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RURAL IMMERSION PROGRAMME

Back to Office Report (BTOR)

BY

ANAND ATIREK (AM, NABARD HO)

HARSHIT KHANDELWAL (AM, BHOPAL RO)

TATYASAHEB N MARKEL (AM, RAIPUR RO)

UDAY KUMAR (AM, NABARD HO)

UDIP KUMAR BURMA (AM, NABARD HO)

VIJAY NEEHAR (AM, BHOPAL RO)

Host Organisation

RAIGARH SAHYOG SAMITI (RSS), RAIGARH, CHATTISGARH

06 JUNE 02 JULY, 2016

NATIONAL BANK FOR AGRICULTURE AND RURAL


DEVELOPMENT

Module I
Q. 1 Various Stakeholders in Rural Development
1. Citizens
2. Administrative Department: Revenue unit (Patwari, Amin, Tehsildar, Asst
Collector and Collector), Panchayti Raj Institution (Zila Panchayat, Panchayat
Samiti, Gram Panchayat)
3. Medical: Mitanin (ASHA), Primary Health Centre(PHC), Community Health
Centre (CHC)
4. Education: Aanganbari, Primary and Secondary Schools
5. Financial Institutions: Primary Agriculture Cooperative Society, Regional Rural
Banks, Chit Fund Companies, Post Offices, Banking Correspondents
6. Other Agencies: NGO, Mandis and Haats, Krishi Vikas Kendra, Police, Informal
Associations such as Farmers Club, Farmer Producer Organizations, Self Help
Groups, Satsang Mandlis etc.

Description of various activities seen in the villages of Raigarh District,


Chattisgarh:

S.No Program/ Description Importance


Activity
1 Mitanin Health It was an inspiration for the Lesser IMR,MMR and other
Worker concept of community diseases
health worker ASHA.
2 Pradhan Mantri Connectivity of villages with Better connectivity and
Gram Sadak state roads accessibility in remote areas
Yojana
3 Mukhyamantri Connectivity within villages Better connectivity within
Gram Sadak villages
Yojana
4 Solar Pump Set Use of solar energy to dig Successful for the remote
out water areas where electricity is not
available
5 Wadi Horticulture Plantation in 1 Increased the income levels
Acre of land of farmers
6 Watershed Collect the rain water where Increased greenery and
it drops water retention capacity of
the soil
7 Kosa Development of kosa silk as Boost for local small scale
Development region is ideal for growth of industry
Centre Kosa Silk.
8 Forest Produce Tribal wealth of forest Score of creating Forest
produce collection could be Producing Organisation on
seen in form of Mahua & lines of Farmer Producer

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chironji Organisation can be worked
out in tribal districts
9 Self Help Informal group of women Important to bring out
Groups for inducing habits of leadership skills in rural
lending and credit. women and generate a
source of livelihood for
them
10 Farmer Producer Registered group of farmers Helpful in collective
Organization for collective farming bargaining at the marketing
practices as well as purchase time.
11 Agriculture Majority of the people were Coverage of KCC was very
engaged in agriculture. limited. Few reasons can be
Tomato and Paddy limited reach of PACS,
cultivation were dominant Banks and lack of proper
land documentation
12 Chit fund Good network of various Providing doorstep delivery
Companies chit fund companies till the of loan but at a very high
farthest villages interest rate
13 Aanganbari All facilities for rural kids Important for rural women
Kendra like a modern urban crche as they can work freely in
fields and children can get
nutritious food
14 Community Hall Bricked hall for occasional Community gathering can
public events be seen in weekly Satsang
program to unite the village
community
15 Toilets Toilets were created under Although very less number
Swachcha Bharat Abhiyan. of people were using toilets
but still a good initiative.

Q. 2 Soil pattern, agriculture, crops, fertilizer, livestock, farming tools, agronomy


pattern and marketing infrastructure available in Raigarh.

Raigarh is one of the most important potential district of Chhattisgarh in terms of area,
production and productivity of different crops. Raigarh comes under Chhattisgarh plane
region of the state. . Total geographical area of district is 504060 ha. Total cultivated land
comes under Raigarh district is 3, 17,748 ha. Nearly 21 % area comes under irrigated
condition during rabi season, which is very low to achieve appropriate cropping intensity.
During kharif season rice monocrop is dominant, however more than 16 % cultivated
area comes under upland in which economical oilseed and pulse crop was taken as
compared to uneconomical rice crop. Number of marginal farmer family (88405) is

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higher than large (47494) and small (35822) farmers. Total farmers family in this district
is 171721. Raigarh district is comprised of 9 blocks namely Pussore, Baramkela,
Kharasiya, Raigarh, Dharamjaygarh, Saranggarg, Gharghoda, Tamnar, and Lailunga.
Average rainfall of the district is 1200 mm per annum.

Agriculture in Raigarh district:

Farmers of Raigarh cultivate mostly paddy in kharif season with an intention to


grow summer paddy too, whenever irrigation sources are available. As a second crop
after paddy, majority of farmers prefer to grow gram, mustard, linseed, lathy which
provide less profit as compared to horticulture crops i.e. vegetables, flowers, medicinal
and aromatic plants. Rainfed cultivation and low productivity of rice (around 1.5 t/ha)
along with recurring drought condition lead to large-scale migration of landless laborers
and also marginal farmers. Such a trend can be reversed and the socio-economic
conditions of the farmers as also the nutritional levels of the general population can be
improved only with proper development of horticulture in this new state. About 20% soil
of the cultivated area in the region is red-laterite (Bhata) soil, which is mostly unutilized
for growing any crop. These Bhata soil can be better utilized to grow fruit crops under
rain fed/dry land horticulture.

