CHAPTER VI

 

BANKING TRADE AND COMMERCE

 

(A)  Banking and Finance

 

             Agriculture and industry play a key role in the economic development of a region. The other infrastructural facilities such as capital accumulation, provision of finance, banking and cooperative institutions designed to extend credit and to provide other facilities also serve as vital factors. Banking and financial institutions facilitate the growth of production by mobilization and deployment of the resources to various productive sectors. On the other hand trade and commerce facilitate the distribution of output through various channels.

 

(a) History of Indigenous Banking

             

            The history of indigenous banking of the area falling under the present Mansa District was not much different from the erstwhile Patiala Princely State. The banking system in India has been practised since time immemorial. The Vedas, Manusmritis and Kautilya’s Arthshastra bear good testimony to the existence and efficient working of banking in old days. In the 11th and 12th Century, hundis were extensively used by the businessmen. The whole system was very much different from modern banking system. It was carried on by sahukars. Their business was quite flourishing and they enjoyed reputable position in the society.1 This area had its traditional indigenous bankers in towns and moneylenders in villages. The former received deposits, dealt in hundis and financed trade and industry, advanced loans after carefully ascertaining the purpose for which these were required. The moneylenders in the villages on the other hand mainly financed for consumption purposes. The village moneylenders namely sahukars, shroffs and banians constituted the main bulk of the indigenous bankers for a long time. The wealthy agriculturists also played an important role in the rural economy and like other moneylenders were engaged in providing agricultural finance. The rate of interest charged by these moneylenders differed from place to place. Sometimes they lent money against pledge of gold   or   silver   ornaments, land   and   standing crops  in  the  fields.  The crops in the fields were usually purchased by the moneylender himself during  the harvest time at nominal rate and the price was adjusted against the  loans  including interest. Loans were advanced clandestinely and dubious ways  of  collection  of  arrears  were  adopted by the moneylenders.

 

1 Sharma, A.G. State in Relation to Commercial Banking in the Developing Economy of India (Delhi, 1968) pp. 53-54

115

Thus the system of lending was abounded in malpractices, such as high rate of interest and defective accountancy. Once a borrower came into the clutches of the moneylender, he would live and die in debt leaving the debt to his next generation.

             With the advent of British, the old banking system declined. The sahukars methods became outmoded and were by and large replaced by the modern system of banking. The need for borrowed money in the present Mansa District has been met from indigenous bankers (moneylenders), commercial banks and cooperative credit institutions.

               Despite various laws, the moneylenders continued to by-pass the provisions of these laws. They indulged in various malpractices. Most transactions were either oral or against ornaments, promissory notes were obtained for a higher amount than what actually advanced even duplicate accounts were kept. All moneylenders did not obtain licenses by getting themselves registered. They did not maintain regular accounts. As on 31 March 2000, there were no registered moneylenders in the district, money-lending work was done by a large number of persons. Money lending, particularly in rural areas of the district continuous to be a significant source of credit. In addition to cooperative agencies, institutions like Punjab Khadi and Village Industries Board and various commercial banks provide credit facilities in rural areas.

              The number of cooperative credit societies in the district as on 31 March 2000 was 148 with total membership of 61,114.

 

              (b) General Credit Facilities

 

(i)      Indebtedness-Rural and Urban

              

                Indebtedness (rural and urban) means the amount of loan, which the people owe to the various agencies and individuals. Considerable indebtedness prevails in the district in general and in rural areas in particular. The agriculturist is a man of small means, especially during crop failure he has to depend on credit. Rural indebtedness is the amount of loan borrowed by the ruralists. Such loans are mostly unproductive, as these are taken for incurring expenditure on performing ceremonies, for meeting consumption needs and for indulging in bad practices and not much of the amount is used for the improvement in agriculture, for the purchase of improved agricultural implements, better seeds, fertilizers, etc. Urban indebtedness implies the amount of loan taken by the urban people from various lending agencies, such as banks, insurance companies and private financial institutions, etc. But unlike the rural debt, the urban debt is highly productive because mostly the borrowers are either businessmen or traders or industrialists, who borrow either to start new ventures or to expand the existing ones. These debts thus result in increasing the income of the State and generate more employment.

 

           Rate of Interest.- It is paid by the borrower to the lender. The rate of interest charged varies from place to place, from one lending agency to another and is related to the purpose for which the amount has been borrowed. It differs with the nature of the loan, the period involved, the risk involved, the nature of surety, etc.

            The commercial banks in the district charge rate of interest fixed by the Reserve Bank of India from time to time. Their rates differ according to the amount advanced and for the purpose it is lent. The cooperative societies advance loans at the lower rates of interest. The rates of interest charged by the cooperative banks as on 31March 2000 are given hereunder:

Serial No.

