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DEVELOPING
RURAL FINANCIAL
SYSTEM
PRESENTED BY
PARAG WAGHODE
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Back Ground
Rural Finance is about providing financial
services for people living in rural areas.
It comprises credit, savings and insurance inrural areas
60% of the countrys population represents rural
sector Main occupation agriculture and allied business
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Importance of Developing Rural
Finance:
Agriculture represents much more to India than a
mere slice of economic pie
Agriculture in India occupies a prime position in
terms of its contribution to GDP
60% of the countrys population represents rural
sector
People in the rural areas have no money and
often tend to go for high-cost borrowings
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Share of agriculture in GDP falling
continuously
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Rural Finance
It includes:
Agriculture Finance: financing agriculture-related activities, such as input supply,
production, distribution and wholesaling, and
marketing.
Microfinance: Financial services (savings,
credit, payment transfers, insurance) for the poor
and low-income people.
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Rural finance comes in three
major forms
SemiFormal
Formal
Informal
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NABARD
pioneer in microfinance programs in India
Providing refinance to lending institutions in rural
areas,
Bringing about or promoting institutional
development,
Evaluating, monitoring and inspecting the client
banks
Policies, planning and operations in the field of credit
for agriculture
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Department of Rural Development
Department under the Ministry of Rural
Development
Provide of several services and programs few are:
Rashtriya Krishi Vikas Yojana
Pradhan Mantri Gram Sadak Yojana
IndiraAwaas Yojana (Rural Housing)
Kisan Credit Card Scheme
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Are the Financial Services/
Programmes are effective enough? Finance is still biggest problem for
development of rural economy despite it being
innovative.
NABARD doesnt undertake direct financing.
SIDBIs lengthy and stringent procedures inhibit
the poor.
RRB is suffering immensely from lack of skills,
incentives and infrastructure support.
The services not reaching needy - Debt
Waiver and Debt Relief Scheme
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Sectoral Share of Rural GDP
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Conclusion
Rural sector is one of the pillars to overall economic
development.
Most of the rural development programmes undertaken thusfar have lacked focus and seem to be misdirected
The crisis of Indias farmers has the potential to derail thecountrys exceptional economic growth
Despite governments efforts over last 62 years, ruraldevelopment in India has not as it was envisaged.
Urgent need for shift in the overall strategy for rural
development.
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REFERENCES
References:
Budget speech of Former Finance Minister P Chidambaram's
Budget 2008-09
Interim Budget 2009-10
The Economics
Times
Economic Survey 2003
Yale Global publication
Websites:
www.ruralfinance.orgwww.ifad.org/ruralfinance
www.nabard.org
www.sidbi.com
www.rural.nic.in
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THANK YOU