SR.NO POPULATION NUMBER


.
1 Families involved in agriculture 188942
2 SC 28580
3 ST 65966
4 Others 94396

Agricultural Land use Area (000 ha)


Source: 1 Net sown area 269.312 Agricultural
Statistics, 2013, 2 Area sown more than once 30.543 Commissioner
of land records, 3 Gross cropped area 299.855 Govt. of
Chhattisgarh 4 Cropping Intensity (in %) 111
Irrigation Area (000 ha)
Soil: 1 Net irrigated area 61.643
2 Gross irrigated area 68.246
The type of soil 3 Rainfed area 231.609 pattern in
Raigarh is Entisol 36 per cent, Alfisol 21 per cent, Incephsol 22 per cent, Vertisol 18 per
cent, Alluvial 3 per cent (locally known as Bhatta, Matasi, Dorsa, Kanhar, kachhar
respectively) and the net irrigation potential of the district is around 40 per cent.

Krishi Vigyan Kendra is actively pursuing this Soil health card scheme and raising
awareness in the fields. The Extension officers are also doing the on the field
demonstration in rural areas so as to popularise the deficiency of Soil and promotion of
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required nutrients in the field. They are also actively focussing on the propagation of
organic manure like vermi composting.

Irrigation Structures:

In Raigarh, Chhattisgarh, rice, the main crop, is grown on about 77% of the net sown
area. Only about 20% of the area is under irrigation; the rest depends on rain. The
irrigated area available for double cropping is very minimal in Chhattisgarh plains. Due
to this, the productivity of rice and other crops is low, hence the farmers are unable to
obtain economic benefits from agriculture and it has remained as subsistence agriculture
till now, though agriculture is the main occupation of more than 80% of the population

Chhattisgarh has a limited irrigation system, with dams and canals on some rivers.
Average rainfall in the state is around 1400 mm and the entire state falls under the rice
agroclimatic zone. Large variation in the yearly rainfall directly affects the production of

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rice. Irrigation is the prime need of the state for its overall development and therefore the
state government has given top priority to development of irrigation.

Weather reporting in Krishi Vigyan Kendra at Raigarh

Crops:

Year 2013 Major crops Area Production Productivity


(In000 (In MT) (In Kg / ha)
ha)
1 Cereals Paddy rice, Jwar, Kodo- 229.95 345.46 1502
kutki, Maize
2 Pulses Arhar, moong, Urd, Kulthi 25.09 7.39 295
and other pulse
3 Oilseed Ground nut, Soybean, 8.76 7.13 814
Sunflower, Til, Niga
4 Other crops Vegetables and other crops

Cropping Pattern:

In this region people prefer horticulture crops like Cashew nuts and mango, pears and
Nashpati etc. And in the kharif season they invariably do the cultivation of paddy

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because of weather conditions and higher assured returns. Horticulture department
implements comprehensive agriculture development program in this district.

Inter Cropping & Cropping Intensity:

Farmers are motivated to use traditional old techniques for production of crops. Use of
vermi compost is improving soil health and increasing production. Fellow land being
brought under cultivation. Support to Ecosystem through plantation.

Farmers fetched good prices from spices production & now inclined to grow these crops
in larger area at their own cost. Banana is exported to the other states from Chhattisgarh.
Chili is exported to the adjoining states from Chhattisgarh. Brinjal, chillies and
cauliflower and flowers are being grown under the shade of Mango and Cashew trees
under Wadi Development programme by many farmers in Chhattisgarh.

Agronomic Practices:

Raigarh is primarily a tribal farmers district. Here. Majorly, mono-crop practice being
undertaken by tribal farmers. Their major staple food is also rice. For 3-4 months during
March to June, they depend on agri-forest products like Mahua, Tendua and other
commercial forest products. Various agronomic practices being followed in this area are
like SRI. Some farmers are practising SRI (System of Rice Intensification), but is very
labour intensive and hence large farmers are not interested in taking up this SRI. New
innovative methods of paddy seedling plantation with the modern farming tools are being
practised.

Manures and Fertilisers:

In Chattisgarh state, farmers use Urea, Super Phosphate, DAP, Potash, Gromor,
Ammonium Sulphate, Cane and others during various crops of Kharif and Rabi season.
Of late, there a new addition to this list, is the Neem coated Urea, which is very popular
in Raigarh and across other districts of Chhattisgarh.

Apart from this, people are promoting Organic manure as well from cow dung, weeds,
plant wastes and other degradable farm wastes. Vermi-compost pit is also used to a great
extent.

Livestock & Agri-allied activities:

In Raigarh, different varieties of Buffalo, Goat, Sheep , pig and Poultry are there. Visits to
animal Husbandry department, it has been reported that there is a Mass immunization in
backyard poultry, small ruminants and cattle. Organization of Veterinary.
Health/Infertility camps and extension activities are pro-active in furtherance of their said

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objective. Intensive rural health care service delivery is also to a great extent helping the
major livestock community in the district.