Category of Loan

Interest Rates

(Per cent)

1

Composite Integrated and Small Road Transport Operator Loan Scheme

 

i)

Upto Rs 25,000/-

14.00

ii)

From Rs 25,000/- to Rs 2 Lakhs

15.00

iii)

Above Rs 2.00 Lakhs

16.50

2

Cash credit facility to businessmen, traders, contractors and self employed persons

16.50

3

Vehicle loans under bank scheme

16.50

4

Scheme for loans to students for professional courses

14.00

5

Loan against National Saving Certificates/

Kisan Vikas Patras

15.00

6

Medium term Loan for purchase of consumer durables

16.00

7

Overdraft facility to the employees of the Bank/Cooperative Department/Audit Department

15.00

8

Loans to Cooperative Central Banks

 

i)

Working capital loans

13.50

ii)

Term loans

13.50

9

Loans to other Apex Societies

 

i)

Cash Credit

13.50

ii)

Term loans

15.50

(Source: Managing Director, Punjab State Cooperative Bank Limited, Chandigarh)

 

         Indigenous moneylenders charge interest varying from 18 to 30 per cent or sometimes even more. The unregistered moneylenders advanced loans at still higher rate of interest.

         With the advancement of literacy and the availability of adequate banking facilities the system of usury have become outdated. However, in the remote areas where people are still backward, the moneylenders take advantage of their ignorance and helplessness by charging high rate of interest.

(ii)  Role of Private Moneylenders and Financiers

 

            Moneylenders.- Though the institution of private money lending has lost its importance, yet it has not been completely eliminated. It is regarded as a necessary agency where the modern banking has not developed. The illiterate and conservative people, who have not been fully acquainted with the modern banking practices or have not  brought themselves into the cooperative fold still go to the doors of the private moneylenders.

              The moneylenders or the banians and the commission agents (arhtias) still dominate the rural sector of the district economy. The business of the moneylender is generally a family concern. His working capital is his own. He grants loans against all kinds of securities such as gold, jewellery, land, promissory notes, etc. He also lends against personal credit of the borrowers.

             In the absence of any adequate protection to the debtor in the form of State regulation the moneylender indulged in a number of malpractices and caused hardships to the debtors. The Government had, therefore, to intervene to prevent moneylenders from indulging in malpractices. The various Acts passed by the government checked the activities of the moneylenders. The rise and growth of modern banking institution also affected their business adversely.

            Moneylenders now operate under severe restrictions imposed by the Punjab Registration of Moneylenders Act, 1938. By this act, the moneylender is required to register himself with the concerned Sub Divisional Officer (civil) and obtain a licence for carrying on the business. He is also required to maintain regular account books.

 

(iii) Government and Semi-Government Credit Agencies

 

             In addition to sahukars or moneylenders, a number of government and Semi-Government agencies have also been established in the State to save the loanee from the clutches of moneylenders and to provide finance in urban as well as rural areas on fair terms and on reasonable rate of interest. These agencies include the Punjab Financial Corporation, Punjab State Industrial Development Corporation. The Punjab Khadi and Village Industries Board, Cooperative Banks and Cooperative Societies.

                The Punjab Financial Corporation was established in 1953 with the object of providing medium and long term loans to the industrial concerns located in the State of Punjab. Loans are provided by the corporation for setting up new industrial projects as also for the expansion, diversification, renovation and modernization of existing projects. The corporation also sponsors many promotional activities like entrepreneurship development programme, market studies/surveys, etc. It also provides financial assistance for setting up of hotels, nursing homes/small hospitals, development of industrial estates and purchase of transport vehicles, etc. 

 

              The Punjab State Industrial Development Corporation was incorporated in 1966 to act as a catalyst for the development of large and medium-scale industries in the State. Since then, it has been acting as prime mover in the state for promotion of industrial ventures and helps the entrepreneur to identify and investigate projects and to obtain letter of intent/ registration from the Government; provides financial support, both equity and term loan assistance; acts as an agent of Industrial Development Bank of India, Small Industries Development Bank of India and State Government for providing assistance to industry under various schemes, etc.

             The Punjab Khadi and Village Industries Board established in 1955 is actively engaged in the economic uplift of the rural masses of the Punjab State, particularly the village industries and artisans belonging to Scheduled Castes, Backward Classes, weaker sections of the society and yellow card holders through the programme and scheme of Khadi and Village Industries Commission.

 

(iv) Commercial Banks

 

             Although the banking was practised in India in early times, but it has started developing on organised and modern lines with the beginning of twentieth century. The social controls on banks were introduced in 1968. With this the banking activities are being increasingly regulated by the Government of India and the Reserve Bank of India. The private sector banks also have been directed to diversify their lending activities. There is uniformity in the rates of interest charged by these banks, as they are governed by the directives of the Reserve Bank of India. Under Social Control on Banks Scheme, 14 major commercial banks were nationalized in the country in July 1969 and another 6 major commercial banks in April 1980. In 1993 the Government of India, allowed the setting up of new private banks through its guidelines issued in January 1993. With the opening of new private banks competition has become an important factor in achieving higher productivity and efficiency of the banking system. The existing banks have been allowed greater flexibility to expand their operations. Besides, foreign financial institutions have been permitted to have equity participation upto 20 per cent in new private sector banks.   

                 There are 8 commercial banks operating in the district apart from regional rural banks, central cooperative banks and primary agricultural development banks. Banking facilities are available in all the towns and major villages in the district.

