96 



GRANT OF LOANS AND ADVANCES TO AGRICULTURISTS. 



be specially charged against the Famine Insurance Grant, as Protective 

 Irrigation expenditure to be met from Imperial funds. This course 

 would, however, require the sanction of the Secretary of State, and it 

 is subject to the disadvantage that the sums so spent would reduce the 

 amount available for outlay on ordinary Protective Irrigation works 

 and on Protective Railways. Such free grants cannot in any case be 

 charged to the loan account, but it is advisable to provide that they 

 may be recoverable as an arrear of land revenue, should the money be 

 spent otherwise than in accordance with the conditions of the gift, 

 and it will be for Local Governments to consider whether this can be 

 provided for under the existing law, or whether further legislation on 

 the point will be necessary. 



11. Advances made in ordinary times under the Agriculturists' 

 Loans Act for the purchase of seed, fodder, cattle, and other require- 

 ments of agriculture are undoubtedly of the greatest advantage to poor 

 cultivators, and often enable them to sow their lands or preserve their 

 cattle without getting into hopeless debt; and, where funds are 

 available, liberal advances should be made for this purpose. In some 

 Provinces loans of this character are made free of interest or at low 

 rates of interest ; but the Government of India are of opinion that, 

 as a general rule, it is good policy to require a borrower who is given 

 a direct loan to pay a fair interest for it ; and that, save in very 

 exceptional circumstances, the same rate of interest should be charged 

 as is charged on loans made for the improvement of land. The 

 principles already enunciated regarding land improvement loans are 

 generally applicable to advances made under the Agriculturists' Loans 

 Act, but as such loans are usually of small amount individually, and 

 are often required to be disbursed in large numbers and with as little 

 delay as possible, it is still more important in this case to simplify and 

 expedite the procedure by such measures as empowering subordinate 

 officers to sanction loans and accepting joint or personal security. In 

 accordance with the recommendations made by the two Commissions, 

 the Government of India have already authorised a system of 

 employing selected officers to take lump sums with them into camp, 

 and disburse loans on the spot on the receipt of the borrowers. This 

 system has been authorised as regards advances to be made under both 

 Acts, but is specially applicable to petty advances made for the 

 purchase of seed and fodder. The Government of India also approve 

 of the suggestion made by the Famine Commission that, where 



