Aadhaar Number in India

The Possibilities of Aadhaar Number

The Aadhaar number is a powerful tool as governments move to more individual-oriented programs. It is an identification infrastructure available to every resident in India, including infants

Economic growth is not an end in itself; its power lies in the ability it gives us, the financial wherewithal to address the many problems that a developing country faces. Governments in India have accordingly, with economic growth, implemented new social programs and safety nets that tackle our poverty, health and education challenges. The ambitions of these programs however, have been marred by challenges in execution, and a significant one has been the lack of clear identification and targeting of individual beneficiaries.

The problems of identification bog down millions of people in India across communities and in different situations. Rural women for example, face difficulties in accessing social benefits and employment, especially if they are not part of a household; most benefits and programs, as well as identity mechanisms are linked to households, and single women or widows are excluded as a result. Backward communities and tribal groups similarly find themselves caught in a cycle of exclusion, where the lack of one service cuts off identification documents and consequently access to other services, such as when the inability to get a ration card also means difficulty in opening a bank account.

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Financing Agriculture : Some Issues (India)

Financing Agriculture : Some Issues (India)
 

Small and marginal farmers should be helped to liberate themselves from the stranglehold of moneylender and should be given priority for accessing low cost credit.

Post 1990 India has emerged as one of the world’s fastest growing economies. Its GDP growth rate of about 9% in the last few years is historically unparalleled except by our neighbour China. With rapid economic and social growth, however, new challenges emerge as also new growth strategies. For sustainable economic development, the crucial agricultural sector has to grow at a consistent 4% growth rate to GDP. Given the fact that 60% of our farming is monsoon dependent, ensuring consistent growth in food production is a major challenge, especially in wake of global warming and consequent climatic changes.

Credit has a very important role to play in supporting agricultural production and investment activities. The total credit flow to agriculture during the 10th Five Year Plan was expected to grow at a compound annual growth rate (CAGR) of 26.38%, as against the CAGR of 18.63% achieved during the 9th Five Year Plan. However, although the total agricultural credit has increased during the last six years, there are serious quantitative as well as qualitative concerns. The poor outreach of the formal institutional credit structure is a serious issue that needs to be corrected expeditiously. The findings of the National Sample Survey Organisation (NSSO) 59th Round (2003), reveal that only 27% of the total number of cultivator households received credit from formal sources while 22% received credit from informal sources. The remaining households, comprising mainly small and marginal farmers, had no credit outstanding. Comprehensive measures aimed at financial inclusion in terms of innovative products and services to increase access to financial services and institutional credit, are required. Other issues such as ensuring credit flow to tenant farmers, oral lessees and women cultivators, complex documentation processes, high transaction costs, lack of availability of quality inputs across all regions, inadequate and ineffective risk mitigation arrangements, poor extension services, weak marketing links and sectoral and regional issues in credit are also required to be addressed expeditiously. The lack of rural credit bureaus also delays the process of sanction of agricultural loans as there is need to reduce loan risk and documentation procedures.

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