                The State Bank of Patiala is the lead bank for Mansa District. The Lead Bank Scheme was started in the State with main objective of ensuring even flow of credit to weaker sections of the society. The system of planning in the shape of district Credit Plan was introduced for assessment of district specific credit potentials for exploitation and optimum utilization of scarce financial resources. District credit plan is prepared/ updated every year by revision of its priorities as per directions of Central Government and Reserve Bank of India. Credit planning is of immense importance in the matter of economic development works undertaken by the bankers. The Reserve Bank of India introduced an innovative rural banking scheme viz. Service Area Approach or Grass Root Planning at village level in 1989. Under this new arrangement, each branch in rural and semi-urban areas serves a designated area about 15 to 20 villages in its neighbourhood. The Service Area Approach is a vital step to improve the credit delivery system apart from focusing attention on the allocated service/command area by respective banks and monitoring of the end use of credit. A designated branch is primarily responsible for meeting the appropriate credit needs of its service area. Each bank branch is expected to be deeply involved at micro level developmental planning. This new approach has helped in improving the quality of lending by forging a link between credit and financial requirement for a planned growth of village economy. This scheme has provided banking facility to all the villages of the district.

           The commercial banks alongwith numbers of branches functioning in the Mansa district as on 31 March 2000 are given below:

 

Name of the Bank

Number of Branches

State Bank of Patiala

                           14

Punjab National Bank

9

State Bank of India

4

Punjab and Sind Bank

3

Oriental Bank of Commerce

3

Indian Overseas Bank

1

Canara Bank

1

Jammu and Kashmir Bank Ltd.

1

 

         The bank wise list of bank branches functioning as on 31 March 2000 in the Mansa District is given in Appendix I at pages 133 to 134.

          The total deposits and advances in the district as on 31 December 2000 were Rs 21,277 lakhs and Rs 66, 652 lakhs respectively.

 

(v) Post Office Savings Bank Accounts

 

              Post offices are the most important outlets for the savings of the people especially in the rural areas of the district. The post office savings banks in India have been handling savings bank deposits since 1886. With the spread of post offices in towns and bigger villages, these savings banks got a wider area of operation. After the Independence of the country in 1947, efforts have been made to tap the savings of the community through the post office savings banks. To fulfill this purpose different varieties of schemes have been introduced.

              The number of new post office accounts opened in Mansa District during 1992-93 was 357 which increased to 686 during 1999-2000. The details of new accounts opened and amount deposited in these accounts during 1992-93 to 1999-2000 is given below:

Year

New Savings Banks

Accounts Opened

Amount Deposited

(Rs)

1992-93

357

53,18,154

1993-94

385

51,75,783

1994-95

449

18,68,642

1995-96

366

55,07,364

1996-97

439

72,79,613

1997-98

408

64,33,494

1998-99

375

79,20,436

1999-2000

686

         1,26,19,572

(Source: Superintendent Post Offices, Bathinda)

 

(vi)  Cooperative Credit

 

            The progress made by cooperative institutions in the Mansa District has been impressive, they compete with the commercial banks in mobilizing savings and also providing credit facilities to the agricultural sector. The cooperative credit institutions provide facilities for short and medium-term credit under crop loan scheme for fertilizers, improved seeds, agricultural implements, marketing storage, and extension of advanced agricultural techniques. The usual sources of short-term finance of the farmers were the moneylenders who charged exorbitant rates of interest and resorted to many malpractices to cheat the ignorant and illiterate cultivators. The idea of using cooperation in India as a means of combating rural indebtedness and supplying rural credit was suggested first in the Report of Fredrick Nicholson in 1895-97. However, a real beginning of the Cooperative Movement in India was made with the passing of the Cooperative Credit Societies Act, 1904 which enabled the organisation of credit cooperatives. The cooperative credit society represented an organisation with a very selective membership, advancing nominal amounts as loans to meet a limited number of contingencies, seldom related to production and with negligible local participation in its resources. The objective of the cooperative movement during the period was not to replace the moneylender, but to introduce wholesome practices in the dealing of private/money lending agencies.

            As on 31 March 2000, there were 589 cooperative societies in the district out of which 148 were Cooperative Credit Societies. Besides, there were 1 Central Cooperative Bank with 22 branches, 3 Primary Agricultural Development Banks and 8 Regional Rural Banks in the district. The Mansa Central Cooperative Bank Ltd., Mansa came into existence on 25 February 1993. The bank advances short and medium term loan to individual members through its affiliated cooperative societies for seasonal agricultural purposes and for the marketing of the crops. The working capital of the bank is derived mostly from the share capital contributed by the cooperative societies and their deposits. The cooperative bank in turn arranges finances to meet the requirements of the members of the cooperative societies.

       Cooperative Credit Societies.- These societies mobilize savings of the members and advance loans at reasonable rate of interest for productive purposes. Previously, the moneylenders advanced loans and other essential commodities on credit to the borrowers and preferred to buy the produce of the latter, in lieu thereof at concessional rates. This exploitation of the cultivators acted like a double-edged blade, i.e. high rate interest on the loans advanced to the poor cultivators, and the low price given for their produce. The powers of the moneylenders were curtailed with the passage of the Punjab Registration of Moneylenders Act, 1938. The cooperative societies aim at eliminating the moneylenders, as a class.

            The agricultural credit societies save the agriculturists from the exploitation of the private moneylenders. The societies inculcate the habit of thrift and with that end in view, they mobilize rural savings, so that they serve the twin purpose of thrift and credit. During1999-2000, there were 148 cooperative credit societies (111 agricultural credit societies and 37 non-agricultural credit societies) functioning in the district.

