GRANT OF LOANS AND ADVANCES TO AGRICULTURISTS. 71 



presumably gains appreciably. We think that these loans ought not to 

 be made a source of profit to the State, and that the interest on them 

 should be reduced to 'a point sufficient merely to cover the risks taken. 

 At present the amounts found to be irrecoverable are inappreciable ; 

 and the charge for risk might, therefore, be correspondingly small 

 while the security remains as good as at present. We have made 

 recommendations which may slightly increase the risk ; but, even if 

 they are accepted, we would suggest that the rate of interest may, 

 with advantage, be reduced to 5 per cent, in all provinces. We think 

 that such a reduction will be likely to strike the popular imagination 

 as an act of great liberality, and may increase the attractiveness of 

 takavi loans in far greater proportion than might be anticipated from 

 the small diminution which would result in the actual payments by 

 each individual cultivator. 



190. The remarks in the preceding paragraph refer generally to 

 takavi advances in all parts of the country. We have, however, also, 

 carefully considered whether in precarious tracts where it is desired to 

 give a special stimulus to irrigation, it would be desirable to reduce the 

 general rate of interest, or grant loans free of interest. On the whole, 

 we are of opinion that, it would be preferable to make free grants-in- 

 aid, as proposed below, charging full interest on the remaining part of 

 the sum required, which will ba treated as an ordinary takavi advance. 

 This plan has numerous advantages. The financial arrangements will 

 be sounder and simpler. The free grants will be chargeable to some 

 final head of expenditure, such as 'minor works, agricultural'. It will 

 be easy also to work a system of free grants with considerable 

 elasticity. Thus the grants might vary from nil, by tenths to, say, 

 five-tenths ; or, by sixteenths, to eight annas in the rupee, of the total 

 sum required. 



191. Rigidity of collection. There is no cause of the alleged un- 

 popularity of the takavi system which has been more frequently testified 

 to than the rigidity of the system of collection. It is pointed out that 

 the money-lender gives time readily to the client with tolerable credit. 

 Government rarely or never gives time. There can be hardly any 

 doubt that this does constitute an objection in the mind of the culti- 

 vator to become a debtor to Government, provided that he can get the 

 money on sufficiently easy terms elsewhere. It is not that he has 

 merely to pay the interest. This would probably be no greater burden 

 to him than an addition to his land revenue assessment, which he pays 



