credit during 1971-81 was marginally higher in West Bengal than in

India. Among the non-instituional sources the decline in the share of the three main

exploiting classes, namely landlord, agricultural moneylender and professional-

moneylender12 was considerably large in West Bengal compared to that for all - India.

The share of relatives and friends, on the other hand, was still higher in West Bengal

despite its fall from 1971 level. All these trends are a clear indication in favour of a

reform-oriented shift in the agricultural credit market in West Bengal.

Table-2.3 shows the asset group wise distribution of credit according to the

sources in 1981 for West Bengal and India. It is evident that for almost all income

groups the share of the institutional source in West Bengal was much higher than in

India. Particularly, the share of the institutional credit for the lowest asset group was

17.9 percent for West Bengal compared to 8.92 percent for all India.

Table 2.4 gives the percentages distribution of households and total loans by

different asset groups of cultivator households for 1981 in West Bengal and India. it> lo~ a...ss.e.t ~ ~..s

Credit distribution is Y'ru:>"-r/; bi~seA ~n West Bengal compared to India. The two

lowest asset groups in West Bengal with 3.62 per cent of households have 14.70 per

cent of total credit compared to the corresponding 3. 6 per cent of households in India

as a whole commanding roughly 9.3 per cent of total credit only. The next 19.40 per

88

cent of total households in West Bengal commands 44.30 per cent of credit compared

to about 40 per cent for the corresponding percentage of households iry India as a

whole. At the highest level of asset holding the top 13.5 per cent of households in

West Bengal commands only 6.1 per cent of total credit while the corresponding top

13.5 per cent in the all India level commands as much as about 9.5 per cent. The

Lorenz Curve for West Bengal and India shows It~"~~?' 'd~~~~i in the sense that

lower assets groups have higher access to credit compared to their respective

proportional representation of households. This is due to the various credit schemes

of the central and state government for the weaker sections of the society.

. Notwithstanding the fact that the share of agricultural credit for productive

purposes increased betweem 1971 and 1981, it was below the national average in West

Bengal for both these years (Table-2.5).

The terms and conditions of agricultural credit market in West Bengal is an

interesting area to explore. Table-2.6 deals with the security of debt. It is noteworthy

that there has been a big increase in the percentage of secured debt in West Bengal

from 75.9 in 1971 to 88.5 in 1981.The magnitude ofthis increase of(+) 12.6 percent

was far more than 2.6 percent rise in all India during 1971-81. Within the secured·

debt, the percentage share of mortgage on immovable property exhibited a big increase

of more than ( +) 14 percent during· 1971-81 while the loans on personal guarantee

marked a marginal decline. This relative shift in security market is indeed a sign of

the on going process ofimpersonalization and de-interlinkation of agricultural credit

market. As a matter of fact, in the informal market, hardly any loan is advanced now

89

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90

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without any corresponding guarantee of mortgage security. This might be a reflection

of a situation in which the lenders are powerless to recover loans not supported by

adequate security.

Notwithstanding the fact that the share of agricultural credit for productive

purposes increased betweem 1971 and 1981, it was below the national average in West

Bengal for both these years (Table-2.5).

The terms and conditions of agricultural credit market in West Bengal is an

interesting area to explore. Table-2.6 deals with the seeurity of debt. It is noteworthy

that there has been a big increase in the percentage of secured debt in West Bengal

from 75.9 in 1971 to 88.5 in 198l.The magnitude ofthis increase of(+) 12.6 percent

was far more than 2.6 percent rise in all India during 1971-81. Within the secured

debt, the percentage share of mortgage on immovable property exhibited a big increase

of more than(+) 14 percent during 1971-81 while the loans on personal guarantee

marked a marginal decline. This relative shift in security market is indeed a sign of

the on going process ofimpersonalization and de-interlinkation of agricultural credit

market. As a matter of fact, in the informal_market, hardly any loan is advanced now

without any corresponding guarantee of mortgage security. This might be a reflection

of a situation in which the lenders are powerless to recover loans not supported by

adequate security.

The outstanding loans at various interest rates is depicted in Table-2. 7. Though

the corresponding figures for 1971 and 1981 are not directly comparable, yet some

trends are clear. First of all, loan issued at nil rate of interest increased more in

91

magnitude in the case of West Bengal than in India during 1971-81. It may be

mentioned that only relatives and friends generally provide loan at nil rate of interest

which for West Bengal (21.5 per cent) was almost the double that of India (I 0.3 per

cent) in 1981. Secondly, the loan outstanding at the higher rate of interest (25 per cent

and above in 1971, 20 percent and above in 1981 ), the rate at which moneylenders

provide loan, declined from 20.8 percent in 1971 to 14.9 percent in 1981 for West

Bengal while an increase of almost the same magnitude was observed for all India.

Thirdly, the loan issued at intermediate rates of interest, particularly at the bank rate

(9 3/8 - 18 3/4 percent in 1971 and 1 0-15 per cent in 1981 ), marked a very big

increase in West Bengal from 19.9 per cent to 50.0 per cent between 1971 and 1981.

The increase was much higher in West Bengal relative to the all India level.

The asset group wise outstanding cash due at various rates of interst for 1981

is shown in Table-2.8. The outstanding. cash dues at nil rate of interest for lower asset

group was much higher in West Bengal. On the contrary the loan outstanding at the

rate of interest of 20 percent and above was lower in West Bengal than in India for

all the asset groups in general and the lower asset groups in particular. However the

cash dues outstanding at the intermediate rate of interest of 10 percent to 15 percent

for the two lowest asset groups in West Bengal was less than the national level. For

all other asset groups the performance of West Bengal was far better than India.