            The non-agricultural credit societies comprise mostly employees’ credit societies catering to the credit requirements of persons outside agriculture. These societies also eliminate the exploitation of the artisans by the middlemen and to help the farmers in the purchase of raw materials and disposal of finished products. Efforts have been made to organize small-scale and cottage industries on cooperative lines. Tanning, shoe-making and handloom industry have been selected for this purpose.

            The details regarding the membership and the working of agricultural and non-agricultural cooperative credit societies, functioning in the district during 1992-93 to 1999-2000 are given in the Appendix II and III on pages 135 and 136 respectively.

             

             ( c ) Insurance and Small Savings

 

             Insurance.- With the nationalization of life insurance business in 1956, the Life Insurance Corporation of India became the sole agency for life insurance. The Life Insurance Corporation of India entered the field of general insurance in 1964. The general insurance too was nationalized in 1971. Subsequently in 1973, general insurance business was separated from Life Insurance and General Insurance Corporation was formed to provide better service to the policy holders in the district.

               The Life Insurance  Corporation of India opened its branch office at Mansa in 1 February 1982. The number of Development Officers and Agents in the district as on 31 March 2000 was 12 and 328 respectively.

            The Life Insurance Corporation of India advances loans to the policy holders, Government and Semi-Government institutions/agencies for different purposes. The performance of the Life Insurance Corporation in the Mansa District, during 1992-93 to 1999-2000 is given below:

Year

Number of Policies

Sum Assured

(Rs in crores)

1992-93

3,439

19.47

1993-94

3,373

18.62

1994-95

3,900

28.29

1995-96

3,977

28.53

1996-97

4,582

31.40

1997-98

4,782

31.18

1998-99

4,507

29.11

1999-2000

5,278

37.16

(Source: Manager, Life Insurance Corporation of India, Ludhiana)

 

          Before the nationalization of general insurance on 1 January 1973, a number of private companies were engaged in the work of general insurance business. Besides, the Life Insurance Corporation of India had also started general insurance business with effect from 1 January 1964. On 1 January 1973, general  insurance companies were nationalized and an apex body known as the General Insurance Corporation came into existence. Under the General Insurance Corporation, four general insurance companies viz. the Oriental Fire and General Insurance Company Ltd., the New India Assurance Company Ltd., the National Insurance Company Ltd., and the United India Fire and General Insurance Company Ltd., are working.

             All types of general insurance policies are issued for only one year and are renewable every year. The risks covered under the general insurance are broadly of three types, viz. fire, marine (transportation of goods) and miscellaneous insurance. Under the miscellaneous insurance, there are about 20 to 25 types of insurance including motor insurance and all other types of insurance like fidelity guarantee, aviation insurance, burglary, personal accidents, etc. Besides, cattle and poultry insurance has also been introduced from 1974.

 

            Small Savings.- National Savings Organisation offer a complete plan of savings to all types of investors and savers, regular assets, investment of accumulated savings for earning annual interest or compound rate of interest, along with capital on maturity encashment, a provident fund for self employed, a regular income after retirement, etc. 

            The network of post offices in the district mobilize small savings in rural as well as in the urban areas. Post Office Savings Banks extend banking facilities virtually at everybody’s doorstep.

            The Directorates of Small Savings have been set up in all the states to ensure better co-ordination between the Central Organisation and the State Governments. The Director, Small Savings, Punjab, Chandigarh is the head of the State government’s Small Savings Department. At the district level, the District Savings Officer is the Co-ordinating Agency between the Central Organisation and the district authorities in the promotion and growth of the movement. The main advantage to a State under this programme is that out of the money invested by the people in small savings, two third of it is available to the State Government as interest bearing loan from the Government of India for financing development activities within the State.

            Post offices savings bank accounts, cumulative time deposits, recurring deposits, National Saving Certificates, 15 Year Public Provident Fund, Kisan Vikas Patras, Indira Vikas Patras, etc. constitute small savings schemes in the post offices. These schemes have been introduced to instill the savings habit among people and to mobilize resources for  a developing economy and at the same time these give them an opportunity to build capital assets out of their savings.

            The number of agents, who canvassed and propagated for the Small Savings Scheme on commission basis, in the Mansa District as on 31 March 2000 was 150.

            The net investment under the Small Savings Schemes in the district during 1995-96 to 1999-2000 are given below:

Year

Net Investments

(Rs in Crores)

1995-96

16.70

1996-97

17.00

1997-98

19.19

1998-99

30.00

1999-2000

38.23

                        (Source : District Small Savings Officer, Mansa )

 

             The National Savings Schemes offer certain unique facilities including nomination, immediate encashment by nominee on death of account holder, interest accrued on yearly basis for income tax purpose in the case of National Savings Certificates (VI issue); Social Security Certificates and no tax deduction at source. Amounts invested in these schemes are exempt from wealth tax up to Rs 5 lakhs for an individual.

 

            National Savings Certificates.- The Government of India have released National Savings Certificates Series VIII. An investment in these certificates entitles an investor to get income tax exemption under Section 88 of the Income Tax Act, 1961. The interest accruing annually but deemed to be reinvested will also qualify for tax rebate under Section 88 of Income Tax Act. Such interest will be entitled to exemption under section 80-L of Income Tax Act. There is no upper limit for investment in these series. As on 31 March 2000 these certificates were available in the denominations of Rs 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000. In the VIII series Rs 1,000 grows to Rs 1,901* after six years. The annual rate of interest of 11* percent payable on maturity is compounded six monthly.

