(ii) Small-Scale Industries

Small –scale industries have a vital role to play, especially in the context of out urgent need for accelerated industrial growth. Most of the industries in small-scale sector are agro based. Raw material required for these industries is easily available in the district and there is no problem of the marketing of their products. With the emphasis given on the liberalized industrial policy, the Government have given a great deal of importance to the establishment and development of small-scale industries. Even, a number of products have been exclusively reserved for production in the small-scale sector. Small-scale industries generally use power and small machines and employ a few hired labourers and mechanics. The different small-scale industries existing in the Faridkot District during 1992-93 are mentioned below:

(1) Food Products – There were 1,160 units engaged in the production of food products. Out of these a large number of units were flour mills/atta chakies (703) and rice shellers (170). These units gave employment to 5,823 persons and produced goods worth Rs 8,953.30 lakhs. The fixed investment of these units was Rs 2,068.92 lakhs.

(2) Beverages – There were 18 units engaged in the production beverages i.e. soda water. These units gave employment to 55 persons and produced goods worth Rs 8.30 lakhs. The fixed investment of these units was Rs 10.84 lakhs.

(3) Textile and Dyeing– There were 20 units engaged in cotton textile, cotton carding and dyeing in the district. These were set up with capital investment of Rs 2,211 lakhs. These units gave employment to 70 persons and produced goods worth Rs 45.10 lakhs.

(4) Hosiery– This is a pre-partition industry established at Moga in 1936. There were 245 units in the district engaged in this industry. These units produce hosiery goods like knitted woolen products, woolen pullovers, nylon strips, surgical bandages, etc. these units gave employment to 414 persons and produced goods worth Rs 131.20 lakhs. The fixed investment of these units was 86.67 lakhs.

(5) Wood Products– There were 667 units engaged in the production of wooden furniture, boxes and pawas. Set up with a fixed investment of Rs 403.68 lakhs, these units gave employment too 1,874 persons and produced goods worth Rs 389.60 lakhs.

(6) Paper and Printing– There were 137 units engaged in the production of paper bags, card board boxes, printing of stationery, etc. The fixed investment involved in these units amounted to Rs 158.23 lakhs. These units gave employment to 509 persons and produced goods worth Rs 147. 80 lakhs.

(7) Leather and Leather Products– This is an important industry of the district. There were 1,143 units engaged in the production of leather and leather goods i.e. leather shoes, attaché cases, leather bags, etc. Set up with a capital of fixed investment of Rs 116.66 lakhs, these units gave employment to 1,787 persons and produced goods worth Rs 204.30 lakhs.

(8) Rubber and Plastic Industry– There were 178 units engaged in production of rubber and plastic goods, tyre retreading, candle making, etc. a large number of units were engaged in tyre retreading (76) and candle making (53). These units gave employment to 547 persons and produced goods worth Rs 238.65 lakhs. The fixed investment of these units was Rs 227.00 lakhs.

(9) Chemical Products– There were 171 units engaged in the production of chemicals such as ferrous sulphate, zinc sunphate, paints, varnishes, potassium nitrate, cotton-seed oils, drugs, washing soap, etc. out of these, 115 units were engaged in washing soap making. These untis gave employment to 840 persons and produced goods worth Rs 595.65 lakhs. The fixed investment of these units was 390.22 lakhs.

(10) Mineral Products– There were 303 units engaged in the production of mineral products and manufacturing of bricks, optical glass, lime, marble slab cutting, cement jallies, etc. there were 208 brick kilns in the district during 1992-93. The units gave employment to 7,358 persons and produced goods worth Rs 2,025.80 lakhs and the fixed investment in these units was 633.62 lakhs.

(11) Basic Metal– There were 72 units engaged in the manufacture of basic metal goods. The fixed investment involved in these units amounted to Rs 335.77 lakhs. These units gave employment to 521 persons and produced goods worth Rs 348.00 lakhs.

