50 GRANT OF LOANS AND ADVANCES TO AGRICULTURISTS. 



advanced under the Act are extremely small;* and bear no proportion 

 whatever to the need which the country has of capital to carry out 

 material improvements. This result is alleged to be due to several 

 causes, among which the following are the most prominent : The 

 obstacles created by inefficient Native subordinates, to whom the 

 granting of such advances gives extra trouble ; the delay and expense 

 of the initial procedure, under which the first application has to be 

 stamped, the bond for repayment stamped and registered, and a 

 minute and troublesome inquiry has to be made into the nature of 

 the applicant's tenure and its value ; the necessity of paying interest, 

 which is usually fixed at 6J per cent, per annum ; the small number 

 of years over which repayment may be spread, and the consequent 

 largeness of the annual instalments ; the early date at which they 

 begin to fall due, even before the improvement has begun to realise 

 a profit ; and the rigidity of the rules for punctual repayment. 



Suggested alterations in the Act and rules. 



3. The evidence we have obtained on these points leads us to 

 recommend that the Government of India should cause an inquiry to 

 be made as to how far these complaints are valid, and to what extent 

 they can be met by an alteration in the rules. While all needful 

 precautions are taken to secure the State from loss, every unneces- 

 sary impediment should be removed which now makes the people 

 unwilling to apply for such advances. In particular we recommend 

 that the period over which the repayment of the debt can be spread 

 should be considerably enlarged ; that a reasonable time should be 

 allowed for the completion of the work before repayment begins ; 

 that the rate of interest charged should not exceed what it costs 

 Government to effect its loans ; that the annual instalments should 

 be fixed at an amount which would, in a prescribed term of years, 

 discharge the principal and interest together, so that any separate 

 interest account may be avoided, and which should not exceed at the 



*The sums disbursed in the last year on record, 1877-78, are as follows : 



Rs. 



Punjab (7 districts only) 180,000 



North- Western Provinces 68,543 



Bengal 459 



Central Provinces 7,515 



Bombay 14,957 



Madras. 156,367 