Some general observations may be made from the above NSS data, though no

definite conclusion can be arrived at til the data on next NSS round on indebtedness

is published. First of all, the process of institutionalization of agricultural credit market

92

seems to have strengthened during the period 1971-I98l and the level of

institutionalization in West Bengal was higher than the all India level. Particularly the

dominance of landlords and moneylenders in agricultural credit market has been

curbed to a large extent in West Bengal. Secondly, relatives and friends seems to

occupy a larger share in the agricultural credit market in West Bengal. Some scholars

eg. Biswas (I989) expressed doubt about the true character of these relatives and

friends. According to them, the 'free rate of interest' is not so free in reality and some

other implicit valuations are likely to be attached with it like unpaid or underpaid

labour services. However the recent field level empirical surveys [Socio-Economic

Research Institute (I 981, I988), Bhaumik (I993}, Khasnabis (I 995)] reveal no such

trends in West Bengal. Particularly in a field-based study Ratan Khasnobis has pointed

out that,

'The 'friends and relatives' account for 28 of II9 cases of short-term credit. As a source of credit, this is only second to the merchants. About 36 per cent of the tenants depend on this category of lenders for meeting their loan requirements. The 'friends and relatives' often supply interest free loans to the tenants .. .In fact, out of II cases of interest free loans ... as many as five are offered by the category of 'friends and relatives'. Even when they charge interest in monetary terms, ordinarily the rate is lower than that of the professional moneylenders.'

Thirdly, agricultural credit market ofWest Bengal has been more impersonalized as

is indicated by the changes in the terms and conditions of the agricultural credit

market in general and the nature of the security in particular. Finally, the distribution

of agricultural credit in West Bengal is far more egalitarian in West Bengal compared

to all India.

93

Apart from the NSS data one may gained some meaningful insight by going

through other sources of data as well, eg. RBI. The size class wise distribution of

agricultural credit is depicted in Table-2.9. The short term loan on the one hand and

medium and long term credit on the other are considered for the two periods, viz.

triennium ending ('TE) 1983 and 1991. Per account outstanding credit (PACO),

percentage of account of commercial bank credit and percentage of amount of

commercial bank credit are considered for the marginal and small farmers (upto 2.5

acres), medium farmers (2.5 acres to 5 acres), large farmers (5 acres and above) and

the average for all the size classes. It is revealed from Table-2.9 that the per account

credit outstanding in West Bengal was below the national average figure for the

marginal and small farmers. However the large farmer in West Bengal revealed a

higher than national average performance for short term loan in 'TE 1983, and for

both the time periods for medium and long term loan. This trend might be explained

by the fact that West Bengal receives far less ofNABARD's financial assistance than

the national average as shown in Table 2.1. The relatively small proportion of the

large farmer population in West Bengal than in t~e other states (Mukherjee and

Mukhopadhyay 1995), might also be the reason for the trend. Table-2.9 has also

shown that the percentage of account and amount of commercial bank credit marked

a higher share in West Bengal than · in India for the lowest size class and vice versa

for the highest size class for all the time periods. However no uniform trend was

found for the middle size class. In this sense West Bengal experienced a far more

egalitarian distribution of credit than the all India level.

94

An attempt has been made in a district level analysis to discover the relation

between the growth of commercial bank credit and growth of agricultural production

in Table 2.1 0. For this purpose, the growth rate of outstanding agricultural credit for

1977-93 is displayed with the growth rate of agricultural production estimated from

two different sources of data by Saha and Swaminathan (1994) and Sen and Sengupta

(1995). For both the cases the rank correlation coefficients between the growth rate

of agricultural credit and the growth rate of agricultural production are found to be

significantly positive. However, West Bengal fell short of India in terms of the growth

rate of outstanding credit, despite her highest growth rate of agricultural production

among all the Indian states during the eighties which was even more than the double

the national average. This might be a reflection of the imbalances in the nature of

disbursement of agricultural credit by the · banking agencies.

Table 2.11 seeks an interrelation between growth of account of outstanding

credit of the commercial banks and the percentage of total area covered under land

reform to net sown area. The interrelation seems to be quite high as revealed by the

significantly positive rank correlation coefficient between the variables among the

districts. The growth rate of commercial bank account was found to be marginally

high in West Bengal than in all India, while the former was far ahead of the latter in

terms of the percentage of total area covered under land reform to net sown area.

Districtwise generation of state domestic product per capita (PCSDP) is shown

against per account outstanding credit of commercial bank (PACOC) in Table 2.12.

The rank correlation coefficient between PCSDP and PACOC increased between 'TE

95

1983 and 'TE 1989 but it found to be non-significant for both the time periods. The

values of all the variables were found to be less than the national level in West Bengal

for both the time periods.

In Table 2.13, an one to one correspondence is examined between per hectare

commercial bank credit (CBPH) and the average rank of development of the districts.

The level of development of any district is represented by its average rank. Four major

development variables are taken for the analysis, e.g. per hectare fertiliser

consumption, per hectare area irrigated by govt. canal, percentage of electrified

villages to total villages and percentage ofliteracy. Ranking these variables districtwise

and taking the average ranks of the four variables for a district at any year, gives its

average rank. All these variables for almost all the districts showed a steady increase

over the three periods- 'TE 1973, 'TE 1983 and 'TE 1993 (Table 2.13.A). This might

be a reflection of the on going process of agriculture-le~ development of the state.