Farming tools:

Farmers are using improved varieties of farming implements like Crono weeder in SRI
practices. Rota Wheater, seedlings plantation tool and other new farm practices
implements are being used. We saw the demonstration of many farm implements in
Krishi Vigyan Kendra, Raigarh especially for farm practices like field preparation, filed
muddling, drip irrigation methods, sprinkler, tractor varieties for ploughing, levelling,
weeding, seeds spraying, Seedling plantation in the fields. We learnt also the Harvest
methods like use of machines in harvesting of crops. Presently, farmers are simply cutting
the seeds from the top with the help of harvestor and leaving the straw in the fields. After
collecting seeds, they burn the straw in the fields. But this practice is harming the
biodiversity loss like death of micro-organisms important for maintenance of soil health.
However, Punjab has produced such a kind of harvestor, which may be a solution for this
major concern. It is yet to be popularised across the states of India.

Marketing arrangements:

o Development of
Fruit and Vegetable
Market Yards
markets (including
Raigarh) viz
Raipur, Bilaspur,
Raigarh, Durg,
Rajnandgaon &
Pakhanjur have
been under taken in first phase with total financial outlay of Rs. 64.28 crore are
under scheme "Development/ Strengthening of Agricultural Marketing
Infrastructure, Grading and Standardization" of G.O.I., out of which 3 markets are
in final stages.
o Marked improvement and development of infrastructures in Hatt Bazars and 14
sub market yards of Tribal talukas of Raigarh under RKVY
o For improvement of quality of Agri produce 3 Grading Machine have been
established in identified market yards with R.K.V.Y. and own resources of State
Marketing Board as per information provided by Krishi Vigyan Kendra, Raigarh.
o There needs to go for expansion of Storage capacity as well in the district. Under
Horticulture Mission, 2 storage houses have been sanctioned and built.

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o Visit to the APMC and through interaction with the secretary, APMC, we came to
know that the old traditional tripod type weigh bridges existing in A.P.M.Cs have
been replaced by the Electronic weighing machines so as to reduce the faulty
weighing and adulteration.
o Improvement of information facilities by providing Electronic Display Boards in
market yards linked with all important markets of India for depicting the
prevailing market rates as per the promises of National Agriculture Market
(NAM). This Raigarh has done the necessary preparedness in being linked to Nam
in coming days.
o In Kudumkela village of Dharamjaigarh block, CGM, NABARD has inaugurated
one village haat bazzar for the tribal residents of that area. This Haat was
financially supported by NABARD. There needs such establishment and
development of Modern Hatt Bazar in tribal area on a greater scale.
o PACS have been purchasing the rice from tribals under Government MSP. Many
crops under MSP are being purchased from PACS in Raigarh. However, it needs
to improve the facilities in procurement centres of primary co-operative societies.
o There needs to establish the value upgradation infrastructure for forest produces.

Module II
Q. 1 Have the financial intermediaries succeeded in taking forward the planning
process envisaged by the State authorities?

The institutional structure of rural financial intermediaries consists of several institutions,


namely, commercial banks, regional rural banks (RRBs), cooperatives and land
development banks. The aim of the rural credit agencies is to dispense adequate credit at
cheaper rates. Recently, Self-Help Groups (SHGs) have emerged to fill the gap in the
normal credit system because the formal credit delivery mechanism has not only proven
inadequate but also has not been fully integrated in the overall rural social and
community development as envisaged by the State authorities. Although the post-
nationalisation period in the Indian banking yielded significant changes in the operational
policies and practices of the formal financial intermediaries in the rural areas, yet, it
failed to make a significant dent in the age-old attitude of the rural bankers towards

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financing the so-called less creditworthy but productive small and marginal farmers.
Financial Intermediaries credit is not benefitting farmers enough.

Large numbers of people in rural India are still dependent on money lenders to meet their
short and long term credit needs. The increasing fragmentation and marginalization of
agricultural land is making farming an unviable activity. With the steadily rising cost of
cultivation and low agricultural yields, large numbers of farmers face challenges due to
the resulting high level of indebtedness. The unavailability of credit when most needed
and the unfriendly atmosphere are the two most critical reasons why farmers often avoid
going to the banks. The plight of tenant farmers ineligibility to take farm credit through
KCC most often worsens the inadequate and uneven credit structure through financial
intermediaries.

In order to understand the loaning pattern for farmers and banking in rural areas, loan
subsidies, financial literacy, financial inclusion, service to rural areas, Micro finance
through Mudra loan, group loans, JLG etc., we interacted with Shri Vishnu Prasad
Agrawal (Branch manager, RRB, Dharamjaigarh), Shri Alok Bara (Branch manager,
PNB, Dharamjaigarh), Shri BasantSahu (Rural Agriculture section, HDFC Bank), Shri
Anil Kumar (Loan and Subsidy, HDFC Bank) and Shri Lanesh Jaiswal (Microfinance,
HDFC Bank). The terms and mindset of banking with rural consumers are different for
all banks. HDFC Bank is eyeing on the business and tapping on the large and medium
farmers through JLGs following a strict mode of repayment enforcement. RRBs and PNB
are having shortage of staffs in bank branches. A large number of farmers are not getting
KCC credit in Kudumkela village of Dharmjaigarh block of Raigarh district. Bankers are
citing the reasons of a good number of KCC accounts turning into NPAs. Comparing the
statistics of the total number farming households in Kudumkela village with the number
of issuance of KCC by RRB-Dharamjaigarh till now comes a meagre 23% coverage. This
gap of unbanked population has been vulnerably dependent on informal channels of
credit like family, friends and moneylenders. Availability of adequate and transparent
credit from formal banking channels is still a distant dream for many of the agricultural
families.

