TCN special: Misra Commission report excerpts- Part 15

By TwoCircles.net news desk,

Misra Commission report excerpts - home page

Bank Credit toMinorities 

The scheduled Commercial banks, Regional Rural Banks sponsored by Publicsector banks, and Cooperative banks together provide rural credit delivery inthe country.  Reserve Bank of India has directed the Commercial banks toprovide loans to the priority sectors comprising agriculture and alliedactivities; small, tiny, cottage and village industries; rural artisans, smalltraders etc to the tune of 40 percent of their credit portfolio.  Thisincludes 18 percent of lending exclusively to agriculture and 10 percent toweaker sections of society.  Regional Rural Banks were set up to cater tothe needs of the poor in agriculture and micro-enterprises sector.  Today,rural and urban areas characterized by poverty are served by over 1.50 lakhretail credit outlets comprising over 92000 cooperative societies, more than12000 branches of Cooperative banks, and over 14000 branches of RRBs and 34000branches of Commercial banks. 

Besides, there are a few Financial Institutions (Development Banks) whichprovide long term capital for industries and agriculture.  The majorfinancial institutions are NABARD ( National Bank for Agriculture and RuralDevelopment) and SIDBI (Small Industries Development Bank of India),  which are playing animportant role in the development of agriculture, small scale industries nd therural sector as a whole. 

Though none of the Commercial banks, Regional Rural Banks, Cooperative banksor Financial Institutions have an scheme exclusively for minorities, theyparticipate in various poverty alleviation programmes of the Central and Stategovernments (Such as SGSY, SGRY, PMRY, PMGSY, IAY, SJSRY, DRI etc)  wheremembers of minority communities are being covered on the basis of prescribedeconomic criteria.  The government has been concerned about the low credittakeoff by minority community members.  Government has thereforeinstructed banks to ensure that the credit flow to minorities is extended inadequate measure, through various schemes and programmes.  With a view toensuring adequate credit flow to minorities, the RBI has issued guidelines toall the Commercial Banks.  The guidelines include the directive that smoothflow of bank credit through various government – sponsored schemes should beensured; a special cell should be set up in each bank for this purpose; and anofficer be posted in Lead Banks to exclusively look after credit flow tominorities and publicize various programmes among the minority communities ofthe area.  The half-yearly figures for credit flow to minorities are to besent to the RBI, and the progress of credit to minority communities is to beperiodically reviewed.  

The status of Credit Disbursement to Minorities in the 41 Minorityconcentrated districts, by the scheduled Commercial banks, shows and increasein the number of accounts from 1460349 in 2001 to 1479586 in 2005.  Thetotal increase in accounts in the five year period is 19237, showing a growthof 1.31 percent only.  On the other hand, the loans outstanding increasedsubstantially from Rs 265452.49 lakh to Rs 520141.24 during the same period,i.e. growth of 95.95 percent.  The growth rate of credit outflow issatisfactory, although it appears that a relatively few account holders arecornering a larger share of the credit.  This trend needs to be correctedto ensure flow of credit to the poorest among the socio-economically backwardminorities.  Details are given in the Table 7.9 

Table 7.9:  Credit Flow to Minorities in MCDs, byScheduled Commercial Banks 

   Source:  Rapid Assessmentof their Role of Financial Institutions for Upliftment of Minorities in theCountry, by Agricultural Finance Corporation   Ltd, Mumbai. 

Review of the State-wise Credit flow in the 41 Minority concentrateddistricts in 11 States indicates that while in Madhya Pradesh, growth rate is21.98 percent in number of accounts in 2004-05 over the previous year,Karnataka has a growth rate of 18.32 percent.  It is 10.06 percent in UP,8.38 percent in Gujarat, 6.55 percent inKerala but is negative in the other States.  With respect to the loansoutstanding for the financial year 2004-05, 10 States have registered goodgrowth over the previous year, ranging from 18-20 percent (in Andhra Pradesh )to 98.97 percent (in Madhya Pradesh).  Only the State of Rajasthan has fared badly, with a negativegrowth rate Details are given in the Table 7.10. 

Table 7.10: State-wise Credit Outflow in MinorityConcentration Districts

   (no. of accounts and amt in lakh rupees)

  Source:  Reserve Bank of India 

Analysis of details of credit flow in the minority concentrated districtsindicate that 1479586 accounts (25.6 percent) with Rs. 5201.41 crore (11.71percent) out of the total of 5782595 accounts with Rs.44417.22 croreoutstanding under priority sector advances ( as on 31 March 2005) belonged tominorities.  The community-wise share is as show in Table 7.11. 