Coming back to Table 2.12, the rank correlation coefficients between

(districtwise) CBPH and average rank of development are found to be significantly

positve for all the periods. This has reaffirmed the earlier conclusion that the

commercial bank credit is increasingly tying itself up with the on going process of

agriculture-led development in the state. This is despite the fact that per hectare

availability of the commercial bank. credit was less than the national level in West

Bengal in the recent past.

96

2.5. CONCLUSION:

This Chapter has attempted to give a comparative vision of the distribution of

agricultural credit in West Bengal vis-a-vis the national level. The growth and

development linkages of the agricultural credit flow have also been explored. It is seen

that West Bengal was far ahead of national average in terms of more equitable

distribution of agricultural credit. On the other hand, it has been found from a district

level analysis that agricultural credit flow had a growing association with the variables

related to agricultural growth, agrarian reform and economic development. This was

in spite of the fact that West Bengal received far less financial assistance from

NABARD compared to the nationl average. The flow of the institutional credit to

agriculture in West Bengal has to be raised to a higher level, if the growmg

association of credit and economic development is to be maintained.

97

NOTES

1. James Boyce showed that agricultural output growth rate in West Bengal from 1949 to 1980 was 1.74 which was below the rates of rural and total population increase. (See, Boyce 1987: 76-81)

2. The whole controversy in the Soviet Union was centered on the question of transition to socialism. While in India it is difficult to look beyond the element of capitalist development in agriculture. In spite of this, one might have got some meaningful insight from the great debate in the Soviet Union.

3. Lenin in his 'Agrarian Programme of Social Democracy in the First Russian Revolution, 1905-1907' pointed out the two forms of bourgeois agrarian evolution. The first path is Prussian path where 'feudal landlord economy slowly evolves into bourgeois, Junker landlord economy, which condemns the peasants to decades of most harrowing expropriation and bondage, while at the same time a small minority of Grossbanern ("big peasants") arises'. The second path is called American path, where 'there is no landlord economy, or else it is broken up by revolution, which confiscates and splits up the feudal estates. In that case the peasant predominates, becomes the sole agent of agriculture, and evolves into a capitalist far~er'. (Lenin, 1962: 239)

4. According to Utsa Patnaik, the compromise was made with a wishful thinking that the erstwhile landlords would be transformed productively to capitalists even if their landed monopoly would not be seriously challenged. In practice 'it constrains growth by confining investment in a productivity raising techniques to an excessively narrow social sratum in the village'. (U. Patnaik, 1988)

5. Lenin in his historic contribution 'Development of Capitalism in Russia' first published in 1899, developed his thesis of differentiation of the peasantry. Lenin refuted the contemporary populist Narodnik view that the peasantry was a homogeneous entity and any kind of impoverishment of the peasantry would result in a collapse of the home market. Lenin showed that capitalism was already the dominant tendency in the Russian countryside where the process of diffemtiation liquidated the· old peasantry into two distinct classes - rural bourgeoisie and rural proletariat. In Lenin's scheme, the differentiation of the peasantry comprised a process which created a home market for capitalism where peasants in a large proportion being alienated from all means of production including land, became pauperised and were forced to buy more of

. their ever declining consumption baskets from the market.

98

6. Usual Status Unemployment Rate (USUR), Current Weekly Status Unemployment Rate (CWSUR) and Current Daily Status Unemeployment Rate (CDSUR).

7. Report of the National Commission on Rural Labour, Vol.II, Govt. of India, Ministry of Labour, New Delhi, 1991.

8. ibid.

9. The annual compound growth rate of gross capital formation in agriculture at 1980-81 price was 5.9 per capita per annum (pcpa) and 2.6 pcpa for the period 1971-72 to 1980-81 and 1981-82 to 1987-88 respectively. The- annual compound growth rates of gross irrigated area were 2.46 pcpa and 1.57 pcpa during 1971-81 and 1981-87 respectively. Total agricultural investment as a proportion of GDP showed a steep decline from a peak of 4.74 percent in 1979-80 to 2.46 percent in 1988-89. Total agricultural investment as a proportion of agricultural gross domestic product revealed a decline from a high of 0.13 in 1979-80 to 0.075 in 1988-89. Altogether, the figures show for declining investment in agriculture and a picture of stagnation (A. Ganesh Kumar, 1992)

10. The long term trend growth rate of GDP originating in agriculture for the period 1949-50 to 1987-88 at 1980-81 prices revealed a complete stagnation at 2.2 percent per annum (Nagraj, 1990) Though the GDP originating in agriculture during the eighties showed a marginal increase over the previous two decades, it had not been able to touch the growth rate of the fifties. This 'higher growth', was 'neither a trend acceleration nor a statistically significant one' (Nagraj, 1990) Moreover this 'higher growth rate' would vanish, if agriculture, forestry, and fishery are taken into consideration (Bhargava and Joshi, 1990).