Q. 2 Do you think that there is any gap in financial intermediation? If so, how can
the same be met?

According to the National Sample Survey Office (NSSO) 59th Round Survey Results,1
51.4 per cent of farmer households are financially excluded from both formal/ informal
sources. Of the total farmer households, only 27 per cent access formal sources of credit;
one third of this group also borrowed from non-formal sources. Overall, 73 per cent of
farmer households have no access to formal sources of credit. Large number of people in

1 NSSO, Ministry of Statistics &Programme Implementation, GOI

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rural areas are dependent on money lenders to meet their short and long term credit
needs, even as institutional sources of financial intermediation have increased in recent
years. Farmers often are reluctant to seek financial services from banks. Literacy barriers,
socio-cultural factors, and influence of vested interests of influential persons in the
villages are the reasons for this. While banking correspondents and facilitators (BCs and
BFs) as well as financial literacy centres (FLCs) have helped to improve financial
intermediation and financial literacy, there are miles to go for connecting with the
unbanked so far.

Financial sector faces the issues of manpower (quality, quantity and attitude). And on the
demand side, a large number of farming community and rural consumers are suffering
from poverty, low assetisation and financially illiteracy. Hence, the probable solution in
terms of bridging this humongous gap in financial intermediation shall be on both- supply
side as well as demand side. Hence, the financial intermediation without poverty
alleviation will be a meaningless exercise. We studied closely one engaging initiative
called Wadi piloted by NABARD at Kunkuri I and Kunkuri II of Ghatmunda village of
Jashpur district in Chhattisgarh. Ghatmunda is a dryland inhabited by tribal communities
with small land-holdings. They had no access to education and had adopted old and
traditional ways of farming. With the help of RSS, these tribals started cashew and mango
cultivation and other income generation activities. SHGs were formed and were trained in
pot-drip making, digging ponds for watershed, vermicompost making and so on. They
were also trained into a habit of thrift and savings. What actually started as an agri-
forestry-horticulture development programme turned out to be a successful financial
inclusion project. We need such type of inclusive and holistic projects.

Apart from this, financial intermediation needs to look into its ways of more equitable
distribution of credit, revised priority sector lending norms widening the scope of credit
to the agricultural sector. There needs to increase the coverage of insurance to mitigate
risk in agricultural activities. Of late BC and BFs model of banking has moved ahead
from brick and mortar model of banking so as to reach the unbanked people. We believe
that if we take advantage of SHG movement in making able and potential SHG members
as BC/BFs, it can prove a step ahead in terms of financial inclusion of weaker section of
the society landless, disabled, marginal farmers and women in particular and deliver the
other essential products of financial services like remittance, micro-insurance and others.

Q. 3 What are the problems faced by financial intermediaries?

The rural areas, home to over 60 per cent of population, and the economically weaker
sections received little importance in the regulatory role of RBI. Just before
nationalization, the banks had a definite urban orientation as about 44 per cent of total
deposits and 60 per cent of total credit were accounted for by five centres Bombay,

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Delhi, Calcutta, Madras and Ahmedabad2. The result of this is well known to us GDP
growth did pick up but poverty remained equally high, reflecting widening inequality.
RBI alone cannot be blamed for all the slackness as the government showed little
inclination to spread banking services to the poor. Acceptance of the fact that extent of
poverty depends upon the ownership of the productive assets and access to gainful
employment, institutional credit has been reckoned as an effective tool for poverty
alleviation by development thinkers and policy regulators. However, this broad paradigm
of rural credit also went through evolutionary process. The various stages in the evolution
are broadly indicated as under:

1950s to 1960s
Focus on overall growth and trickle down approach.
Institutions private commercial banks and cooperatives.

1970s to 1980s
Targeted credit at concessional rates to desired sections of the society.
Poverty alleviation programmes.
Nationalization of private banks.
Specialized institutions NABARD/RRBs

1990s to till date


Financial sector liberalization.
Removal of caps on interest rates.
Alternative means Microfinance evolution
We have tried to understand and analyse the problems faced by financial intermediaries in
rural areas, but we could not delve deep in totality of financial ecosystem to understand
the intricacies involved therein. However, we have jotted down some of the prima facie
points hindering the reach and effect of our financial intermediaries in rural parlance, as
written below:

Absence of empathizing regulatory framework eschewed towards the so far


neglected, unbanked and weaker sections of the society.
Lack of a political will coupled with the determination of all stakeholders
involved in the task.
Financial sector faces the issues of manpower (quality, quantity and attitude) for
servicing villages in India.

2 Report on the Trend and Progress of Banking in India, Reserve Bank of India

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Infrastructural issues of banking:- comparison of number of bank branches,
number of ATMs in India with other prominent developing nations in the world
essays our infrastructural issues of banking.
The slack pace of involvement of BC and BFs in rural areas by banks is a
concern. However, this BC/BF model too has some technological issues and
remunerative / transaction incentive challenges to scale up on a larger scale.
There needs to be a heightened level of digital and social inclusion along with the
financial inclusion of the so far unbanked population of the country.
Less involvement of bankers in credit monitoring and effective utilization of
credit in rural areas, as most of the rural branches are one official manned banks.

Q. 4 Analyse the working of JLG vs Producer Organisation to aid providing policy


input on the better suited aggregation model JLG vs POs.