(12) Metal Products– This is another important industry of the district. There were 850 units engaged in the production of metal goods. These units gave employment to 2,568 persons and produced goods worth Rs 850.65 lakhs. The fixed investment in these units was Rs 614.32 lakhs.

(13) Machinery and Parts except Electrical – The Faridkot District is an important centre  for the production of agricultural implements especially vary much famous for wheat-threshers. The main agricultural implements produced in the district are the wheat-threshers, maize-threshers, rice-shellers and their parts, ploughs of various types, harrows, disc harrows, etc. earlier, Moga was a very important centre for all these items but, now these important centre for al these items but, now these industries have also spread in other towns of the district. There were 619 units engaged in the manufacture of machinery and its parts except electrical, in the district. Out of these, there were 533 units engaged in the manufacture of threshers during 1992-93. These units gave employment to 2,667 persons and produced goods worth Rs 796.00 lakhs and the fixed investment was Rs 448.27 lakhs.

(14) Electrical Machinery and Apparatus —There were 57 units engaged in the manufacture of electrical machinery and apparatus such as power generators, voltaged stablizers, electric motors, storage batteries, electric fans, T.V. equipments, imxer cum grinder, electric transformers, etc. in the district. Set up with a fixed capital investment of Rs 74.66 lakhs, these units gave employment to 237 persons and produced goods worth Rs 93.40 lakhs.

(15) Transport Equipment Parts – There were 112 units engaged in the manufacture of transport equipment such as oil tankers, truck-body and seats, auto parts, cycle parts, cycle stand and carriers, etc. in the district. Moga is very famous for its truck-body building all over the State. These units gave employment to 442 persons and produced units gave employment to 442 persons and produced goods worth Rs 150.35 lakhs. The fixed capital investment of these units was Rs 130.13 lakhs.

(16) Miscellaneous Industry-- There were 31 units engaged in the manufacture of silver jewellery. Sports goods, bones crushing. Painting and art work, etc. in the district. These units gave employment to 83 persons and produced goods worth Rs 32.00 lakhs. The fixed capital investment of these units was Rs 21.58 lakhs.

(17) Repairing and Servicing Units– There were 2,556 units engaged in repairing and servicing in the district. Set up with a fixed capital investment of Rs 741.07 lakhs. These units gave employment to 3,393 persons and provided services worth Rs 653.65 lakhs during 1992-93.

(iii) Cottage and Village Industries

The industries which are carried on in the homes of the artisans assisted by the members of their families are called cottage industries. These industries play an important role in the development of the rural economy and to ameliorate the lot of weaker sections of the rural society. These industries provide part-time job to the agriculturists in the off-season and, thus, help in removing unemployment to some extent. The Government is laying much stress in the growth and development of cottage and village industries in various parts of the State.

The important cottage and village industries in the Faridkot district are Khadi, handicrafts, textiles, handloom, etc. in 1992-93, there were 1,727 units in this sector which employed 5,183 persons and produced goods worth Rs 9,925.90 lakhs. The fixed capital investment in this sector was 1,449.82 lakhs.

(1) Handloom – There were 1,035 units in the district engaged in handloom-weaving with an investment of Rs 101.90 lakhs. These employed 1,483 persons and produced goods worth Rs 168.00 lakhs.

(2) Handicrafts – There were 10 units engaged in the handicrafts with an investment of Rs 0.50 lakhs. These employed 12 persons and produced goods worth Rs 1.20 lakhs.

(3) Cotton Ginning – This is another important industry of the district. There were 103 units engaged in cotton ginning with an investment of Rs 1,076.24 lakhs. These units gave employment to 2,405 persons and produced goods worth Rs 9,399.00 lakhs.

(4) Khadi and Village Industries – There were 215 units in the district engaged in this sector with an investment of Rs 27.68 lakhs. These units gave employment to 461 persons and produced goods worth Rs 50.70 lakhs.