11. It might be a plausible hypothesis for the failure of the agricultural credit to create an impetus for agricultural growth that the institutional credit often might not have any other way but to be diverted into unproductive purposes. A comparison between 26th and 37th round of NSS data reveals a decline in the percentage of households reporting outstanding debt for productive purposes. K. Seeta Prabhu (1988) and Shetty (1990) also reached the same conclusion.According to Shetty, 'Though the number of cultivator households borrowing from institutional sources increased by 14.1 percent between 1971 and 1981, there occurred a decline of over 15.4 percent in the number of borrowing for productive purposes'. According to Seeta Prabhu, 'As many as thirteen of the seventeen major states recorded a decline in the number of

99

households borrowing for productive purposes. The decline is greater than national average in nine states'. [Prabhu (1988), Shetty (1990)]

12. An agricuturist moneylender was defined in All India Rural Debt and Investment Survey as one whose income was derived mainly from agriculture and allied activities and to whom moneylending was a subsidary source of income. On the other hand the professional moneylender was one for whom moneylending was the principal source of income. Loans from lanlords to their own tenants were classified under the head 'landlord'. Loans advanced by the land owners to person other than their tenants, were classified under 'agricuturist moneylender', 'professional moneylender'etc. depending on the occupation of the land owner. However in our own survey we have not subdivided the catagory 'moneylender'. This is because there is not a single 'professional moneylender' household in our sample. In general professional moneyenders are hardly found in rural West Bengal as confirmed by many other studies mentioned in Chapter 1.

100

T A B L E 2.1

Statewise Distribution of Financial Assistane Disbursed by the NABARD during 1992-93

Eastern I Assam 2 Bihar 3 Orissa 4 West Bengal

North-Western 5 Punjab 6 Haryana 7 Uttar Pradesh

Central 8 Gujarat 9 Kaharashtra

10 Kadhya Pradesh II Rajasthan

Southern 12 Andhra Pradesh 13 Karnataka 14 Kerala 15 Ta111il Nadu

Other States

India

Percentage of NABARD's Financial Assistance to

State to Total

0.93 3.42 2.60 4. 4 9

5. I 6 4.19

17.47

5.37 11.53 6.50 5.45

11.26 8.43 4.40 7.15 1.65

Disbursement (Rs] Per Rural Household

66.70 66.70

Il8.00 I 19.00

507.10 520.40 229.00

264.20 295.70 172.20 229.50

257.80 361.50 253.30 20 I. 00

NA ---------------------------100.00 210.80

Source: Govt. of West Bengal: Econoaic Review, 1993-94.

101

T A B L E - 2.2 Sourcewise Percentage Distributi~n of Outstanding Credit for Cultivator Household in Rural Area: West Bengal and India

-------------------West Bengal India

1971 1981 1971 1981

I. Institutional 33.00 65.30 3]. 70 63.20 I. Govt. 16.30 7.30 7.10 3.90 2. Co-operative Society/Bank 15.10 24.80 22.00 . 29.80

' Com11ercial Bank ]. 30 30.70 2.40 28.80 ". I Insurance ~ frovident Fund 0.30 2.50 0.20 0.70 , .

II. Non-Institutional 67.00 34.70 68.30 36.80 ~ Landlord uo 1.10 8.10 3.70 ,;,

6. Agricultural Moneylender 12.50 5 .I 0 23.00 8.30 ? . Professional Moneylender 15.60 5.30 13.10 7.80 8. Trader 9.40 5.10 8.40 3.10 9. Relative I Friend 24.10 15.00 13.10 8.10 10. Others l.?O 3.10 2.60 5.20

-----------------------------------------------------------------------------------Total (Inst. + Non-Inst. l 100.00 100.00 100.00 100.00

------------------------------------------------------------------------------------Source: RBI:All India Rural Debt and Investment Survey,19?1 and 1981

102

:'ABLE 2.3 Asset-group wise Percentage Distribution of Outstanding Credit According to Source for Cultivator Households in Rural Area

for 1981: West Bengal and India ·---·---------------

West Bengal India 1971 1981 1971 1981

------------------------------------------------------------------------~----Upto 1000 18.00 82.00 8.90 91.10 1000 - 5000 20.10 79.90 28.60 11.4 0 5000 - 10000 35.60 64.40 32.60 6 7. 4 0 10000 - 20000 58.10 41.90 45.70 54.30 20000 - 50000 69.30 30.70 55.10 H.90 50000 - 1 lakh 70.60 29.40 58.00 42.00 1 lakh - 5 lakhs 84.70 15. 30 76.40 23.60 5 lakhs l above 100.00 0.00 94.90 5.10

-·---------------------------All Groups 65.50 34.50 61.20 38.80

-------------------------------------------------------------------Source: RBI:All India Rural Debt and Investaent Survey, 1981.

103

Upto 500 500-1000 ~

I 000-2000 2000-5000 5000-10000 1 0000-20000 20000-50000 50000-I lakh I lakh-5 lakh

TABLE- 2.4

Asset-group wise Percentage Distribution of Households and Total Outstanding credit for

Cultivator Households in 1981

West Bengal

Households Credit Households

4.30 3.62 10.40 1.58

15.40 19.14 28.90 11.30 17.00 21.30 13.42 21.60 9.44 20.73 25.12 4.20 28.83 10.02 6.IO I3.97 3.46 0.00 9.72

5 lakhs & above 0.05 0.00 0.45

Total 100 100 100

India

Credit

1.30 3.20 7.40 21.50 21.30 16.70 13.10 8.70 6.90 0.00

100

Source :RBI :All India Rural Debt and Investment Survey, 1981.