JLG is an informal group comprising preferably 4 to 10 individuals...coming together for


the purposes of availing bank loan either singly or through the group mechanism against
mutual guarantee3. The JLG members would offer a joint undertaking to the bank that
enables them to avail of loans. The management of the JLG is to be kept simple with little
or no financial administration within the group. Each year the group members who want
to borrow sign a contract in which they accept liability not only for their own individual
loans, but also for the loans borrowed by the other members of their group, hence the
term joint-liability. The JLG enables the members to avail credit without collateral,
purely on the strength of peer partnership and at the same time gives them the flexibility
to pursue individual dreams. JLG is a credit-led fast growth model in favour of the
landless farmers (Bhommiheen Kisan), sharecroppers, tenant farmers, small/ marginal
farmers, artisans, other semi-skilled workers and rural women, who were earlier unable to
avail bank loan for want of collateral but are now running successful enterprises.

On the other hand, Producer Organisation is a group of primary producers, preferably


more than 40 individuals, coming together for the purpose of aggregation benefits to the
group as a whole. The rationale of formation of Producer Organisation lies with
limitations of an individual primary producer for operating this business at the higher
level. We visited one Seed Processing Centre, Risda (Farmer Producers Organisation) at
Jajgir in Bilaspur district of Chhattisgarh. The PO started from 69 farmers last 3 years
back. Today it is a PO of 183 farmers a mix of large, medium and small farmers,
averaging around 10 crores as an annual turnover with 26000 quintals of seeds
production this year. The coming together of farmers in one PO has really increased its
bargaining power in the market and is now setting the pricing terms with Government
agencies on purchase of certified seeds. This collectivization model has really turned
things in favour of farmers and is ideally more suited for aggregation benefits.
3 Journal of Rural Development, Vol. 33, No. 3, July September: 2014

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Working of JLG Working of PO
Informal group Registered entity
Benefits of aggregation can be Benefits of aggregation are at a
at a lower scale. greater scale.
Most of the time, individuals The underlying principle of PO
take loan on individual basis formation is reaping benefits of
and does not benefits of collectivization.
aggregation model. Ideally suited for aggregation
Ideally for sharecroppers, small model at the Input level, Skill
farmers who come together for upgrdation, Technological
availing bank loan. advancement in primary
Collectivization do happen at produce activities, infusion of
JLG in many cases, but they professionalism, and marketing
operate on a minimal scale. linkages.

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Module III
Q. 1 What is the level of irrigation in the area? If the area is dryland, whether the
interventions of watershed approach have been able to overcome the inherent
problems of dryland agriculture?

Raigarh district receives good amount of rain fall (i.e. more than 1000 mm) in the year.
Most of the precipitation is concentrated during the months of June to September. Many
mining and Steel plants are there in Raigarh. North Raigarh is covered by hills and south
Raigarh is mostly plain area. Since the area is rain fed and hilly, there is minimal
necessity for irrigation structures like canals. Mahanadi is the main river passing through
Raigarh. There are many tributaries of Mahanadi which are used for irrigation purpose.
Further to store water, surface water utility structures like check dams, retention walls,
nala bunds etc. are constructed. This is the major source of water for agriculture
activities.

In spite of heavy rainfall only 23% land is irrigated. Some areas do not find even enough
drinking water during the summer. Hence structures like farm ponds, dug wells are
constructed for ground water recharge. Many small ponds are dug nearby to the all
villages in Raigarh. The Lift Irrigation schemes and temporary structures are also being
constructed for irrigation.

Interventions of watershed in these areas are quiet successful in mitigating the water
scarcity. Agriculture Department of Chhattisgarh Govt is also implementing watershed in
many areas of Raigarh. Because of watershed interventions, particularly of NABARD, at
least one crop is assured in dry land farms. Local farmers are very thankful to NABARD
for watershed interventions. So overall interventions of watershed approach have been
able to overcome many of the inherent problems of dryland agriculture.

Q. 2 Have there been any problems in implementation of watershed farming? What


are your suggestions to overcome the problems, if any?

Watershed farming is the process of creating and implementing plans, programs, and
projects to sustain and enhance watershed functions that affect the plant, animal,
and human communities within a watershed boundary. There are many different
objectives of watershed management programs which can be categorized under purposes
such as to protect, conserve and improve the land of watershed for more efficient and
sustained production, to protect and enhance the water resource originating in the
watershed, to check soil erosion and to reduce the effect of sediment yield on the
watershed, to protect and enhance the water resource originating in the watershed and to
check soil erosion and to reduce the effect of sediment yield on the watershed etc.

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After interaction with the beneficiaries we observed that the farmers used the water
stored in the various watershed structures viz. Continuous Contour Trench, Water
Absorption Tank, Contour Bunding, Gully Plug, Gabion structure Nala Bund and Check
Dams. Some affluent farmers had open-wells too for fulfilling their water requirement.
There were no such serious issues in implementation of watershed farming, but as
suggested by some farmers, we understood that the areal dimensions and size of
watershed structures must be bigger enough to fulfil requirements efficiently.

Q. 3 Have there been any interventions towards either adaptation for climate change
or mitigation of the effects of climate change? If so, the role of project partners may be
elucidated?

Climate change is a change in the statistical distribution of weather patterns when that
change lasts for an extended period of time (i.e., decades to millions of years). Climate
change may refer to a change in average weather conditions, or in the time variation of
weather around longer-term average conditions (i.e., more or fewer extreme
weather events). Climate change is caused by factors such as biotic processes, variations
in solar radiation received by Earth, plate tectonics, and volcanic eruptions. Certain
human activities have also been identified as significant causes of recent climate change,
often referred to as global warming.