(5) Miscellaneous-- There were 364 units in the district engaged in tailoring, been-keeping, atta chaki, spice grinding, etc. set up with an investment of Rs 243.50 lakhs. These units gave employment to 822 persons and produced goods worth Rs 318.00 lakhs.


(iv) Jail Industries

A few industries viz. carpentary, textile, blacksmithy, durrie & niwar-making, tailoring, poultry, soap-making, dyeing, tent making, ban and rope making, pheny1-making, etc. are being run in the District jail, Faridkot to enable the prisoners to learn different trades. The training provided to prisoners in these trades also proves useful after their release from the jail. The prisoners also get some remuneration for their work done in these different trades. This remuneration is given in the form of coupons known as jail currency. While in jail, the prisoners can provide meager financial help to their dependents or the frugal and hardworking prisoners can encash these coupons at the time of their release.

The total production in the District Jail, Faridkot during the year 1975-76, 1980-81 and 1985-86 to 1992-93 is given below:


Production (Rs)






















(Source: Superintendent, District Jail, Faridkot)


(h) Role of Industrial Co-operatives

Co-operatives have played a significant role in the economic development of the State. This movement has really proved to be a boon for the Industrial as well as agricultural sectors of the State, which have acquired a marvelous achievement in the post green revolution period by availing the co-operative infrastructure. This movement has not only created ample employment opportunities for the unemployed/underemployed rural people but have also encouraged the local enterprise which otherwise would not have been possible.

The role of industrial co-operatives in the development of industries in the basically agricultural district like Faridkot is all the more important because the people there do not invest much in industries. The members of these societies belong to weaker sections of the society sections of the society mainly the weavers, black-smiths, carpenters, tanners, shoe-makers, etc. They are mostly illiterate and require subsistence employment. The State Government has attached great importance to the economic uplift of the artisans.

There is an apex of handloom weavers co-operatives called WEAVCO. This society provided facilities like supply of raw material and marketing of finished goods. It also provides technical know how to the primary weavers societies. Broadly, the activities taken-up by this institution include marketing infrastructure for sale of handloom products produced by the primary handloom societies; providing technical guidance and new designs to the primary handloom societies; providing raw material on prevailing market rates; and providing processing facilities to the primary handloom societies.

In 1992-93, there were 371 co-operative societies in the Faridkot District. These societies re the only source for the poor artisans through which they avail of the facilities such as financial assistance, supply of raw material, technical guidance and marketing of the products. These organizations have improved the economic conditions of the artisans and played an important role in the development and growth of industries in the district.

The particulars regarding the industrial co-operative societies in the district during the year 1975-76, 1980-81 and 1985-86 to 1992-93 are given in the following table: -

                                     (Number)                                  (Rs in lakhs)



































































(Source: Deputy Registrar, Co-operative Societies, Faridkot)


(i) Labour and Employers’ Organisations

Labour Organisations –Labour Organisations are formed to protect the interest of its members against exploitation by the owners. Earlier it was uncommon to think that a worker used to work for specified working hours. No welfare measures were taken. Exploitation of the worker was the accepted norm. Any talk of any reform in wages or working conditions of the worker was despised by the owners. The life of the workers in the erstwhile princely states was worse than his counterparts in the British territory.

The first Act which gave recognition to the right of the worker to combine themselves into a union to secure redress of their grievances was the Trade Union Act, 1926. 

The primary functions of the trade union is to promote and protect the interests of its members. Welfare activities like organizing mutual benefits societies, co-operatives, employment assistance, libraries, games and cultural programmes have been recognized as normal activities of a trade union under the Trade Unions Act, 1926. Since the Independence of the Country, there has been a considerable growth of trade union movement in the Faridkot District. The particulars of trade unions registered under the Indian Trade Unions Act, 1926, functioning in the district are given in Appendix at page 211.