104

! A B L E - 2.5 Purposewise Percentage Distribution of Outstanding Credit ior Cultivator Household in Rural Area: West Bengal and India

West Bengal 19 71 1981 19 71

India 1981

--------------------------------------------------------------------------------------I. Productive Purposes 49.00 58.60 54.00 71.60 1. Capital Expenditure on Farm Business 28.50 3~.60 34. ?0 45.30 2. Current Expenditure on Farm Business 15.50 18.00 15.00 18.50 3 . Capital Expenditure on Non-Parm Business 3.10 3.80 3.20 6.30 4. Current Expenditure on Non-Farm Business I. 90 2.20 1.10 1.50

IT. Unproductive Purposes 51.00 41.4 0 46.00 28.4 0 ~ Hosehold Expenditure 44.90 34.60 37.80 20.00 .;,

6. Rapayment of Debt 0.90 0.00 1.50 0.80 • Expenditure on Litigation etc. 4. 90 6.50 6.40 7.40 ,, 8. Unspecified 0.30 0.30 0.30 0;20

-------------------------------------------------------------Total (Prod. t Unprod.) 100.00 100.00 100.00 100.00

Source: RBI: All India Rural Debt and Investment Survey, 19?1 and 1981

105

T A B L E - 2.6 Percentage Distribution of Outstanding Credit According to Security

for Cultivator Households in Rural Area for 1981: West Bengal and India

West Bengal India 1971 1981 1971 1981

Personal Guarantee Crops First. Charge on [amovable Property Mortgage on Immovable Property Bullions and Ornaments Others Total Security No Security

28.70 0. 70 7. 80

31. 70 2. ~0 L60

75.90 2~ .1 0

26.00 0.30 7. 60

45.90 5.90 2.80

88.50 22.50

50.70 2.10 uo

24.10 1. 30 3.20

88.80 1 I. 20

Source: RBI:All India Rural Debt and Investment Survey, 1971 and 1981. Clarification:

Personal Guarantee = Personal Security + Surety Security Others : Shares securities and insurance policies

.+Agricultural commodities +other aovable property +Hare than one security + Others.

106

3~ . 50 2.30

13.20 33.70 2.90 4.30

91.00 9.00

TABLE-2.7 ?ercentage Distribution of Outstanding Credit at Various Range of Interest

for Cultivator Households of Rural Areas.

------------1971 Nil 0 - 9 3/8 9 3/8 - 18 3/4 18 3/4 ~ 251

-----------------------------------W.Bengal

India

1981

~.Bengal

India

13.70 5.10

Nil

21.50 10.30

25.20 24.70

0 - lOX

8.20 8.60

19.90 26.60

lOX - 151

50.00 46.20

4.40 17.60

15% - 20X

5.40 13.90

Source: RBI: All India Rural Debt and Investment Survey, 1981.

107

25% l above

20.80 15.10

20X - above

14.90 21.00

; A B L E - 2.8 Asset-group wise Outstanding Credit at Various Interest Rate

for all Rural Households in 1981.

-----------------------------------------------------------------------------------------------------------------Nil 0 - 10% m - 151 15% - 20% 20% - above W.Bengal India W.Bengar India V.Bengal India W.Bengal India W.Bengal India

---------------------------Upto 1000 63.9 23 .I 9.3 1.9 2.9 13.5 0.0 3. 8 24.0 57.7 1000 - 5000 32.1 18.1 5.8 6.3 17.1 19.4 0.1 7.5 44.9 48.7 5000 - 10000 45.2 22.7 5.0 10.1 29.4 23.1 1.1 8.5 19.2 35.6 10000 - 20000 22.3 15. 2 1.2 9. 9 52.8 32.0 5. 6 10.2 18.1 32.7 20000 - 50000-- -- +7 .8 --i-1.3 11-.-7 -1-h-7- 47.9-- 37.-1---- 8.5 ---1-3.9 - --l-4;2 26.0 50000 - 1 lakh 21.8 12.0 II. l 8.8 49. 7 42.8 3. 6 14 .~ 13.9 22.0 l

1 lakh - 5 lakhs 14.7 7. 5 6.2 7.9 73.9 55.5 2.5 17.0 12.8 12.1 5 lakhs & above 0.0 4 . 4 0.0 3. 5 0.0 77.8 0.0 12.5 0.0 1.3

-----------------------------------------------------------------------------------------------------------------All Groups 21.5 11.2 8.0 8.9 50.8 44.6 5.0 13.6 14.7 21. 7

3ource: RBI: All India Rural Debt and Investment Survey, 1981.

108

. T A 8 L E- 2.5

3ize-Class wise Distribution of Short-Term! Medium and Long-Term loan during 'TE 1983 and 'TE 1991: West Bengal and India

SHORT TERK LOAN MEDIUM AND LONG TERM LOAM 'iE 1983 'TE 1991 'TE 1983 'TE 1991

W. Bengal India W. Bengal India W. Bengal India W. Bengal India

-----------------------------------------------------------------PACO Upto (Rs. lakh)

2.5 acre X of Ace

X of Allt

PACO 2.5 acre IRs. lakh)

to % of Ace 5 acre

5 acre and

above

Average for all size

classes

X of Alit

PACO (lis. lakhl X of Ace

X of A11t

PACO (Rs lakhl X oi Ace

X of A11t

0.01 0.02 0.02 0.04 0.03 0.03 0.04 0.05

62.30 49.40 65.40 45.00 49.60 5.83 65.70 41.20

45.70 34.00 59.20 33.80 23.90 13.40 26.80 17.70

0.01 0.20 0.02 0.05 0.04 0.04 0.06 0.08

29.10 25.50 26.60 31.50 34.40 36.50 24.50 30.20

25.30 24.40 26.00 30.40 24.60 14.40 14.00 19.00

0.06 0.04 0. 04 0. 0 7 0.19 0.14 0.60 0.21

7.50 25.10 8.00 23.50 16.00 57.70 9.90 28.50

29.00 41.60 14.80 35.90 51.50 72.10 59.20 63.40

0.02 0.02 0.02 0.05 0.06 0.01 0.10 0.12

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

----------------------------------------------------------------Source: RBI: Report on Currency and Finance, Various Issues.

