Current Economic Statistics and Review For the Week Ended September 15

All-India Debt and Investment Survey (AIDIS)
State and Region-wise Analysis
Part A - Section 6

Introduction

This note is the sixth in a series of notes on all-India debt and investment survey conducted by the National Sample Survey Organisation in 2003 (January-December) along with some other surveys, viz., situation assessment survey of farmers (SAS), land and livestock holding survey (LHS), etc., in their 59^th round.

The earlier four notes mainly dealt with characteristics of households, values of assets, aggregate amounts of debt and debt-asset ratios for various occupational categories and different asset holding classes for all states and also region-wise. The fifth note talked about incidence of indebtedness to different credit agencies.

In this note, it is intended to deal mainly with the estimates of amounts of cash loans outstanding as on 30-06-2002 among different types of households in rural and urban areas, borrowed from different credit agencies for all states and region wise.

Any institution or person from whom any household took cash loan whether for interest or free of interest is treated as a credit agency. Thus, a household borrows money from ‘relatives or friends’ free of interest that household is treated as indebted to ‘relatives and friends’; on the other hand, if the loan is taken on interest then that ‘relatives or friends’ category is treated according to its profession and included under that specified agency.

Credit agencies are mainlyof two types. They are: official or institutional agencies; and traditional or non-institutional agencies.

As per the 59^th survey, there are eight types of institutional agencies. The institutional framework for the supply of credit comprises government, co-op societies/bank, commercial banks including Regional Rural Banks, insurance, provident fund, financial corporation/institution, financial company and other institutional agencies.

As against these, there are seven traditional private or non-institutional credit agencies viz., Llndlord, agriculturist moneylenders, professional moneylenders, traders, relatives and friends, doctors, lawyers and other professionals, and others.

Thus, all borrowings from government through various departments are classified under ‘government’. Borrowings from different types of co-operative institutions such as, primary credit societies, marketing societies, central banks and land development banks, are included under the group ‘co-operatives’. An agricultural moneylender is the one whose income is derived mainly from agriculture and money lending is a subsidiary source of income. On the other hand, the professional moneylender is the one for whom money lending is the principal source of income. Loans from landlords to their tenants are classified under the head ‘landlords’. Loans advanced by landlords to persons other than their tenants, are classified under agriculturist moneylender or professional moneylender, depending on the occupation of the landowner. Loans from ‘relatives and friends’ relate only to interest-free loans given by them.

All-India

According to the NSSO 59^th Round (January-December 2003), there are 203.4 million households in India, having an aggregate amount of debt Rs. 1,76,795 crore as on June 30,2002, thus each household had borrowed an average amount of Rs. 8,694 (Statement 1).

Statement 1: Estimated Amount of Cash Dues of Households
as on 30-6-2002
All-India	Rural	Urban	Rural+
			Urban
1	2	3	4
No.of Households	147.9	55.5	203.4
(in million)	(72.7)	(27.3)	(100.0)
Total Amount of Debt	111468	65327	176795
(in Rs.crore)	(63.0)	(37.0)	(100.0)
Average Amount of	7539	11771	8694
debt in Rs.
Source: see Table 1.

Out of the above total amount, Rs.1,11,468 crore or 63 per cent of the total debt is owed by 14.8 million rural households with each households getting a sum of

Rs. 7,539. Cultivator households forming about 59.7 per cent of total rural households enjoyed a sum of Rs. 81,709 crore or 73.3 per cent of total rural debt (Statement 2 and Table 2). Non-cultivator households forming 40.3 per cent of the total rural households borrowed about Rs. 29,759 crore. Average amount of debt of cultivator households works out to be Rs. 9,261 almost double to that of non-cultivator house holds average debt at Rs. 4,991.

Urban households had cash loan outstanding as on 30-6-2002 to the tune of Rs. 65,327 crore or 37 per cent of the total cash debt from all credit agencies with an average debt of Rs.11,771. Among the urban households, while Self-employed households borrowed Rs. 24,341 crore or 37 per cent of total urban debt outstanding, the household ‘others’ took hold of Rs. 40.977 crore or 63 per cent of total urban debt of Rs. 65,327 crore (Statement 3).

Here it is significant to mention that the borrowings by a household from both institutional and non-institutional agencies are very limited as per 59^th round NSSO survey. It was only 2 per cent in the rural areas and 1 per cent in the urban household that had reported to avail credit advance from both the agencies (Report No. 501, p.19).

The total outstanding cash loan extended by all credit agency as on 30-6-2002 was of Rs. 1,76,794 crore. Out of this amount, a sum of Rs. 1,11,468 crore or 63.0 per cent is lend to rural household and the remaining 37 per cent or 65,327 crore to urban area households (Table 1).