Manufacturers’ Associations – These associations play an important role in the development and growth of industrial in the district. The main functions of these associations is to look after, promote and protect the interests of their respective members. They also help members in the procurement of raw materials, etc. the only active association pertaining to trade and industries is Rice Millers, Association which has bearing on paddy procurement, milling contributing to food stock of State and Central Government.


(j) Welfare of Industrial Labour

Welfare comprises all matters affecting the health, safety, comfort and general welfare of the workman and includes provisions for education, recreation, thrift schemes, convalescent homes, etc. it falls into two categories viz. activities inside the factory or intra-mural welfare work and activities outside the factory or extra-mural welfare work. The various welfare measures included; education, medical aid, maternity benefits, recreation, housing, co-operative societies, grain and cloth shops, provisions of canteens, etc.

The welfare of the industrial labour is mainly of two types, viz. statutory and voluntary. In the first type fall those concessions which are to be provided under law and secondly which are provided voluntarily by the management on humanitarian grounds or other allied and varied reasons. The Constitution itself provides that the State shall endeavour to secure, by suitable legislation or workers-agricultural, industrial and others a living wage conditions or work ensuing decent standard of living and full enjoyment of leisure and social and cultural opportunities. 

For the first time the establishment of canteens in factories was statutorily laid down by the Factories (amendment) Act of 1947. The period subsequent to 1947 also was the framing of laws to promote welfare facilities in several industries. In the Factories act, 1948, the plantation act, 1951, and the Mines Act, 1952, provisions has been made for canteen, crèches, rest shelters, washing facilities, medical aid and for the appointment of Labour Officers, if the industrial establishments covered by them employ the minimum number of workers prescribed. There has been a steady expansion of activities in regard to its content and spirit. Thus, the general economic condition of industrial workers in the district is not below the standard of their counterparts in other districts and there is hardly any variance in wage level of different categories of workman in the district. 




List of Registered Trade Unions in Faridkot District as on 31 March 1995

S. No.

Name of the union

Date of registration


Trade Workers Union, Kot Kapura



Pilot Pole Workshop Workers’ Union, Muktsar

26 July 1988


Baba Vishavkarma Labour Union, Faridkot

18 October 1988


Electrical Labour Union, Moga

2 July 1990

         (Source: Labour Commissioner, Punjab, Chandigarh)










Banking Trade and Commerce


General Credit Facilities


Insurance and Small Saving


Currency and Coinage


Trade and Commerce


Course of Trade


Trade Centers


Co-operation in Trade


State Trading


Merchants and Consumers Associations and Organs for Dissemination of Trade news


Weights and Measures


Storage and Warehousing



(A) Banking and Finance


In the economy of a region, though agriculture and industry are the main sources of production the other infrastructural facilities such as capital, provision of finance, banking and co-operative institutions designed to extend credit and to provide other facilities, also serve as vital factors, distribution of finished goods or the marketing arrangements, through which the goods are taken to the consumers are equally important.

(a) History of Indigenous Banking

The history of banking in Indian is as old as trade. According to Mr. M.L. Tannan, “from time immemorial, the banker has been an indispensable pillar of Indian society. There is a plenty of evidence to show that even prior to the advent of occidental ideas, India was no stranger to the conception of banking. Traces can be found of banking even in the vedic period (about 200 BC) in the form of money lending. Manu also testifies to the existence of Multanis and shroffs, who financed the trade and commerce of the country and also acted as bankers to the then rulers.

The institution of indigenous banking (Sahukars or moneylenders) in this part of the country is as old as anywhere else. This system is still continuing despite the fact that the commercial banks have made a remarkable progress. Agriculture was low paying occupation as the most of the area of the district was unirrigated and the people depended upon the vagaries of nature. The failure of crops, either due to spread of crop diseases or failure of rains were not uncommon. There was no subsidiary occupations in this area. The income of the farmers was very low. The people of the urban as well as rural areas, therefore, had to resort to credit for survival. Like other areas of the State, the need for borrowed money in Faridkot District has been met from indigenous bankers (moneylenders), commercial banks and co-operative credit institutions. Indigenous bankers have been the largest constituent of the Indian banking and credit system, especially before the coming into existence of the modern banking system.