109

T A 8 L E - 2.10 Districtwise Percentage Trend Growth Rate of Commercial Bank's Total Finance

Agriculture and Estimated Growth Rate of Agricultural Productiofi

-------------------------------------------------------------------------Annual Growth Saha-Swaminathan's Sen-Sengupta's rt oi Outstan Estimated Agricult Estitated Agricult

State -ding credit -ural Growth rate -ural Growth rate 1977-1993 1981-82 - 1990-91 1981-82 - 1991-92

----------------------------------------------------Bankura 20.10 9.50 t 01) 10.10 (01) Birbhu11 19.10 9.30 (02) 7.00 ( 04 I Burdvan 15.30 6. 4 0 (07) 6.20 (10 I Gooch Bihar H .90 5.20 (13) 4.60 ( 13) Oarjeeling 8.60 3.00 ( 14) 3.10 (H)

6 Hoogli 11.90 6.00 (09) 6.60 (08) Howrah 19.50 7.60 ( 06 I 8.50 (03) Jalpaiguri 5.80 2 . .10 ( 15) . 2.10 ( 15)

9 K1ddah 11.80 5 .'?0 ( 10) 6.30 (09) 10 Kidnapur 29.20 8.50 ( 03) 9.20 (02) 11 Kurshidabad 14.40 5.70 (11) 5.20 ( 11) 12 Nadia 12.50 7.60 (05) 6.80 (07) 13 Purulia 18.80 8.40 ( 041 7.10 (05) H 24 Pargana 19.30 6.10 ( 08) 1.00 (06) 15 West Dinajpur 20.40 5.50 ( 12) 5.00 (12)

--------

------------------------------------~---------------------------------------------------------~est Bengal 15.48 6.40 6.50

-----------------------------------------------------------------------------------------------India

~ank Correlation Coefficient

18.03 2.70

0.59 {2.218)**

0.69 {2.566)*

Source: 1. RBI: Banking Statistics - Basic Statistical Return, Various Issues. 2.Govt. of West Bengal: Sfatistical Abstract, West Bengal, 1918-1989 .

. 3.Saha and Swa•inathan (1994), 5.Sen and Sengupta (1995). Note: Figures in first bracket represent ranks.

Figures in second bracket represent Z statistic. t Significant at 991 level. ** Significant at 951 level. *** Significant at 901 level. t Not Significant.

110

T A B L E - 2.1: 0istrict wise Percentage Compound Annual Growth Rate of Number of of Account of Commercial Bank's Outstanding Credit to Agriculture and Percentage of Area Covered Under Land Reform($) to Net Sown Area

------------------------------------------------------------------------------------------]rowth Rate of No of Accouht of Commercial 3ank'5 Credit to Agriculture! 1977-1993

Percentage of Total Area Covered under Land Reiora to Net So11n Area. i992-9j

------------------------------------------------------------------------------------------Bankura 12.20 ( 07) 12.30 ( 12; . 2 Birbhua 16.80 i 02) 18.60 ( 05) 3 Burdwah 9.90 (11) IL 70 ( 07) 4 Coach-Bihar 10.50 ( 09l 21.20 (03)

Darjeeling 15.00 (on 13.10 (09) Hoogli 5.50 ( 14) 13.10 ( 10) Howrah H .50 ( 0 5) 12.90 (''' .Ill

Jalpaiguri 22.70 ! 01! 28.60 ( 01) Kaldah 14.40 ( 06! 23.70 ( 02)

iO Kidnapur 16.40 \ D 3) io .10 (06) 11 Kurshidabad 9.40 ( i 3 i 9. 80 (13) 12 Nadia 4.50 ( 15l 8.10 ( 15) 13 Purulia 10.40 (10) 9.20 (H) i4 24-Pargana 9.50 (12) 13.80 ( 08) 15 West Dinajpur 12.10 ( 08) 20.00 ( 04)

-------------------------------------------------------------West Bengal 11.40 15.50

India 11.00

------------------------------------------------------------------------------------------Rank Correlatiofi Coefficient

0.5E {2.16~}**

------------------------------------------------------------------------------------------Source: !.RBI: Banking Statistics·- Basic Statistical Return.

Various Issues. 2. Govt. of West Bengal: Econoaic Review, 1993-9C.

Jote: Figures in first bracket represent ranks. Figures in second bracket represent Z statistic.

1: Area Covered Under Land Reform: Total Area of Land Distributed ~ Total Area of Land Recorded Under Operation Barga.

* Significant at 99t level. ** Significant at 95X level. *** Significant at 90X level. + Not Significant.

Ill

:A B L E- 2.12 Districtwise Per Account Commercial Banks Outstanding Credit to Agriculture (PACOC)

and Per Capita State Domestic Product IPCSDPI Originated in Agriculture of Rural Areas at Constant (1980-81) Prices (Amount in Rs)