Statement 4: Estimated Amount Disbursed by All Credit Agencies as on 30-6-2002 in Rs.crore
	Rural			Urban			Rural+
	Cultivator	Non-	Total	Self-	Others	Total	Urban
		Cultivator		Employed
Northern Region	14842	3157	17988	2985	3150	6134	24133
	(18.2)	(10.6)	(16.1)	(12.3)	(7.7)	(9.4)	(13.7)
North-Eastern Region	168	100	268	28	82	110	378
	(0.2)	(0.3)	(0.2)	(0.1)	(0.2)	(0.2)	(0.2)
Eastern Region	6970	3215	10185	3159	3734	6893	17078
	(8.5)	(10.8)	(9.1)	(13.0)	(9.1)	(10.6)	(9.7)
Central Region	17896	3361	21257	2559	5369	7931	29189
	(21.9)	(11.3)	(19.1)	(10.5)	(13.1)	(12.1)	(16.5)
Western Region	13840	5811	19652	6829	12288	19120	38772
	(16.9)	(19.5)	(17.6)	(28.1)	(30.0)	(29.3)	(21.9)
Southern Region	27808	13776	41585	9627	15604	25232	66817
	(34.0)	(46.3)	(37.3)	(39.6)	(38.1)	(38.6)	(37.8)
All-India	81709	29759	111468	24341	40977	65317	176794
	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)
Source: Prepared from Table 1 & 3

Amongst the regions, southern region is the most indebted region in all-India. The cash loan outstanding of the households of southern region is the highest at Rs. 66,817 crore or 37.8 per cent of the total all India outstanding cash loans (Statement 4). With in the region, rural households of the southern region had access to 62.2 per cent of the regions total debt as against this that of urban region is 37.8 per cent (Table 3).Andhra Pradesh, with about 38 per cent of the total southern region debt of Rs.66,817 crore had more outstanding debt as compared to other states.

Western region with about 22 per cent of the total all-India debt is the second most indebted region. Households of Maharashtra leading the way with a cash loan outstanding of Rs. 25,171 crore as on 30-6-2002.

As on 30-6-2002 out of an estimated 203.4 million households in India 49.1 million or 24.1 per cent households are indebted by borrowing an estimated amount of Rs. 1,76,795 crores from both institutional and non institutional credit agencies. Out of this, 69.2 percent of the total households or 34.0 million households were debtors to non-institutional agencies to the tune of Rs. 64,086 crores or 37.2 per cent of the total, as against this, 25.1 million households or 51.1 per cent of the total households approached the institutional agencies for Rs. 1,12,708 crores or 63.8 per cent of the total households debt needs (Statement 5). This implies in other words that institutional agencies though disbursed more amount than the non-institutional agencies; it is the non-institutional agencies that cater to more people than institutional agencies. Hence average amount of debt by institutional agencies at Rs.44,904 was 2.4 times more than that of non-institutional agencies whose average debt advances was Rs.18,849.

In rural India, the households borrowings from institutional agencies at Rs.63,648 crores works out to be 57.1 per cent of total rural households borrowings of Rs.1,11,468 crores and from non-institutional agencies it was Rs. 47,820 crores or 42.8 per cent. However, in urban areas households’ borrowed from institutional agencies a sum of Rs. 49,060 crore which was more than three times to that from non-institutional agencies (Table 2). It can also be seen from statement 6 that non-institutional agencies are serving more households than the institutional agencies and also their actual lending were also comparable with that of institutional agencies. But in urban areas, institutional agencies, which serve the need about fifty per cent of households, extents loans which forms about 75 per cent of the total urban households’ credit needs.

Statement 6: Estimated Amount of Cash dues of Households as on 30-6-2002
	Rural		Urban
	Institutional Agencies	Non-Insti- Agencies	Institutional Agencies	Non-Insti- Agencies
	Institutional Agencies	Non-Insti- Agencies	Institutional Agencies	Non-Insti- Agencies
1
No.of Households	19.9	22.8	5.2	5.2
(in million)	(46.6)	(53.4)	(50.0)	(50.0)
Total Amount of Debt	63648	47820	49060	16266
(in Rs.crore)	(57.1)	(42.9)	(75.1)	(24.9)
Average Amount of	31984	20974	94346	31281
debt in Rs.
Source: see Table 1.

Relative Position of Different Type of Institutional Agencies

Out of the 8 different type of institutional credit agencies which advances credit in India , 2 credit agencies viz., co-op society/bank and commercial bank including RRB are prominent in extending cash loans to different type of households. These two agencies together lend Rs. 57,741 crore or about 91 per cent of the total rural credit of Rs.63,648 crore and about 67 per cent or Rs. 32,794 crore of the total urban households’ credit of Rs. 49,060 crore (Statement 7).

It can be seen from Table 4a that co-operative socities is the most important institutional agencies in rural India . They lend about Rs.30,431 crore or about 48 per cent of the total Institutional agencies lending of Rs. 63,648 crores. As against this commercial banks lending was only Rs. 27,310 crore or about 43 per cent of the total rural credit. In urban areas, 13,392 crore or 27.3 per cent of total urban credit was extended by co-operative socities as against this commercial banks accommodation were Rs. 19,402 crore or 42.9 per cent of total urban credit by institutional agencies (Table 4b).

