Kolkata, July 30
The latest report by a credible bankers' body, on Wednesday, identified the pathetic state of institutional financial inclusion among people residing in rural West Bengal.
The poor show is in terms of both deposits mobilised and loans disbursed by the rural branches operating from the rural belts in the state.
The pathetic picture on this count was revealed in the latest report of the State Level Bankers' Committee (SLBC) in West Bengal having representations from both the different banks operating in the state as well as from the West Bengal government.
As per the report, while the average savings deposit rate per individual per month in rural West Bengal currently stands at just Rs 279, the loan rate per person there is just Rs 19.
Economists say that while the low average savings deposit rate per individual per month indicates the lack of adequate disposable income among the people in rural West Bengal to park in savings, the low rate of loans per person indicates their lack of financial credibility to avail of institutional borrowing.
At the same time, economists say, the two figures also indicate the pathetic credit to deposit (CD) ratio in the state, a factor where West Bengal had been traditionally much behind the national average.
The CD ratio for any state is determined on the basis of the total deposit accumulation figure in the state being divided by the total loans disbursed figure during a particular financial year.
Economists say that the low disposable income affecting regular and reasonable savings is an indication of the lack of adequate employment or income-generation avenues in rural West Bengal and is also an indication of the predominant and over-excessive dependence on farming, which is no longer profitable considering the extremely fragmented land-holding nature in the state.
At the same time, economists say, the self-help group (SHGs) model, which provides avenues for alternative incomes in rural India other than farming, also seems to be lacking successful implementation in rural West Bengal.
SHGs not only provide adequate disposable income to people associated with them to park in savings, but also push up the CD ratio, considering that the SHG sector is a major component in institutional loans.
Finally, economists say, the long stagnant rate of wages in the unorganised sector in rural West Bengal is yet another factor adversely affecting the institutional financial inclusion there.
— IANS
Reader Comments
As someone from rural Bengal, I can confirm the situation is worse than reported. Most villagers still prefer local money lenders over banks due to complicated procedures. Banks need to simplify their processes and increase awareness campaigns.
The ₹19 loan per person statistic is heartbreaking 💔 How can anyone start any business with that amount? This shows why so many migrate to cities for work. We need urgent policy interventions!
While the report highlights genuine issues, I wish it had also compared Bengal's performance with other states. Is this problem unique to Bengal or common across eastern India? More context would help understand the bigger picture.
The land fragmentation issue is real! My family in Murshidabad struggles with tiny plots that barely yield anything. Government should promote cooperative farming and better market linkages for small farmers.
As an economist working in India, I'm surprised by these numbers. The Jan Dhan scheme showed promise - what happened to those accounts? Are people opening accounts but not using them? Need deeper analysis.
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