TE 1983 TE 1989 ?ACOC PCSDP PACOC PCSDP

! , Banku ra 5941.00 { 03) 608.00 ( 03) 1958.00 (13) 935.00 ( 04) 2. Birbhum 1269.00 ( 13' 689.00 (02) 2137.00 ( 12) 1062.00 (02) 3. Burdwan 2337.00 ( 0 7} 707.00 101) 3023.00 (07) 989.00 (03) 4. Coach-Bihar 936.00 (15) 236.00 (13) 1373.00 (15) 77.00 (15l 5. Darjeeling 7011.00 ( 01) 307.00 ( 121 3689.00 ( 06l 362.00 ( 13) 6, Hooghly 3057.00 (04) 4 04.00 (Ill 4479.00 ( 041 559.00 (10) 7. Howrah 2606.00 (05) 124.00 ( 15) 3951.00 ( 05l 200.00 ( 14l 8. Jalpaiguri . 7647.00 ( 02) HS.OO (08l 2635.00 ( 10) 525.00 ( 12) 9. Kaldah I 417.00 1111 ~82.00 ( 05) 2316.00 (Ill 633.00 (08) 10 Hidnapur 1652.00 (10) 429.00 ( 09l 4804.00 ( 03l 664.00 (06) ! I Murshidabad 2511.00 ( 06) 453.00 ( 06) 2729.00 (09) 535.00 (Ill 12 Nadia 1791.00 ( 09) 4 51 0 00 ( 0 7l 2920.00 (08) 616.00 ( 09) i3 Purulia .1025.00 ( 14l 428.00 (10) 1953.00 ( 14) 633.00 (07) 14 24 Pargana 2252.00 (08) 228.00 ( 14) 9760.00 (01) 1066.00 ( 0 I) 15 West Dinajpur 136~.00 (12) 490.00 (04) 5215.00 (02) 694.00 (05)

-------------------------------------------------------------------------liest Bengal 3050.00 433.00 4805.00 601.00

-----------------------------------------------------------------------------------------India I27H .00 1671.00 5800.00 19H .00

-----------------------------------------------------------------------------------------Rank Correlation -0 .II 0.20

{ -0.428}+ {0.748}+

-----------------------------------------------------------------------------------------Source: 1. RBI: Banking Statistics: Basic Statistical Return! Various Issues. 2. Govt. of West Bengal: Statistical Abstract! West Bengal, 1978-89.

Note: Figures in first bracket represent rank. Figures in second bracket represent Z statistic.

* Significant at 99~ level. u Significant at 95~ level.

*** Significant at 90~ level. + Not Significant.

112

T A B L E - 2.13 DISTRICT WISE PER HECTARE COMMERCIAL BANK CREDIT TO AGRICULTURE

AND AVERAGE RANK($) OF DEVELOPMENT (Aaount in Rs)

------ -----------------------------TE 197 3 TE 1983 TE 1993

CBPR AV. RANK CBPH AV. RANK CBPH AV. RANK

----------------------------------------------------------------------------------------------------------! • Banku ra 4.30 ( 131 7.50 421.60 (03) 8.30 423.50 ( 11) 8.50 2. Birbhum 8.80 ( 09) 6.30 144 .zo ( 11) 5.00 652.90 (08) L50 ' Burdwan 22.50 ( 05) 3.00 198.40 ( 08) 3.00 975.60 (06) 4. 00 J.

4 . Coach-Bihar 2.30 (Hl 13.00 124.70 ( 12) 11.75 278.50 ( 15 ) 10.30 5. Darjeeling 321.30 ( 01) 5. 50 441. 20 (02) 9.80 1791.20 ( 01) 9.00 6. Hooghly 33.20 ( 04) 1.80 474.30 ( 01) 2.80 1093.20 ( 03) 3.30 . Howrah 14 .• 00 (07) 4.00 220.20 ( 07) 4.80 1135.70 ( 02) 3.30 !.

8. Jalpaiguri 24 8. 80 (02) 9.30 393.70 ( 04) 8.00 1063.40 ( 04) 10.80 9 I Haldah 11.60 (08) 12.50 175.70 (09) 9.50 508.10 (09) 9.80 I 0. Hidnapur 8.00 (10 l 7.50 74.30 ( 14) 8.30 780.60 ( 07) 1. 80 ; !. Murshidabad 6.40 {12) 9.00 165.90 (10) 8.50 416.00 ( 12) 10.00 12. Nadia 18.60 (06! 7.50 233.80 ( 06) 9.30 504.90 ( 10) 8.80 ,, Purulia 5.80 ill) 11.50 61.50 ( 15) 11.30 3 4 8. 10 (13) 9. 80 J.),

14 24 Parganas 46.10 (03) 9.00 250.20 ( 05) 9. 75 982.40 (05) . 7. so ;5 ~est Dinajpur 0.80 ( 15) 13.50 85.80 ( i 3) 13.50 313.30 (H\ 13.50

------------------------------------------------------------------------------------------------------------lest Bengal 80.70 269.90 331.90

------------------------------------------------------------------------------------------------------------Lndia 25.00 307.10 1183.20

------------------------------------------------------------------------------------------------------------Rank Correlation· 0.63 0.5~ 0.68 Coefficient (2.365}* {2.024}** {2.528}*

Source: 1. RBI: Banking Statistics: Basic Statistical Return, Various Issues. 2. Govt. of West Bengal: Statistical Abstract, West Bengal, 1965-77 and 1978-89.

S Avrage rank is calculated by taking average of the ranks of four development indicators, per hectare consumption of fertiliser, per hectare area irrigated by govt. canal, percentage of electrified villages to total villages, percentage of literacy. (see 2.!3.Al

Nate: Figures in first bracket repre€ent rank. Figures in second bracket represent Z statistic. * Significant at 99X level. · ** Significant at 95~ level. *** Significant at 901 level. Not Significant.