Table 7.11:  Community-wise Outflow in MinorityConcentrated District

(in percent)

The Muslim population in these 41 districts is about 33.35 percent of thetotal population of these districts, so their share of bank accounts and creditshould be proportionately more than that which is at present.  In the caseof Sikhs and Buddhists too the share is less than their population i.e. 1.87percent and 0.77 percent respectively.  The small average amount per loanavailed by Muslims, Sikhs and Buddhists may be an indicator of their lowercredit absorption capacity which may be an indicator of their lower creditabsorption capacity which may be due to lack of knowledge of trades andactivities, entire perennial skills and difficulty in availing loans. Counseling,. Technical guidance and training need to be provided on a largescale… The average loan amounts are higher in the case of otherbeneficiaries. 

The details of number of accounts and amount outstanding community-wise inminority concentrated districts during 2001-2005 is given in the Table7.12.  As indicated in the Table, maximum number of accounts and amountsoutstanding going to Muslims, followed by Christians, Sikhs, Buddhists and parsis. 

Table 7.12: Percentageof No. of Accounts and Amount Outstanding Cumulatively in Respect of MinorityCommunities in the Minority Concentrated Districts during the Period 2001-05

Npte [ - ] negligible

Source:  Reserve Bank of India 

National Bank for Agriculture and RuralDevelopment 

National Bank for Agriculture and Rural Development (NABARD) was setup the Central Government as a developmental bank with the objective offacilitating credit flow to agriculture, rural industries and crafts, andpromote integrated rural development.  It has various programmes forupliftment of weaker sections of society comprising small and marginal farmers,STs and SCs and people living below the poverty line.  Members of minoritycommunities have benefited from NABARD’s different schemes aimed at economicdevelopment of the poor and marginalized people.  

Members of minority communities are active participants in large number ofself-help groups (SHGs) formed and functioning successfully in different partsof the country. 

Small Industrial Development Bank of India 

Small Industrial Development Bank of India (SIDBI) was established in 1990as the principal institution for financing and development of small-scaleindustry (SSI).  SIDBI has organized SHGs as a promising tool for jobcreation and income generation for the poor.  Any individual ororganization in the SSI sector, including minority community organizations, canobtain financial assistance for setting up new small scale units, and forexpansion, modernization and diversification.  

Rashtriya Mahila Kosh 

Rashtriya Mahila Kosh (RMK):  Set up in 1993 by the CentralGovernment, RMK promotes activities for provision of credit to women from poorhouseholds, as an instrument of socio-economic change, through a package offinancial and social developmental services.  RMK generates setting up andsustenance of income generating activities, assets creation, as well as tidingover contingent, social and consumption needs.  It works through a set ofMicro Finance Organisations at the intermediary level, and thrift and creditgroups of SHGs of borrowers at the grassroots level.  The assistance fromRMK is available to poor women irrespective of caste or religion. 

Social Justice 

Social justice measures for the weaker sections of society include legalmeasures that ensure protection of civil rights and curb socialdiscrimination.  The Protection of Civil Rights (PCR) Act, 1955, andthe SC and ST Prevention of Atrocities (POA) Act, 1989 are two importantpieces of legislation that address the problems of social discrimination,untouchability and of exploitation and atrocities against disadvantagedgroups. 

Strengthening grassroot democratic institutions:  Strengtheningof Panchayati Raj Institutions and Gram Sabhas as per the provisions of 73^rdand 74^th Constitutional Amendments is a measure of far-reachingconsequences for decentralization of governance.  Through these measures,the participation of disadvantaged groups including women, in theseinstitutions of grassroots planning and governance is ensured.  The powersof the local bodies have also been enhanced.  Through increasedparticipation in these local bodies, the interests and concerns of the weakersections are receiving greater attention. 

Steps are afoot for the effective implementation and monitoring of the 20-PointProgramme for ensuring social justice to SCs and the 15-Point Programme forprotection and development of minorities.  This includes implementation ofthe three-pronged strategy of ‘Awareness Generation’ By (i) changing thegeneral mind-set and attitudes towards the weaker sections, (ii)conscientisation of the Target Groups to make them conscious of their ownrights, privileges and governmental support available for them, emphasizing aparticipator approach and (iii) sensitizing both officials and non-officialswith special training programmes so that they can work with the rightprespective to meet the special needs of the minority groups. 