            (d) Currency and Coinage

            The currency of India consists of one rupee notes** and coins (including small coins), both issued by Government of India and bank notes are issued by the Reserve Bank. The work in connection with the management of currency was attended to by the Central Government departmentally through the Controller of Currency upto 31 March 1935. With the establishment of Reserve Bank, under the Reserve Bank of India Act 1934, it took over the management of currency in India. The Reserve Bank has the sole right to issue currency notes (referred to as bank notes) under Section 22 of the Act. Currency notes are legal tenders at any place in India in payment or on account without limit. After the establishment of Reserve Bank, for sometime bank used the currency notes issued by the Government of India. The bank made its first issue of currency notes in January 1938 in the denominations of Rs 5 and Rs 10 followed by Rs 20,   Rs 50, Rs 100, Rs 500 Rs 1,000 and Rs 10,000. High denomination notes of rupees Rs 500 Rs 1,000 and Rs 10,000 have been demonetised by the government on 12 January 1946. The Reserve Bank reintroduced the notes of denominational value of Rs 1,000 and Rs 10,000 from 1 April 1954 and Rs 5,000 notes were also introduced on the same date. The high denomination notes i.e. Rs 1,000, Rs 5,000 and Rs 10,000 were demonetised for the second time on 16 January 1978. The notes of rupees one thousand denominations were, however, reintroduced in October 2000. The minting of rupee notes is governed by Indian Coinage Act 1906, while the rupee note was issued under the Currency Ordinance, 1940 (for accounting purposes this rupee note was treated as rupee coin). One rupee notes and coins are legal tender in the country for unlimited amounts.

            The decimal system of coinage was introduced in the district on 1 April 1957 along with the old (British) coins. The old rupee was divided into 

half a rupee (dheli or athani), forth of a rupee (choani), one eighth of a rupee (doani), one sixteenth of a rupee (anna), one thirty second of a rupee (takka), and one sixty forth of a rupee (paisa). An anna was equal to 4 paisa or 12 pies, there being 3 pies in a pice. Gradually, the old coins were withdrawn from the circulation. After the Independence new emblem of Government of India was printed on all coins and currencies in place of George VI.

 

  *       As on 14 March 2000

**      A process of coinization of Re 1, Rs 2 and Rs 5 denominations

           was initiated in 1991 and these had been fully coinized from 1996.

                 However, in consultation with Government of India, the Rs 5

                 denomination notes has been reintroduced in May 2001 to

                 supplement Rs 5 coins.

                      The Coinage Act was amended in 1969

                 Almost all countries in the world, therefore, have adopted decimal system of currency and coinage with a view to bring about uniformity and facilitating comparison with currencies of other countries of the world. Under this decimal coinage system, coins and paper currency of different denominations are in circulation. Now a rupee consists of 100 paisa, with coins in the denominations of 1,2,3,5,10,20,25 and 50 paisa. Minting of coins of 1,2,3 and 5 paisa has been restricted to control the circulation of small paisas. Currency notes are issued in the denominations Rs 5, 10, 20, 50, 100, 500 and 1,000.

             At the initial stage of the introduction of the new currency, the public in general and rural masses in particular, faced some difficulties, as the old system was deep-rooted in them. In course of time, people have now fully adopted  the decimal system of coinage.

            The decimal coinage system has brought about a great transformation in the whole accounting procedure. Undoubtly, it has made the accountancy and book keeping much easier, quicker and simpler.

                                   

                                    (B) Trade and Commerce

 

            Mansa is basically an agricultural district and is famous for agro-based industries such as manufacturing of agricultural implements, tubewell parts, tractor trailers, carts, etc. With the opening of cotton ginning mills and rice shellers at Bareta, Budhlada and Sardulgarh, the processing of cotton and paddy has been started in the district. The district is surplus in main agricultural commodities. The main trade centres in the district are Mansa, Budhlada, Sardulgarh, Bareta and Bhikhi where the surplus commodities are brought for sale.

            The value of export of industrial goods from the district was to the tune of Rs 1,620* lakhs during 1999-2000. The State Government is extending a number of facilities, like tax exemptions, cheap power, loans, etc. to the entrepreneurs for setting up industrial units in this area.

 

(a)   Course of Trade

 

The usual course of trade for agricultural produce in the district is through  the  dealers / middlemen  who  are members of the regulated market

committees. The growers bring their agricultural produce to a near by mandis and the dealers sell it to the traders. Commission agents (arhtias) wholesaler and retailers act as middlemen between the growers and the consumers as there is no direct link between them.

            The purchasers of the agricultural produce gather at the shop of kachcha arhtias and the sale of commodities starts in open auction under the supervision of the auctioneers appointed by the market committee. Such sales are  conducted   daily  during  the hours fixed for this purpose. Kachcha

* Provisional

arhtias, who sell the commodities on behalf of the cultivators, receive commission on fixed rates, permissible under the bye-laws of the market committee and are responsible for the payments to the sellers. The commission is paid to the arhtias by the purchasers. The rate of commission during 1999-2000 was 2.5 per cent. The delivery of the goods is made at the shop of the kachcha arhtia.