The rural moneylender occupied a very prominent position in the rural economy. He served the agriculturist in a variety of ways by advancing money for purchase of food and other necessities of life, for social and religious ceremonies and for securing agricultural requisites such as seeds, agricultural implements, etc. in times of drought and famine, the agriculturist used to borrow from the moneylender against the security of agricultural lands. 

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.

An effort to tackle the problem of agricultural debt was commenced in the beginning of the present century with the establishment of co-operative credit societies. The Royal Commission on Agriculture recommended the starting of co-operative movement and consequently the Co-operative Societies Act was passed in 1904. It was inadequate to meet the increasing needs of the co-operative movement and to meet the deficiency, the Co-operative movement and to meet the deficiency, the co-operative Societies Act, 1912 was passed. This Act widened the scope of the movement by permitting the registration of secondary societies like non-credit societies and central financing institutions such as central co-operative societies formed for other purposes like consumption, sale, insurance, etc. has been steadily on increase yet the credit side of the co-operative movement continued to occupy the dominant position. Despite the fact that local agricultural condition and the economic habits of the people were not conducive for the spread of co-operative banking, village societies were formed and were financed through the central co-operative banks.

Apart from setting up co-operative agencies, the government regulated indigenous financing through various legislative measures, such as the relief of Indebtedness Act, 1934; Punjab Debtors’ Protection Act, 1936 and Punjab Registration of moneylenders, Act, 1938. Despite various laws, the moneylenders continued to bypass the provisions of these laws. They indulged in various malpractices. Most transactions were either oral or against ornaments. Promissiory notes were obtained for a higher amount than what was actually advanced. Even duplicate accounts were kept. All moneylenders did not obtain licence by getting themselves registered. They did not maintain regular accounts. Though in 1992-93, the number of licenced moneylenders in the district, was a mere two, the money lending work was in fact being done by a large number of persons. Moneylenders, particularly in rural areas of the district continue to be a significant source of credit.

As on 31 March 1993, there were 505 co-operative credit societies in Faridkot District with a membership of 1,72,848.


(b) General Credit Facilities

(i) Indebtedness – Rural and Urban

Before the advent of modern banking which has its roots in the early part of the twentieth century, the private moneylenders, merchants, the affluent and the big landlords were engaged in money lending in their own way. Indebtedness means the amount borrowed by the people from various sources for investment on different items and for consumption. This may be studied under two heads; rural indebtedness and urban indebtedness. The amount borrowed by the rural people from different sources for investment in various fields refers to the rural indebtedness. Such loans are mostly unproductive as these are taken for incurring expenditure on performing ceremonies, orthodox customs, festivals, expenditure on litigation caused due to trivial conflicts, etc. only a little amount of the loans is used for the improvement and development of agriculture such as for the purchase of better seeds, fertilizers and modern agricultural implements or mechanizing farming. The main agencies presently supplying finance to the agriculturists are the supplying finance to the agriculturists are the village moneylenders, arhtias or commission agents in the markets, co-operative societies and commercial banks. The moneylenders still hold the upper hand. On the other hand urban indebtedness refers to the amount borrowed by the industrialists, traders and other business community. Their business needs are met to some extent by the commercial banks, semi-government agencies and private financial institutions. But unlike the rural debt the urban debt is highly productive because mostly the borrowers are either businessmen or industrialists, who borrow either to start new ventures or to expand the existing ones. Thus, this debt results in increasing the income of the borrower and enhance the revenue of State, besides, generating more employment.

Rate of Interest —There is no uniformity of rates of interest so far as private lending is concerned. These very from place to place and depend upon the borrowing and lending position of the parties concerned. 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 co-operative societies advance loans at the lower rates if interest.