Due to global warming the temperature of earth surface is going up and consequently the
rain fall is reducing gradually. During the last few yearss the average rain fall in Raigarh
has fallen down surprisingly. The ups and downs of the climate has resulted delay in the
monsoon. In Raigarh the arrival of monsoon every year has been second week of June.
Irregular monsoon, less water, rising sea level, will impact badly on Indian agriculture
and as it is, major crop yields will be affected by higher temperatures. Due to delay in
monsoon it has been observed the quantity of rainfall is also decreasing.

Some stakeholders have initiated efforts to mitigate effects of climate change. Some of
them are as indicated below:

1. Solid Waste Management: In Raigarh district, in past, RSS in collaboration with


Municipal Corporation, ran programmes to collect solid wastes from around many
household. Degradable waste was separated and vermicompost was produced.
The expenses were managed from the service charge from the beneficiaries and
through the sales of compost. RSS is now planning to start such programmes
again in collaboration with Municipal Corporation, Chhattisgarh.
2. SRI: The System of Rice Intensification (SRI) is a methodology aimed at
increasing the yield of rice produced in farming. It is a low water, labor-intensive,
organic method that uses younger seedlings singly spaced and typically hand

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weeded with special tools. RSS identifies farmers to implement System of Rice
Intensification (SRI), which improved their yield by 1.5 2 times that of
traditional method and also uses less water than traditional method.
3. Solar Power Programmes: RSS is planning to start solar power programmes in
collaboration with Chhattisgarh State Renewable Energy Development Agency
(CREDA). Since its inception, CREDA has done extensive work in the field of
Renewable Energy focusing on rural areas and stand-alone devices. It has
implemented projects in the field of power generation from renewable energy and
environment friendly sources
4. Watershed Development Programmes: The land resources of the Chhattisgarh
state especially its dry drought prone lands, have been poorly managed by the
poor farmers of the state. Soil loss due to erosion coupled with reduced water
resources has led to a situation of rapid soil fertility deterioration,
declining/stagnating of crop yields, depletion of ground water levels,
deforestation, denudation and destruction of natural pasture. Exploring the full
potential of rain fed agriculture to meet the food, fodder and fuel requirement of
the state population, is the only alternative, however, this will require investing in
suitable soil and water conservation technologies, crop breeding targeted to rain
fed environments, agricultural extension services, and access to markets, credit
and input supplies in rain fed areas. The potential for increasing the irrigable area
and enhancing productivity from irrigated lands has its limitations. The remaining
land has to depend on rain fed farming forever. Therefore if the state has to
conserve and develop natural resources in rain fed areas to improve their
production and productivity, their development on watershed basis is inevitable.
Development of rain fed areas is important because more than 64 % of its
agricultural production comes from dry lands. Raigarh Sahyog Samiti (RSS)
started the Watershed Development Programme with the help and valued
guidance of NABARD in the year 2008 in the Raigarh and Jashpur districts of
Chhattisgarh state. In Raigarh district, almost all families of Kapartunga and
Bhalupani villages have benefitted from the Watershed development programme
of RSS.
Q. 4 What are the other interventions that are required to improve the infrastructural
index in the area visited by you?

Although Raigarh and nearby areas are resource-rich areas. There is sufficient amount of
rain, soil condition is good as well. But there is problem of transporting and marketing
the agricultural produces. Lack of credit linkage and illiteracy are other major issues.
Following interventions may be adopted to improve the infrastructural index in the area:

1. A common market infrastructure is needed in where the farmers can sell their
produce. This will help them get better prices than selling in APMC where the

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commission agents take some charges. We came across few hats and small
markets developed by NABARD but the number of such markets needs to be
increased on priority basis.
2. More watershed structures need to be constructed and efficiently maintained to
fulfil the needs of farmers.
3. The JLG programmes, run by Private Banks like HDFC have been very
successful and other banks / agencies need to be motivated for the same.
4. Storage facility is one area where Raigarh and Jaspur are far behind. We didnt
see enough cold storages operating the areas, we visited. For better marketing and
pricing of the produces, more cold storages need to be formed and maintained.
5. The district lacks transportation facilities although connectivity of villages has
improved after implementation of PMSY. At some villages, NABARD has also
constructed roads under RIDF.
6. Conducting regular awareness programmes/capacity building programmes for
farmers as well as bankers on the need for soil conservation measures required to
protect the fertility of the soil.
7. Although there is electricity available in the villages but most of the time it is not
in service. This situation needs to be improved.
8. The district is lagging behind the State in terms of the health and education
infrastructure. There is a need to promote the setting up of new schools/hospitals.
Banks should take steps to encourage financing for such activities.
9. High dense mobile networks are required in this area. Further public service
providers are using mobile internet for banking and other transactions. Lack of
network hurdles their operations.
10. Primary health centres mostly have doctors who dont wish to work there because
they are MBBS doctors who aspire for better income and urban places. Hence,
employing homeopathy and Ayruvedic doctors can fill the gap by which health
centres will have better work force and hence more centres and sub centres in
villages will come up which will improve the health index of small villages.
11. More number of Toilets can be pushed through the SHGs. They can derive a small
commission from the GP/ZP by encouraging the villagers to build toilets and
assist in the working process.