                       

            (b) Trade Centres     

 

(i) Regulated and Unregulated Markets

 

              In order to save the agriculturists from exploitation by middlemen, the Punjab Agricultural Marketing Board (known as Punjab Mandi Board) has been set up by the State Government. The activities of agricultural markets are regulated by the Board under the Punjab Agricultural Produce Market Act, 1961,which provides for regulation of markets and formation of market committees. These regulated markets play an important role in helping sale of commodities at fair and reasonable price. The whole of the district has been covered by the regulated markets and purchase centres to save the cultivators from unhealthy market practices and to ensure them the fair price for his produce.

            All the usual course of trade in agricultural produce from producer to consumer is handled through middlemen who are wholesalers, retailers and commission agents or arhtias. Market committees representing growers, dealers, cooperative societies and government have been set-up at all the markets. The committees regulate sale and purchase of goods. Each village of the district has been attached with one market or the other and the provisions of the Act are applicable to the whole of the area where transactions, delivery and weighment are done.

            In the regulated markets, all commodities brought by the growers, village traders, etc, are sold in open auction in the presence of dealers under the supervision of the auctioneers, appointed by the market committee. Auction is held during the market hours at each shop turn by turn . When the auction is over, a receipt showing the weight, rate and net price after making necessary deductions is issued to the cultivators who later on showing the same, receives payment for the arhtias.

            These markets provide a system of competitive buying, eradicate malpractices and ensure the use of standardised weights and measures. They also provide uniform market rates.

            As on 31 March 2000, there were 5 regulated markets in the district one each at Mansa, Budhlada, Sardulgarh, Bareta and Bhikhi. Besides, there were 12 sub-yards attached with these regulated markets in the district. The average number of villages and area served by each regulated market in the district was 48 and 430 sq. km. respectively.  In these regulated markets, the main commodities for which transactions usually take place are wheat, paddy, cotton, oil –seeds, etc.

 

(ii) Fairs (Melas) and other Rural Marketing Centres

 

            Fairs (Melas).- A number of religious, social, recreational and seasonal fairs and festivals are held in the district at various places. Fairs and melas play an important role in business transactions. Besides normal activities at a fair, many kinds of trading activities also take place. The details of these fairs have been given in Chapter III ‘People’.

            Cattle Fairs.- The cattle fairs are organised with a view to offer facilities to the traders and farmers, to purchase and sell their cattle. Most of the cattle trade in this district consists of buffaloes, cows, camels, etc. These are held at various places in the district. These fair are of great advantage to the agriculturists as these facilitate the sale and purchase of cattle. These fairs are arranged on different dates every month at different places in the district. Apart from providing marketing facilities to the farmers and encouragement to the breeders these fairs bring handsome income to the authorities concerned in the form of market fee, which is charged 4 per cent of the sale proceeds from the purchaser. The seller of cattle has to pay Rs 10 per head as registration fee.

            In Mansa District Cattle fairs at Mansa, Bareta and Sardulgarh are held monthly and the fair at Budhlada is held twice in a year i.e. in the month of April and December. In addition to above cattle fairs, four cattle fairs at Bareta (in the month of January, March, May and September) and two cattle fairs at Mansa (in the months of February and July) are held every year.

 

            (c) Cooperation in trade

 

(i) Cooperative Marketing

            Keeping in view the malpractices suffered by the cultivators in the marketing of agricultural produce, the need for cooperative marketing was felt by the Government. Consequently, a number of cooperative marketing societies were set up at various places in the district. The cultivators can now store their marketing produce in the godowns of these marketing societies. Previously, they had to dispose it off immediately after harvesting. These societies act as a check against malpractices such as under-weighing, unauthorised deductions and delayed payment by the arhtias. The first cooperative marketing-cum-processing society in the district came into existence at Mansa on 9 February 1960.

            At apex level, the Punjab State Cooperative Supply and Marketing Federation (MARKFED) federates these institutions. The details of cooperative marketing  and  supply  societies  functioning  in  the  district are

 

 

given below:

Serial No

Name of the society

Date of Registration

1

The Mansa Cooperative Marketing-cum-Processing Society Ltd., Mansa

  9 February 1960

2

The Budhlada Cooperative Marketing-cum Processing Society, Ltd., Budhlada

16 October 1960

3

The Bareta Cooperative Marketing-cum-Processing Society Ltd., Bareta

  9 April 1962

4

The Sardulgarh Cooperative Marketing-cum-Processing Ltd Society., Sardulgarh

  5 April 1972

                                    Besides cooperative marketing societies, 164 milk supply societies, 79 weavers societies, 3 farming societies, 6 women societies and 17 housing societies were functioning in the Mansa District during 1999-2000. These societies serve the interests of the farming and other sections of the community in the district in an effective manner.

            The work done by the cooperative marketing societies in the Mansa district during the years 1992-93 to 1999-2000 is given in Appendix IV at page 137.