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

Since people have become literate and there are adequate banking facilities available to meet their requirements the system of usury has 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 – In recent years, there has been a considerable growth in the number of co-operative credit societies and banks. But the influence of private moneylenders has not waned in the district. The moneylenders charge high rate of interest than other agencies, but still they are popular because firstly, they are very easily approachable, secondly, borrowers have not to undergo red-tapism and thirdly, they sometimes advance loans without any landed security and so borrowers have no fear of attachment of property. In urban areas, some people are lending money at an exorbitant rate of interest. In spite of high rate of interest people take loans from such persons, as it is available to them easily at the time of their needs. 

The private moneylenders and financiers still supply a sizeable portion of rural credit. Their notoriety is not very different from that of their counterparts elsewhere, but they now operate under restrictions imposed by the Punjab Registration of Money-Lender 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. The number of registered moneylenders in Faridkot District as on 31 March 1993 was only two.

(iii) Government and Semi Government Credit Agencies

In an unorganized money market, in addition to Sahukar and moneylenders a good number of non-banking institutions like private finance companies, public sector finance corporations, etc. are lending money in urban areas and in trade centers through branches for trade, commerce, industries, purchase of vehicles, purchase or construction of house, etc by way of hypothecation loans, these institutions on many occasions run parallel banking. These institutions mobilize deposits from the middle class people by offering attractive terms, higher rate of interest and cash prizes, etc. in addition, 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.

The Punjab Financial Corporation was established in 1953, under the State Financial Corporations Act, 1951 for providing medium and long-term loans to medium and small-scale industrial undertakings located in the State of Punjab. It generally grants term loans for creation/acquisition of fixed assets like land building, plant and machinery, provides guarantee against deferred payments for the purchase of capital goods and offers underwriting facility on issue of stock and shares to companies. The corporation also provides financial assistance for setting up of hotels, nursing homes/small hospitals, development of industrial estates and purchase of transport vehicles, etc.          

(iv) Commercial Banks

While will-organized banking and institutional finance would help to develop the economy of a particular region, as a complementary to it, trade, commerce and marketing activities would also develop and influence the economic, social and cultural life of the region. It can be seen in Faridkot also as found in other parts of the State, the banking system has been equipped with new dimensions as a result of changing economic, social and political activities. Since long the banking was efficiently practiced in India, but it has started development on organized and modern lines with the beginning of this 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 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 these are governed by the directives of the Reserve Banks of India. Under Social Control on Banks Scheme, 14 major commercial banks were nationalized in the country in July 1969, the Government of India allowed the setting up of new private banks through its guidelines issued in January 1993. With opening up 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 14 commercial banks operating in the district apart from central co-operative banks, primary agricultural development banks and regional rural banks. The total deposits and advances in the district as on 31 December 1993 amounted to Rs 71,220.06 lakhs and Rs 38,657 lakhs respectively. Banking facilities are available in all the towns and major villages of the district. The average population served by a branch of the commercial banks comes to 1,170 in the district as against the 11,000 on all India basis as on 31 December 1992.

According to the Reserve Banks of India report, the main purpose to implement the Lead Bank Scheme is to coordinate the banking service with service area approach treating the district as one unit. The Lead bank Scheme has helped to reduce the imbalance and inefficiency of banking services. Presently, the Punjab & Sind Bank is functioning as a Lead Bank for Faridkot District. The following commercial banks are functioning in the district as on 31 December 1993: -




Name of the bank

Number of branches


Punjab & Sind Bank



State Bank of India



Punjab National Bank



State Bank of Patiala



Oriental Bank of Commerce



New Bank of India



Central Bank of India



Bank of India



Union Bank of India



UCO Bank



Allahabad Bank



Canara Bank



Bank of Baroda



Indian Overseas Bank



The number of banking offices at various places in the district, as on 31 March 1993 is given in Appendix 1 on pages 237 to 241.

