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GRANT OF LOANS AND ADVANCES TO AGRICULTURISTS. 



Governments that, as recommended by the Famine Commission, an 

 administrative account should be maintained for the loans under the 

 two Acts, showing on the one side the profit made by the Local 

 Government by charging to borrowers a higher rate of interest than 

 it pays to the Imperial Government, and on the other, the cost of 

 remissions and of other expenses connected with these loans ; and 

 that where, on an average of years, the net profits of the Local 

 Government are large, measures should be taken to reduce them, 

 not by a reduction of the rate of interest charged, but by more 

 liberal treatment of those cases in which the borrower has met 

 with misfortune, or by providing expenditure for such purposes 

 as maintaining a staff for well-boring or other aids to land improve- 

 ment, or for an extension of the system of free grants-in-aid. 

 It must, however, be clearly understood that expenditure on such 

 establishments or grants, though it may be justified by profits on 

 loan transactions, is entirely distinct therefrom, and must be sepa- 

 rately debited in the Local Government's current expenditure. 



17. Seeing that the financial responsibility for this loan system 

 rests with the Local Governments, the Government of India are 

 prepared to relax the present law, under which the previous sanction 

 of the Governor- General in Council is required for any modifica- 

 tion of the rules in force, and will take steps to have the necessary 

 change made in the existing Acts. Local Governments will then 

 be empowered to revise their rules at their discretion subject only 

 to the control of the Imperial Government ; but whenever it is pro- 

 posed to make any change which is not in accordance with the princi- 

 ples enunciated in this Resolution, or which materially affects financial 

 arrangements, previous reference should be made to the Government 

 of India ; and in all cases copies of the notifications effecting changes 

 in the rules should be sent to the Government of India for their 

 information. 



