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states, ranging from 59 per cent to 82 per cent amongst cultivators, from 60
per cent to 72 per cent amongst households engaged in farming other than
cultivation and from 57 per cent to 93 per cent for households engaged in other
agricultural activities.
RFAS 2003 Results
The results of RFAS 2003 are not comparable as the survey covered
only two states. However, the results reported provide a telling commentary on
the state of access to institutional finance for the vast rural masses. The results
are best quoted in the words of Priya Basu (2005, p.4009) who is the author of
the World Bank-NCAER study:
“Notwithstanding the progress made over the decades, the majority of
the rural population still does not appear to have access to finance from
a formal source. According to the RFAS 2003, some 59 per cent of
rural households do not have a deposit account and 79 per cent of
rural households have no access to credit from a formal source. The
problem of access is even more severe for poorer households in rural
areas. Indeed, bank branches in rural areas appear to serve primarily
the needs of richer borrowers: some 66 per cent of large farmers have
a deposit account; 44 per cent have access to credit. Meanwhile, 70 per
cent of marginal farmers do not have a bank account and 87 per cent
have no access to credit from a formal source. Another segment that
faces serious problems in accessing formal finance is the commercial
household (i e, micro-enterprise) segment” (
EPW
, September 10, 2005)
There are interesting revelations from Priya Basu study:
“A recent World Bank/NCAER survey shows that only 24 per cent of the
Andhra Pradesh and 19 per cent of the Uttar Pradesh households had
access to formal credits, while 56 and 51 per cent of the households in
two states respectively depended on private credit. The proportions of
small and marginal farmers accessing formal credit were lower than
those in the medium and large category in both the states. Thus access
to formal credit was poor and skewed in favour of the larger holdings.
Current guidelines provide 10 per cent of the net bank credit for the
weaker sections comprising small and marginal farmers, landless
labourers, artisans etc. Public sector banks had extended only 6.8 per
cent of their credit to these weaker sections as of 2003. The number of
weaker section borrowers fell from 1.76 crore in 2000 to 1.43 crore in
2003” (as summarised in Vyas Committee Report of June 2004).