In addition, existing Commissions for Scheduled Castes, Scheduled Tribes,Other Backward Castes, Minorities, and Safai Karamcharis are taking steps tosafeguard the rights and interests of these groups and ensure social justice tothem as under: 

i)   National Commission for SCs: Consequent upon 89^th Constitution (Amendment)_ Act, 2003, theNational Commission for SCs & STs was bifurcated and the NationalCommission for SCs re-constituted in February 2004.  The Commission is ahigh level independent constitutional body to monitor the safeguards providedfor SCs.  It has wide powers to protect, safeguard and promote theinterests of SCs, and has been conferred powers of civil court to try a suitand summon and enforce attendance of any person from any part of Indiaand examine him/her on oath.  Reports of the Commission along with ActionTaken Report are required to be tabled in Parliament. 

ii)  National Commission for ScheduledTribes:  Consequent on the bifurcation of National Commission forScheduled Castes/Scheduled Tribes, National Commission for Scheduled Tribes wasconstituted in February, 2004.  It is also a high level constitutionalbody to monitor the safeguards provided for Scheduled Tribes and has widepowers to protect, safeguard and promote the interest of ScheduledTribes.  Reports of the Commission along with Action Taken Report arerequired to be tabled in Parliament. 

iii) National Commission for Safai Karamcharis: The National Commission for Safai Karamcharis was set up under the provisionsof National Commission for Safi Karamcharis Act, 1993 to promote and safeguardthe interests and rights of safai karamcharis.  The Commission has beenempowered to investigate specific grievances as well as matters relating toimplementation of programmes and schemes for welfare of safaikaramcharis.  Reports of the Commission along with Action Taken Report arerequired to be laid on the table of the Parliament.  

iv)  National Commission for Backward Classes( NCBC) NCBC was set up in 1993 as a permanent body for entertaining requestsfrom castes / Communities for inclusion /exclusion in the Central List of OBCsfor each State / UT and complaints of over-inclusion and under-inclusion in theList of OBCs, examining them and advising the Govt. of India.  As per the provisionof the Act, the advice issued by the Commission shall ordinarily be bindingupon the Government. 

v) The National Commission for Minorities (NCM) setup in 1978 aims to protect the interests of minorities.  As stated in theMinistry of Home Affairs Resolution dated 12.1.1978: “despite the safeguardsprovided in the Constitution and the laws in force, there persists among theMinorities a feeling of inequality and discrimination.  In order topreserve secular traditions and to promote national integration the GOIattaches the highest importance to the enforcement of the safeguards providedfor the minorities and is of the firm view that effective institutionalarrangements are urgently required for the enforcement and implementation ofall the safeguards provided for the minorities in the Constitution, in theCentral and State laws and in the Government policies and administrativeschemes enunciated from time to time”.  The NCM is responsible to evaluatethe progress of development of minorities, make recommendations for protectionof the interests of minorities, examine specific complaints regardingdeprivation of rights of the minorities and take up such matters with theappropriate authorities.  The NCM has devised its own procedure to dealwith the grievances of minority communities.  The Commission’s reports aresubmitted to Parliament along with an Action Taken Report.  

Efforts for Communal Harmony:  National Commission for Minorities hasalso from time to time taken up the cause of sensitizing the defense and policeservices personnel to issues affecting maintenance of peace within thecommunities.  This relates to prevention and handling of riots, and alsothe capacity to understand and appreciate others’ points of view.  Suchsensitization programmes have been organized at national PoliceAcademy, College of Air Warfareand at State levels.  Joint peace committees in the mohallas and holdingof meeting with community leaders, is very important and makes a differencewhen the atmosphere is otherwise vitiated by communal tension/riots.  Allpossible steps need to be taken to instill confidence and a feeling of securityin minority communities, particularly in areas of tension or violence. 

To sum up, while the government is taking a very wide range of measures forthe welfare and development of weaker sections of society, their empowermentthrough education and economic development should get priority.  The TenthPlan indicated, however, that as a result of developmental programmes andschemes, the ratio of SCs and of STs below poverty line has beendecreasing.  As corresponding information on poverty levels for allreligions is not available,  the current estimates of poverty heads countbased on 61^st Survey Report of NSSO do not give a very heartening pictureof the Muslim community. 

Most recent estimates place all India Poverty Head count at 22.7 percentbased on 365 recall period 2004-05.  In absolute numbers, this amounts toover to 251 million people spread cross India.  SCs/STs together arethe most poor with a Head Count Ratio (HCR) of 35 percent followed by theMuslims who record the second highest incidence of poverty with 31 percentpeople below the poverty line.  Incidence of poverty among Muslims inurban areas is the highest with HCR of 38.4 percent.  The Hindu (general)is the least poor category with an HCR of only 8.7 percent and the OBCs are atintermediary level HCR of 21 percent closed to the all India average. 

Muslims (Ashrafs) have benefited form the general schemes available for allsections of society, the Non Ashrafs, both Ajlafs and Arzals are bracketedtogether under the OBC category.  Ajlafs comprise of such occupationalgroups as carpenters, artisans, painters, grazers, tanners, milkmen etc andArzals, lowliest among Muslims, consist of Halakhor, Lalbegi, Abdal andBediya.