Q. 5 What further interventions are possible from NABARD?

Although the programmes of RSS, in collaboration with NABARD have been very
successful, still the scope for more development of the areas can be indicated as
described below:

o Issues with power, road, and bridges may be addressed to improve the
connectivity of the villages. More RIDF projects may be implemented.

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o The JLG programmes, run by Private banks like HDFC have been very successful
and other banks / agencies may be motivated for the same.
o A common market infrastructure is needed in where the farmers can sell their
produce. This will help them get better prices than selling in APMC where the
commission agents take some charges.
o NABARD has been closely associated with tribal development and sustainable
livelihoods through orchard based farming systems. As an integral component of
NABARDs Natural Resource Management (NRM) policy of providing
sustainable livelihoods, NABARD laid special emphasis on providing support for
holistic development of tribal communities with orchard establishment as the core
element. The implementation of comprehensive Tribal Development Fund (TDF)
had provided several insights for NABARD in framing strategies for holistic
development of tribal regions. The central focus of TDF is wadi model of tribal
development which has been acclaimed worldwide as a sustainable and replicable
model for poverty alleviation. Wadi programmes have been immensely succesful
in Raigarh and Jaspur areas. More farmers may be motivated to adopt the same
for overall growth of the district.
o NABARD may conduct more training training programmes in collaboration with
its Resource Support Organization RSS for training of new farmers so that they
can also improve their condition.

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Module IV
Q. 1 Has the development of micro-credit been able to overcome the dependency of
people on the informal money market?

Inadequacies in access to formal finance have led to the growth of microfinance in India.
Micro-credit operates through two main channels viz. a) banking system through the
SHGs under SHG-Bank Linkage Programme (SHG-BLP) and JLG bank lending
programme and b) through Micro Finance Institutions (MFIs) lending through individual
and group approach. The basic idea of micro-finance is simple: if poor people are
provided access to financial services, including credit, they may very well be able to start
or expand a micro-enterprise that will allow them to break out of poverty.

Microfinance sector has responded to these challenges admirably in the last 20 years.
With the efforts of NABARD and other stakeholders, the Self Help Group- Bank linkage
programme, which is the largest microfinance programme in the world, today touches101
million households through 7.9 million SHGs with thrift & deposits of about INR
1,36,914 million, annual loan offtake of INR 3,72,869 million and loan outstanding of
nearly INR 5,71,192 million4. Despite these milestones, a large section of the poor
population still remains unreached and even majority who are in the SHG fold face the
issue of inadequate credit. Bridging the last mile gap and forging partnerships to meet the
myriad needs of the so far neglected target groups (women, poor, rural, deprived, etc.)
and to ensure sustainable livelihoods to them are the biggest challenges being faced
today. Presently the average loan disbursement to SHGs in India is around INR
1,22,000/- i.e. INR 10,200/- per SHG member. Is this credit adequate seeing the immense
poverty in rural areas? Certainly this average credit per SHG member needs to be
multiplied five times in a time bound manner. But that requires a consolidated effort from
all the stakeholders in building the convenient ecosystem for absorption of this credit as
well.

During our field visit, we interacted with the SHG members at Dharamjaigarh and
Gharghoda blocks of Raigarh district of Chhattisagarh. Both the SHGs are involved in
income generating activities dona-pattal making and bakery unit respectively. They are
earning a sizable income for the group and individually locally, but in order to upgrade
their units, they need credit from bank so as to purchase the modern machines and double
the investment. They have the grit, convictions and have shown the desire to grow the
business. But unfortunately, after a long wait of credit support for one year from the
banks, they moved to MFI Spandan and mobilized credit for this. Hence, the timely and
needful availability of credit from institutional sources is still a concern for many in rural
society. MFIs and other informal money players are just filling in those inadequacies and

4 Status of Microfinance in India 2015-16, NABARD, July 2016

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imperfections in the market and moneylenders are exploiting the rural society to the
extent they can. Therefore, the dependency of people on the informal money market is
still there and will be there for some years to come.

Q. 2 Are the banks effective in meeting the credit needs of the people or do the people
rely more on financial intermediation of MFI? If so, why and how can these people be
mainstreamed into the banking process?

Banks have been conservative in credit linkage of SHGs in India so far. Of late, it has
picked the pace and is meeting the credit needs of SHGs to a great extent. Despite best
efforts of banks, there is still a gap / potential of 30 lakhs of SHGs for meeting the credit
needs requirement. Out of a total 79 lakhs SHGs in India only 45 lakhs of SHGs are
credit linked till now. This is due to the limitation of scaling up SHG movement in the
absence of human and financial resources and in the absence of deeper geographical
penetration of formal banking system due to several demand and supply side factors,
other intermediaries with a reach to the excluded segments of the society were required to
augment the efforts. Semi-formal financial sector service providers like the MFIs fill this
niche space and, to that extent, play a critical role in the financial inclusion. The MFIs
have served the underserved/un-served populace in the last few years and improved
access to credit though there have been quite a few debatable issues on the style of
corporate governance and ethics of conducting business on part of some of the MFIs.
Despite these debates, it has been realized that the MFIs do help in financial deepening
and can remain an important segment of the Indian financial market keeping in view the
present level of penetration of the banking system. Many of the MFIs have therefore been
conduits of credit flows from the banks whose capacities for last mile reach are
constrained under various forms of MFI-bank partnership model.