(v) Post Office Savings Banks Account

The post office savings bank in India have been handling the savings bank deposits since 1886. Post Offices are the most important outlets for the savings of the people specially in the interior areas. With the spread of post offices in towns and villages, these savings banks got a wider area of operation. After the Independence 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 account holders in post office savings banks is increasing steadily from year to year. As many as 1,776 persons opened the new accounts in these banks during 1985-86, this number rose to 4,467 during 1992-93. Detail of new accounts opened and the amount deposited in these accounts during the years 1985-86 is given in the table given below:


New accounts opened

Amount deposited in new accounts (Rs)


























(Source: Senior Superintendent of Post Offices, Faridkot Division, Farikdot)

(vi) Co-operative Credit

For a very long period usual sources of short-term finance of farmers were the moneylenders who charged exorbitant rates of interest and resorted to many malpractices to cheat the ignorant and illiterate cultivators. Sir Frederck Nickolson was the first person, who suggested in 1897 that the co-operation in the country should be used as a means of combating rural indebtedness and the supplying of credit and pleaded forcefully its implementation.

The co-operative movement was launched in the country with the passage of the first Co-operative societies Act, 1984. As this Act was found inadequate a new Act was passed in 1912 which gave a fresh impetus to the formation of non-credit societies and central institutions. The co-operative credit societies and central institutions. The co-operative credit structure which was introduced with the enactment of the Co-operative Societies Act, 1912 had undergone many changes and refinements. The co-operative movement in Faridkot was started in 1921.

The passage of Punjab Co-operative Societies Acts of 1954 and of 1961 further gave a fillip to the movement and enhanced its coverage. Co-operative credit occupy a predominant position in the co-operative movement. Among these, the agricultural credit societies constitute the most important part. Agricultural credit is of two types, long –term and short-term. The short-term credit has a sort of federal structure in the State consists of the Punjab Co-operative Bank at the apex level, primary credit societies at village level with central co-operative banks, coming in between at the district level. The long-term credit needs for agriculture sector are met by the primary agricultural development banks.   

During 1992-93, there were 2,179 co-operative societies in the district out of which 505 were co-operative credit societies. Besides, there were two central co-operative banks with 61 branches (including head office), 7 primary agricultural development  banks and 11 regional rural banks in the district during the year 1992-93.

Co-operative Credit Societies – Usually the moneylenders advanced loans and other essential commodities on credit to the borrowers and preferred to but the produce of the latter in lieu thereof at concessional rates. The rate of interest charged by the moneylenders from the borrowers was very high and the price given for their produce was very low. The powers of the moneylenders were curtailed with the passing of Registration of Money-Lenders Act, 1938. The co-operative societies aim at eliminating the moneylenders, as a class.

During 1992-93, there was 505 co-operative credit societies (389 agricultural and 116 non-agricultural) in the district. The agricultural credit societies were to save the agriculturists from the exploitation of the private moneylenders. These societies inculcate the habit of thrift and with that end in view, they mobilize rural savings, so that they were the twin purpose of thrift and credit.

The non-agricultural credit societies eliminate the exploitation of the artisans by the middle men and to help the members in the purchase of raw materials and disposal of finished products, efforts are being made to organize small-scale and cottage industries on co-operative lines. Training, shoe-making and handloom industry have been selected for this purpose. The details pertaining to membership and working of agricultural and non-agricultural co-operative credit societies functioning in the district during 1980-81, 1985-86 to 1992-93 are given in appendix II and III at pages 242 and 243, respectively.