: 113

T A R L ~- 2.13.l DISTRICTWISE DEVELOPKENT INDICATORS OF WEST BENGAL: 'TE I973. 'TE 1983, AND 'TE I993

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------TE I973 TE I983 TE 1993

Fertiliser ~ area ~ of ~ 0 f Fertiliser % area % of % 0 f Fertiliser ~ area ~ of l of Consu11ption under electried literacy Consumption under electried literacy Consu11ption under electried literacy (ton/hec) Govt. Canal villages ( ton/hec) Govt .. Canal villages (ton/heel Govt. Cart&.! villages

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------I Banku ra 15. 9 0 ( 6) 19.30 ( 4 ) 8.30 (I) 24 . 7 0 ( 9) 26.50 ( 12) 27.80 ( 3 ) 26.30 ( 13) 34.80 ( 5) 69.00 (13) 38.90 ( 2) 63.84 ( 13) 50.00 ( 6) 2 Birbhum i 9. 0 0 ( 5 ) 35.20 ( 2) I!. 4 0 (I 0) 24 . 80 ( 8) 4!. 00 ( 3) 35.80 ( 2) 65.00 ( 7) 32.30 ( 8) 11!. 90 ( 4 ) 36.70 ( 3) 99.30 ( 3) 46.60 ( 8) 3 Burdwan 21.00 ( 4 ) 47.80 (I) 31.60 ( 3) 2 9. 10 ( 4 ) 55.20 ( 2) 39.70 (I) 67.70 ( 5) 36.60 ( 4 ) 118.20 ( 3) 40.70 (1) 93.40 ( 8) 56.80 (4) 4 Coach Bihar 2.00 ( j 5) 0.10 ( 11) 5.90 ( 14 ) 19.30 ( 12) 17. 70 ( 15) 0.04 (II) 4 9. 4 0 ( 10) 27.30 (11) 69.00 ( 12) 0 .I 0 ( 12) 98.20 ( 7) 42.90 ( 10) 5 Darjeeling 35.50 ( 2) 2.30 ( 9) 26.70 ( 5) 25.70 ( 6) 28.20 ( 10) I. 4 0 (I 0) 40.10 ( 12) 34.40 ( 7) 89.70 ( 6) 0.30 (II) 76.80 ( 12) 49.20 ( 1) 6 Hoog ly 39.30 (l) 27.80 ( 3) 31.90 ( 2) 32.90 (I) 9 0 .I 0 (1) 2 I. 70 ( 4 ) 69.80 ( 4 ) 42.90 ( 2) 178.50 ( 2) 21.60 ( 4 ) 98.70 ( 5) 62.30 (2) 7 Howrah 22.20 ( 3 ) 3. 70 ( 7) 31.00 ( 4 ) 3I: 80 ( 2) 40.50 ( 4 ) 3.20 ( 8) 67.60 ( 6) 43.80 (1) 267.30 (1) 3.10 ( 8) 100.00 ( 1) 61.30 ( 3) 8 Jalpaiguri 3.00 ( 13) 2.50 ( 8) 23.50 ( 6) 20.80 ( 10) 31.60 ( 8) 1.50 ( 9) 75.70 ( 3) 25 .I 0 ( 12) 52.60 ( 15) 0.90 ( 10) 98.50 ( 6) 39.70 ( 12) 9 Maldah 7.20 (11) 0.00 ( 15) I4.70 ( 9) 15.40 ( 15) 31.30 ( 6) 0.00 ( 15) 79.90 (2) 21.10 ( 15) 91.60 ( 5) 0.00 ( 15) 98.80 ( 4) 32.60 ( 15)

10 Kidnapur 7.50 ( 10) 10.40 ( 5 J 6.50 ( 12) 31.30 ( 3) 27.20 (II) 10.80 ( 5) 26.00 (14) 41.30 ( 3) 72.90 ( 10 l 15' 10 ( 5) 47.30 (15) 68.30 (1) 11 Kurshidabad 8.00 ( 9) 7. 40 ( 6) 22.00 ( 1) 17.30 ( 14) 34.40 ( 7) 7.30 ( 6) 59.80 (8) 22.50 ( 13) 71.00 (1I) 6.70 ( 7) 92.40 ( 9) 35.50 ( 13) 12 Nadia 10.4 0 ( 7) 0.00 (15) 46.00 (I) 25.10 ( 7) 4 0.10 ( 5) 0.00 ( 15) 97.90 ( l) 30.4 0 ( 9) 79.60 ( 9) 0.00 (15) 99.90 (2) 4 6. I 0 ( 9) 13 Purulia 4.40 ( 12) 0.80 ( 10) 6.30 ( 13) 19. 6 0 (II) 20.00 ( 13) 4 . 70 ( 7) 24 . 20 ( 15) 27.30 ( 10) 81. 4 0 ( 8) 6.80 ( 6) 58' 4 0 ( 14) 40.30 (II) 14 24 Pargana 9.90 ( 8) 0.00 ( 15) 20.50 ( 8) 28.50 ( 5) 29.50 ( 9) 0.00 ( 15) 51. 4 0 ( 10) 34.70 ( 6) 84.50 ( 7) 2.40 ( 9) 85.70 ( 10) 52.70 ( 5) 15 West Dinajpur 2.20 ( 14 ) 0.02 (12) 2. 80' ( 15) 18.30 ( 13 ) 19.80 ( 14 ) 0.00 ( 15) 44.10 (11) 22.50 ( 14) 57.80 (14) 0.00 ( 15) 78.30 (11) 35.10 (14)

------------------------------·-------------------------------------------------------------------------------------------------------------------------------------------------------West Bengal I 0. 6 0 10.90 14.60 25.60 34.90 10.87 H.30 33.00 616.90 123.90 78.30 50.50

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------SOURCE: Govt. of West Bengal: Statistical Abstract, Various Issues.

NOTE: Figures in parentheses show ranks.

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