Our visits to the JLGs and SHGs in Raigarh corroborate this fact that there are many case
of under financing. In that case, MFIs may be seen as an able partner for meeting the
credit needs of the people in rural areas. However, MFIs will have to work hard in pursuit
of transparency and responsible finance, shaking off the perception that their motto is
profiteering at the cost of the poor but not profitability for sustainable and viable growth.
MFIs will also have to take initiatives to retool the product redesign for garnering new
customers and acquiring more share of the market. At the same time they need to re-
engineer the customer responsive processes so as to create a favourable climate for doing
business. MFIs will have to revisit the mission and business strategy and reinvent the
sector to remain relevant in the system. Creation of a new category of MFI-NBFC under
the framework prescribed by the Malegam Committee, more nuanced appreciation by the
financing banks of the difficulties being faced by some of the MFIs despite having
responsible and sustainable business model, greater sense of responsibility in the sector
as evident from the code of conduct being voluntarily accepted by the MFIs and the

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Microfinance legislation which is in the offing, possibly hold key to future success and
sustainability of the MFIs.

It is needless to surmise that both the micro finance models will coexist in the country for
a long time to come.While the MFI model reaches microcredit quickly and efficiently to
the financially excluded, the SHG-BLPprogramme besides credit and savings provides
wholesome social and economic justice to the excluded anddeprived section of the
society and has proven itself as an invaluable platform for inclusive growth.

Q. 3 What is the scope of the rural non-farm sector in enhancing the livelihood of
the people?

As agriculture alone cannot fulfill the needs of small farmers and landless, it is necessary
to enhance the livelihood of rural farmers through rural non-farm sector for additional
employment generation. While some of these activities are linked to local agricultural
production, others are independent of agricultural activities. Some of the major areas of
employment are presented below:

Agricultural Sector:

Operating agro-service centres;


Production of agricultural inputs such as biofertilisers, vermicompost,
biopesticides, biofungicides, mushroom spawn, fruit and forestry plants in
nurseries, seed production, processing and marketing, production of concentrate
feed, complete feed, mineral mixture for livestock silk worm eggs and promotion
of silk reeling and spinning;
Collection of non-timber forest products;
Processing of food and forestry products;
Installation and servicing of irrigation units, tubewells, hand pumps and biogas
plants;
Use of natural fibre and grasses for rope making.

Employment in Non-farm Sector:

Training of youth in masonry, carpentry, smithy, repairs of cycles and motor


cycles, tractors, pumpsets, solar energy appliances, electrification and winding of
motors, driving of automobiles, hospitality management, nursing, etc.;
Production and marketing of construction materials and bamboo utility articles;
Embroidery and tailoring;
Establishment of grocery shops and flour mills;
Cottage Industries - Pottery, textile, agricultural tools and implements;

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The relation between nonfarm expansion and rural poverty reduction is not automatic and
the outcome depends on the transmission mechanisms, which can work in three ways.
Firstly, given the heterogeneity within the rural nonfarm sectors in terms of the existence
of both high return and low return activities, if the poor face any constraints in
participating in the more remunerative occupations, the poverty alleviating impact of
nonfarm growth is attenuated. Secondly, the role of the nonfarm sector in poverty
alleviation depends to a great extent on its ability to function as a safety net for the poor
in situations of droughts, natural calamities, sickness or injury. In such circumstances,
even if a household participates in low return nonfarm activities, it may prevent a further
fall in income or a deepening of the current poverty level. Thirdly, the impact of the
growth of the RNFS on rural poverty may be indirect. This can happen when rising
demand for labour in RNFS exerts an upward pressure on wage rates in agriculture which
in turn has strong negative correlation with rural poverty.

Q. 4 What further interventions are possible from NABARD both in the areas of
micro-finance and in the non-farm?

The answer perhaps is the coordinated efforts by all the stake-holders. NABARD led the
process through establishment of an Advisory Board Expert group on DFI for women
SHGs under the chairmanship of DMD, NABARD and members drawn from various
stake-holders including MoRD, DFS, Banks, Sa-Dhan, MCRIL, etc. to give focused
direction to the micro-finance movement. Secondly increased coordination between
NABARD and NRLM is the need of hour. Digitisation pilots implemented by NABARD
in two districts have been successful in bringing back the interest of bankers in the
movement. EShakti phase II is being launched and digitization is moving to 22 districts
across geographically and transforming SHG bookkeeping from paper to digital.
NABARD also introduced new livelihood framework i.e. Livelihood and Enterprise
Development Programme(LEDP) during the year and the Centre for Microfinance
Research (CMR) was made functional again at BIRD. Regular interaction among stake-
holders through workshops, seminars and sensitisation of senior bankersas well as
recognizing good performances in the SHG-BLP sector both at National and State level
forumsalso will lead to better involvement of the stakeholders in the movement.

The fact is that a vast majority of Indians remain to be included in the accelerated growth
process. But the situation is by no means hopeless. There are many islands of success and
they now need to be scaled up nationally. There needs to be greater focus on the off-take
of PODF (Producer Organisation Development Fund) towards non-farm activities by our
partner agencies in the field. The loan structure can also be oriented more towards
working capital loan instead of capital establishment loan. Formation of community
based oganisation on non-farm activities can be the way forward. Doubling the farmers

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income by 2022 cannot happen all alone by farm sector. The complementary efforts of
off-farm and non-farm activities by famers will be the only solution. NABARD is paving
way for creating a healthy credit environment ecosystem in India for the same.

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