             (d) State Trading

 

The main objective of the State Trading Scheme is to provide essential commodities to the consumers at reasonable rates. The Food and Supplies Department is engaged in the procurement of foodgrains in order to give support price to the farmers and the distribution of essential commodities in the State. The department has opened purchase centres for the facility of farmers so that they are not to cover a distance of more than 5-6 km to sell their produce. It also ensures that there is no glut in grain markets and the produce is lifted the same day. As on 31 March 2000, there were 338 fair price shops functioning in the district (75 urban and 263 rural). The total quantity of food grains purchased by the Food and Supplies Department under the State Trading Scheme in the Mansa District during 1992-93 to 1999-2000 is given as under:             

                                                    (Metric tonnes)

Year

                      Quantity purchased

                                       Wheat                                     Paddy

1992-93

13,898

  6,399

1993-94

-

14,596

1994-95

41,802

22,134

1995-96

32,342

17,399

1996-97

37,852

20,965

1997-98

43,026

26,920

1998-99

29,147

22,845

1999-2000

18,000

35,000

(Source: District Food and Supplies Controller, Mansa and Statistical Abstract  of Punjab,2000)      

           

(e) Merchants’ and Consumers’ Associations and Organs for

                                    Dissemination of Trade News

 

                 Merchants’ and Consumers’ Associations.-  There is no merchants’ or consumers’ association functioning in the district.       

 

                 Market Intelligence.-  Almost all the daily newspapers disseminate market news to the public. In addition, there are some commercial dailies and periodicals which serve this purpose. The All-India Radio is the most important and effective instrument in this respect. The rates of various commodities in different markets in the State are broadcast daily. In these days some T.V. channels also relay daily market rates of different commodities. Besides, the market news about the rates of commodities are also disseminated to the public through boards displaying rates outside the offices of the market committees. In some of the marketing centres, market news are communicated to dealers at different places through correspondence and trunk calls. The communication of market news is very important for efficient marketing and right coordination of the forces of demand and supply.

 

            (f) Weights and Measures

 

                         There was no uniform use of standard weights and measures till the enforcement of Punjab Weights and Measures Act, 1941. The weights and measures differed not only from state to state but also from district to district in many respects. In order to standardise weights and measures throughout the country, the Government of India passed the Standard of Weights and Measures Act, 1939, which came into force in 1942. Under the Act both the systems were prescribed viz. the Indian-system i.e. tolas, seer and mound and avoirdupois systems i.e. ib., cwts, and tons. The Punjab Weights and Measures Act, 1941 brought some uniformity in the system of weights and measures.

            The square measure was the bighas equal to five eights of an acre. The country kos was about one and quarter miles. Before the enforcement of 1956  Act, the following weights and measures were in common use among the people living in the area of the present Mansa District.

In urban areas                           Maund, 20 seer, 10 seer, 5 seer, 4 seer, 1

                                                seer, chhatank, tolas,mashas and ratis

In rural areas                            2 ½ man (kachcha)                    1 maund

                                                1 ¼ man (kachcha)                  20 seer

                                                1 man (kachcha)                      16 seer

                                                1 dhari (10 seer kachcha)          2 seer

`                                               1 panjseri (5 seer kachcha)        2 seer

                                                2 ½ seer (kachcha)                     1 seer

            The Standard of Weights and Measures Act, 1956 was passed by the Parliament in 1956. The Act was passed by the Government to attain uniformity with the international standards. The legislatures of different States were directed to enact legislation for the implementation of the same. The Act, envisages the uniform system of weights and measures viz. the metric system having the following units of measurement:-

 

            Meter (for length);

 

            Kilogram (for mass);

 

            Second (for time);

 

            Ampere (for electric current);

 

            Kelvin (for thermodynamic temperatures); and

 

            Candelo (for luminous in density)

 

            In November 1958, the Punjab Government enacted the Punjab Weights and Measures (Enforcement) Act, 1958 and in February 1959 notified the rules for its enforcement. From October 1960 the use of metric weights and measures was made compulsory. The use of metric system became obligatory from 1962.

            The system has been adopted wholeheartedly by the people living in rural areas.

           

            (g) Storage and Warehousing

           

            In villages, people store agricultural produce in houses, kothas or in bags. In markets, the commission agents and cooperative marketing societies maintain godowns. Mills and factories maintain godowns at their premises to stock their raw material and finished manufactures. But these godowns were not of desired specifications.

                In order to provide scientific storage facilities to the agriculturists, the Royal Commission on Agriculture in 1928, the Reserve Bank of India in 1944 and the Rural Banking Enquiry Commission in 1950 had emphasised the need for the establishment of a warehousing system for agricultural produce and creation of negotiable papers. It was not until the All India Rural Credit Survey Committee, which again reiterated and recommended in 1954 the concepts of warehousing and it had taken a concrete shape. These recommendations paved the way for enactment of Agricultural Produce  (Development and Warehousing) Corporations Act,1956 ( since replaced by the Punjab Warehousing Corporation Act, 1962) and the establishment of Central and State Warehousing Corporations. Under this Act, warehousing corporations were established in each State. The Punjab State Warehousing Corporation was set up on 2 January 1958. It was reconstituted on 1 November 1967* after the reorganisation of the Punjab State under Section 18 of Punjab Warehousing Corporation Act,1962.

