UK ANT OF LOANS AND ADVANCES TO AGRICULTURISTS. ( J9 



famine years, 57 lakhs per annum. AVhilc the Government of India 

 agree with the Irrigation Commission that it is very desirable that 

 the supply of funds for this purpose should be continuous and suffi- 

 cient to meet all reasonable demands, they are unable to accept their 

 recommendation that the amount available for such loans should be 

 greatly increased and should be provided continuously without being 

 liable to interruption in years of financial stress, the money being 

 obtained from loan funds if necessary, seeing that the additions to 

 the Provincial Loan Account are made from the cash balances of the 

 Government of India, which are necessarily limited according to the 

 circumstances of the year. They, however, recognise that, should 

 the system of loans to agriculturists be improved in accordance with 

 the suggestions already made, the demand for such loans is likely to 

 increase gradually, and so long as it is kept within reasonable bounds, 

 and is a natural and not an artificially inflated demand, they will 

 endeavour to meet it to the extent to which funds may be available 

 from time to time. 



15. In this connection the Governor-General in Council thinks it 

 necessary to utter a word of caution against what he considers to be 

 a very real and practical danger, namely, the danger of creating, 

 by too active a policy, a forced and spurious demand for these advan- 

 ces. Even under the most favourable circumstances irrigated 

 cultivation requires, at all events in the case of wells, more capital 

 than dry cultivation ; and in many parts of the country, where the 

 wells are costly and their results uncertain, and where physical con- 

 ditions make it possible to irrigate only a small area from each well, 

 only the highest form of cultivation, which entails very considerable 

 annual expenditure, is likely to be profitable. In such a case it is 

 worse than useless to encourage a peasant to contract a debt for the 

 construction of a well, the profitable working of which is beyond his 

 resources ; and the Government of India, while they are anxious to 

 see the system of advances administered in a sympathetic spirit, and 

 made as simple and liberal and elastic as possible, trust that no exces- 

 sive inducements will be held out to individuals to apply for loans 

 which they may find it difficult to repay, and that any increase of 

 demand will be spontaneous, and therefore healthy. 



16. Under the Provincial Loan Account system any profits or losses 

 that may occur on these loans are credited or debited to Provincial 

 Revenues, and the Government of India would suggest to Local 



