C411AXT OF LOANS AND ADVANCES TO ACUIICULTURISTS. 9i 



that such an extension affords no great immediate advantage to the 

 borrower, while it burdens him for a longer term with the duty of 

 making repayments. A still stronger reason is to be found in the 

 consideration that the amount of funds available for making such 

 loans is limited, and that the rate, at which fresh loans can be made, 

 depends to a large extent on the rate at which the money already out 

 on loan is repaid to Government, so that it may be utilised by being 

 re-issued in the form of further loans. Thus to extend the term 

 generally adopted for repayment would reduce the number of improve- 

 ments which could be aided by means of the total sum available, and 

 render it less effective for the purpose in view. The Government of 

 India, therefore, are of opinion that the ordinary term for repayment of 

 loans should not exceed 20 years ; but they have no objection to a Local 

 Government's taking the power to grant a longer term in special cases. 

 6. In fixing the actual term of repayment in individual cases some 

 consideration should no doubt be paid, as recommended by the Irriga- 

 tion Commission, to the probable durability of the improvement, with 

 the view of arranging that the whole of the loan shall be repaid 

 before the improvement ceases to be of use ; but this is a matter in 

 which the convenience of the borrower may well be consulted, and the 

 Government of India recommend the following procedure, which has 

 already been adopted in some Provinces. A specimen table* appended 

 to this Resolution shows to the nearest anna the amount of equated 

 yearly or half-yearly payments that would be required to discharge a 

 loan of Rs. 100 with interest at 6J per cent., in periods 

 of 10, 15 and 20 years respectively, from the date of the 

 first instalment, assuming that this is paid at the end of three years t 

 from the date on which the loan is drawn. Similar tables should be 

 drawn up for other amounts and periods, and should be explained to 

 the borrower, it being left to him to choose, subject to the approval of 

 the lending authority, which table of payments he will adopt. The 

 borrower will then easily understand how many instalments of so many 

 rupees each he will have to repay, and will be able to select the 

 scale which best suits his convenience. As regards the date from 

 which the repayment should commence, the Famine Commission 



* See pp. 126-27. 



f As stated further on in this paragraph, the period of grace contemplated is not 

 to exceed 2\ years ; but three years has been taken in the table to cover the results of 

 uupunctualitioa which will probably occur in tho repayment of tho instalments, 