(c) Insurance and Small Savings

Insurance– The life insurance and general insurance business was encouraged by a number of private companies in the areas of this district before the nationalization of the life insurance business. The companies doing insurance business played an important role in tapping a portion of the public savings in the insurance premia. These companies had no regular office in the district only the agents and inspectors of these companies procured business for their respective insurance companies. The life Insurance Corporation of India was formed by Government of India in September 1956. With the establishment of this corporation, it has become the largest single agency doing the life insurance business in the country. Prior to the formation of the district in 1972 the area of the district was covered by the life insurance branches at Moga and Muktsar which were opened on 21 March 1960 and 1 April 1961, respectively. To provide the better services to policy holders, the corporation has opened two more branches in the district, one at Faridkot on 1 April 1974 and other at Malaut in July 1990. In order to intensify the drive for insurance in the district, the corporation appointed Development Officers and Agents at different places. The branch-wise number of Development Officers and Agents working in the district, as on 31 March 1993 is as under:


Number of Development Officers

No. of Agents

















The Life Insurance Corporation of India advance loans to the policy holders, government and semi-government institutions/agencies for different purposes at various rates of interest. 

The following table shows the performance of the Life Insurance District during 1975-76, 1980-81 and 1985-86 to 1992-93: -


Number of policies

Sum assured (Rs in lakhs)
































(Source: Senior Divisional manager, Life Insurance Corporation of India, Jalandhar)

Prior to the nationalization of the General Insurance Companies in 1973, the Life Insurance Corporation had also started the general insurance business with effect from 1 January 1974. All the private general insurance companies were nationalized private general insurance companies were nationalized on 1 January 1973 the General Insurance Corporation was formed at apex level. Under the General Insurance corporation, the general insurance business is done by four companies viz. the Oriental Fire and General Insurance Company Limited, the new India Assurance Company Limited, The National Insurance Company Limited, and the United India fire and General Insurance Company Limited. According to the functioning of these companies the general insurance policies of all types are issued for only one year and these are renewable every year. Under the General Insurance, the risks covered are of three types viz. fire, marine (transportation of goods) and miscellaneous insurance. Under the miscellaneous insurance there are about 20 and al other types of insurance, like fidelity guarantee, aviation insurance, burglary, personal accidents, etc. Cattle insurance has been introduced from 1974.

Small Savings– After the Independence, with a view to inculcating savings habits in the general public and institutions the Central and State Governments have launched various schemes. The Central Government established National savings Organization in 1948. Thereafter, National Savings Organization opened the offices at the district and division level. It is a centrally sponsored scheme and is controlled by the Ministry of Finance (Department of Economic Affairs), Government of India. The National Savings Commissioner, Government of India with his headquarters at Nagpur heads the National Savings Organization and looks after the small savings work in the country. Out of the amount deposited in small savings within the State, two thirds is available to the State Government of India. This is used for developmental activities within the State. A number of steps have been taken at all levels to expand small saving deposits in the State. At the district level, savings committees have been formed and various political parties and social organizations are associated with the movement.

The Directorate of Small Savings have been set up in the State to ensure better coordination between the Central Organization and the State Government. The Director, Small Savings, Punjab, Chandigarh is the head of the State Government Small Savings Department. At the district level, the District Savings Officer is the Coordinating Agency between the Central Organization and the district authorities in the promotion and growth of the movement.

The number of agents who convassed and propagated for the small savings scheme on commission basis in the Faridkot District as on 31 March 1993 was 176.

The gross and net investment during the year 1992-93 in the Faridkot District were 33.15 crores and 9.27 crores, respectively.

National Savings Certificates– The Government of India have released National Savings Certificates Series VIII. An investment in these certificates, entitles an investor income tax exemption under Section 88 of Income Tax Act, 1961. The interests accrues annually but deemed to be reinvested also qualifies for tax rebate under Section 88 of Income Tax Act. Such interest is entitled to exemption under Section 80-L of Income Tax Act. There is no upper limit for investment in these series. These certificates are available in the denominations of Rs 100, Rs 500, Rs 1,000 grows to Rs 2,015 after six years. The annual rate of interest of 12 per cent payable on maturity is compounded six monthly.

Besides, post Office Time Deposits and Post Office Recurring Account Scheme are also in operation.


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