            As on 31 March 2000, the Corporation was running five warehouses at various places in the district. The average capacity and average utilization in each warehouse alongwith year of its opening are given below:

                                                                                                (In metric tones)

Serial No

Name of Centre

Date of opening of warehouses

       Total capacity

Owned       Hired

Total Utilization

Percentage Occupancy

1

Budhlada

1964

25,200

12,150

37,572

101

2

Bareta

1968

20,400

  9,285

30,642

103

3

Bhikhi

1983

18,450

     910

11,846

  61

4

Mansa

 -

    -         

22,800

20,345

  89

5

Sardulgarh           -

    -

  8,550

  8,534

 100

   ( Source : District Manager, Punjab State Warehousing Corporation, Mansa)

           

            The main functions of the Corporation are; to acquire and build godowns and warehouses; to run warehouses for the storage of agricultural produce, seeds, fertilizers and notified commodities; to arrange facilities for the transport of agricultural produce seeds, fertilizers and notified commodities to and from warehouses and to act as an agent of the Government of Punjab for the purchase, sale, storage and distribution of agricultural produce, seeds, fertilizers and notified commodities.

            The scheduled banks make advance to the depositors on the pledge of warehouse receipts according to the credit restrictions of the Reserve Bank of India.

 

 

 

 

 

 

 

 

 

 

 

 

 

______________________________________________________________*(Parliament Act No. 58 of 1962.- Vide Punjab Government Notification No. 1200 (G)- Agri-VIII/55/8602 dated 30 October 1967.

 

                                   APPENDIX I            (Vide page 120)

Banking Offices functioning at various places in the Mansa District as on 31 March 2000

Serial

No.

Name of the Bank

 

Branches

Date of Opening

1

2

 

3

4

1

State Bank of Patiala

1

Mansa (Main branch)

14 June 1927

 

 

2

Mansa (A.D.B)

17 April 1976

 

 

3

Mansa (I.A)

14 November 1970

 

 

4

Khiala Kalan

10 April 1980

 

 

5

Bhikhi

10 April 1980

 

 

6

Jhunir

14 November 1970

 

 

7

Fatta Maluka

  1 July 1978

 

 

8

Sardulgarh

  3 July 1979

 

 

9

Bhainiwala

18 December 1978

 

 

10

Budhlada

29 March 1950

 

 

11

Bareta

  4 November 1935

 

 

12

Baran

27 July 1981

 

 

13

Boha

14November 1970

 

 

14

Ralla

..

II

Punjab National Bank

1

Mansa

  2 May 1953

 

 

2

Bhikhi

  9 June 1969

 

 

3

Hero Kalan

20 April 1983

 

 

4

Sardulgarh

  3 October 1969

 

 

5

Budhlada

24 January 1964

 

 

6

Bareta

22 December 1976

 

 

7

Borawal

24 May 1978

 

 

8

Kulrian

24 May 1978

 

 

9

Mughanian

..

III

State Bank of India

1

Mansa

18 September 1972

 

 

2

Bhaini Bhagha

  8 December 1972

 

 

3

Joga

23 December 1972

 

 

4

Raipur

28 October 1983

IV

Punjab & Sind Bank

1

Sangha

  7 October 1977

 

 

2

Jhanda Kalan

  1December 1983

 

 

3

Bachhoana

28 December 1979

V

Oriental Bank of

1

Mansa

12 February 1993

 

Commerce

2

Budhlada

  8 October 1994

 

 

3

Bareta

17 February 1998

VI

Indian Overseas Bank

1

Mansa

21 October 1974

VII

Canara Bank

1

Mansa

15 March 1996

VIII

The Jammu & Kashmir Bank Limited

1

Mansa

15 May 1998

XI

Faridkot Bathinda

Kshetriya Gramin

Bank

1

Mansa

27 June 1989

 

2

Musa

31 August 1988

 

3

Ubbah

21 April 1989

 

 

4

Phaphre Bhaike

29 March 1988

 

 

5

Bhama Kalan

  5 April 1988

1

2

 

3

4

 

 

6

Sardulgarh

23 June 1989

 

 

7

Budhlada

29 April 1989

 

 

8

Bareta

26 June 1989

X

Mansa Central Co-

1

Mansa

22 May 1957

 

operative Bank Ltd.

2

Bhikhi

31 January 1976

 

 

3

Khiala Kalan

  2 October 1977

 

 

4

Ubbah Burj Dhilwan

  1 March 1980

 

 

5

Phaphre Bhaike

  3 October 1978

 

 

6

Jhunir

  1 June 1978

 

 

7

Sardulgarh

  1 February 1973

 

 

8

Fatta Maluka

  2 October 1977

 

 

9

Jatana Kalan

21 January 1998

 

 

10

Bhama Kalan

  1 March 1980

 

 

11

Bhainiwala

  3 October 1978

 

 

12

Budhlada

29 June 1967

 

 

13

Bareta

21 December 1971

 

 

14

Bachhoana

  3 October 1978

 

 

15

Baran

  3 October 1978

 

 

16

Govindpura

  1 March 1980

 

 

17

Boha

26 April 1987

 

 

18

Biroke Kalan

22 January 1998

 

 

19

Joga

  4 April 1998

 

 

20

Man Bibrian

  3 June 1998

 

 

21

Budhlada (Sugar Mill)

26 May 1990

 

 

22

Bajewala

  3 June 1998

XI

Primary Agricultural

1

Mansa

13 June 1966

 

Land Development Bank

2

Budhlada

28 January 1991

 

 

3

Sardulgarh

28 February 1991

(Source: Chief Manager, Lead Bank, Mansa)

 

 

 

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