The Government's (of India - GOI) push to the banking sector to step onto the rural streets is an old effort renewed yet again. Years ago there was a thrust to the banking industry to concentrate more on rural folks, advancing agricultural investments, that has gone bust. We see, specially during the election years, that those advances are waived off. For example, in Karnataka, there are several banking institutions that are only concentrated on rural banking and a few of them are focusing only on agricultural sector, which don't thrive because of political interventions. In fact, the management itself comprises more of politicians and bureaucrats than banking professionals, which defeats the effort in the first step.
There have been micro-finance institutions that advance small loans to the needy, specially the farmers, which may thrive, as recovery could be easier - only, larger effort go into making it a success. Talking of banking in general, today we see a number of rural branches and ATMs in the rural areas that cater to the day-to-day needs of the rural folks as far as general banking transactions are concerned.
This seems to put to action the direct cash transfer scheme of the GOI that it brought out a few days ago. One, this will bypass bureaucracy and corruption at that level, but how far encashing subsidies and paying out to the beneficiaries' accounts directly help the beneficiaries themselves? Will such moneys be put to good use at all? Instead, can't the GOI think of ways of encashing the subsidies in other forms, for example, by crediting the loans so that that burden is lessened, and subsidies made good use of? Actually, the GOI may be talking of over 3 trillion INR, including subsidies, pension, scholarships, etc. And what are the numbers that they're talking of? Over 75 million accounts!
The challenge lies in first drawing up the roadmap for the fund transfer, then modes of payment - that is, if by cash or adjustments, and prudent utilisation of the funds by the beneficiaries. Add to that, there is a question of technology reaching the last mile - has it been made available, and if yes, how has it been taken by the uneducated and under-educated rural people? At least, they can be convinced that technology is not as bad as men manning it!
There have been micro-finance institutions that advance small loans to the needy, specially the farmers, which may thrive, as recovery could be easier - only, larger effort go into making it a success. Talking of banking in general, today we see a number of rural branches and ATMs in the rural areas that cater to the day-to-day needs of the rural folks as far as general banking transactions are concerned.
This seems to put to action the direct cash transfer scheme of the GOI that it brought out a few days ago. One, this will bypass bureaucracy and corruption at that level, but how far encashing subsidies and paying out to the beneficiaries' accounts directly help the beneficiaries themselves? Will such moneys be put to good use at all? Instead, can't the GOI think of ways of encashing the subsidies in other forms, for example, by crediting the loans so that that burden is lessened, and subsidies made good use of? Actually, the GOI may be talking of over 3 trillion INR, including subsidies, pension, scholarships, etc. And what are the numbers that they're talking of? Over 75 million accounts!
The challenge lies in first drawing up the roadmap for the fund transfer, then modes of payment - that is, if by cash or adjustments, and prudent utilisation of the funds by the beneficiaries. Add to that, there is a question of technology reaching the last mile - has it been made available, and if yes, how has it been taken by the uneducated and under-educated rural people? At least, they can be convinced that technology is not as bad as men manning it!