All Institutional Agencies

The all India debt from the institutional credit agencies as on 30-6-2002 amounted to Rs.1,12,708 crores with about 57 per cent loaned to rural households and 44 per cent to urban households.

Southern region absorbed more than one-third of the total credit extended by institutional agencies. Cultivator households of southern region enjoy a share 31.2 per cent of the all India cultivator debt. With in the region, Kerala (Rs. 12,090 crore) and Andhra Pradesh (Rs.10,149 crore) have got more households indebted to institutional agencies Table 4).

Households in western region (28.2 per cent) follow next (Statement 8). In western region, households of Maharashtra (Rs.22,734) is the most indebted state. While households in the rural areas of western region borrowed Rs. 10,401 crore , urban household borrowed Rs. 12,333 crore.

Central region’s total debt outstanding was Rs. 18,489 crore or 16.4 per cent of total institutional debt. In central region, while Madhya Pradesh had a cash loan outstanding of Rs. 8,763 crore , Uttar Prades’s institutional debt holding was Rs.7,806 crore.

Northern region with an outstanding institutional debt of Rs. 12,094 crore or about 11 per cent of total institutional debt rank fourth in indebtedness to institutional agencies. In this region Punjab with Rs. 4,061 crore and Rajasthan with Rs. 3,889 crore lead the way in borrowings.

West Bengal with an outstanding debt of Rs. 5,115 crore is the main state which njoys almost 45 per cent of the eastern region cash loan outstanding of Rs. 11,254 crore.

Statement 8: Amount Disbursed by Institutional Credit Agencies as on 30-6-2002 in Rs.crore
	Rural			Urban			Rural+
	Cultivator	Non-	Total	Self-	Others	Total	Urban
		Cultivator		Employed
Northern Region	7234	882	8116	1750	2228	3978	12094
	(14.5)	(6.5)	(12.8)	(10.7)	(6.8)	(8.1)	(10.7)
North-Eastern Region	107	48	155	17	73	91	246
	(0.2)	(0.4)	(0.2)	(0.1)	(0.2)	(0.2)	(0.2)
Eastern Region	4231	1727	5958	2064	3091	5295	11254
	(8.5)	(12.6)	(9.4)	(12.6)	(9.5)	(10.8)	(10.0)
Central Region	11425	1105	12526	1483	4479	5962	18489
	(22.9)	(8.1)	(19.7)	(9.1)	(13.7)	(12.2)	(16.4)
Western Region	11244	4126	15362	5530	10923	16448	31810
	(22.5)	(30.2)	(24.1)	(33.8)	(33.4)	(33.5)	(28.2)
Southern Region	15578	5592	21177	5782	11260	17041	38218
	(31.2)	(40.9)	(33.3)	(35.3)	(34.4)	(34.7)	(33.9)
All-India	49924	13659	63648	16357	32699	49060	112708
	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)
Source: Prepared from Table 4

Functioning of Co-operative Societies/Bank

As on 30-06-2002, the co-operative societies are the most important institutional agencies in lending especially in rural areas. Co-operative societies’ total outstanding advances were Rs. 30,431 crore or 48 per cent of the total institutional rural debt as on the above date (Table 4a) and in urban areas they gave credit of Rs.13,392 crore or 27.3 per cent of total institutional debt. In rural areas, cultivator households are most favoured household with a cash loan outstanding of Rs. 24,676 crore or 49.4 per cent of the total institutional debt to cultivator households as a whole.

A region wise analysis reveals that the households in southern region and western regions are served more by this institution. Seventy four per cent of the co-operative credits were enjoyed by these two regions (Statement 9). Households in Kerala (Rs. 4,537 crores) in southern region and Maharashtra ( 7,405 crore) in western region were the most favoured states among all the states in India . Here, also cultivator households of Maharashtra with a cash loan outstanding of Rs. 6,036 crore top the list among the cultivator households of all the state.

Statement 9: Amount Disbursed by Co-operative Societies as on 30-6-2002 in Rs.crore
	Rural			Urban			Rural+
	Cultivator	Non-	Total	Self-	Others	Total	Urban
		Cultivator		Employed
Northern Region	2677	307	2984	274	378	650	3634
	(10.8)	(5.3)	(9.8)	(5.0)	(4.8)	(4.9)	(8.3)
North-Eastern Region	6	8	14	1	5	6	20
	(0.0)	(0.1)	(0.0)	(0.0)	(0.1)	(0.0)	(0.0)
Eastern Region	1151	350	1500	322	418	795	2295
	(4.7)	(6.0)	(4.9)	(5.9)	(5.3)	(5.9)	(5.2)
Central Region	4341	181	4522	312	480	792	5314
	(17.6)	(3.1)	(14.9)	(5.7)	(6.1)	(5.9)	(12.1)
Western Region	8307	2053	10361	2250	3594	5836	16197
	(33.7)	(35.4)	(34.0)	(41.3)	(45.4)	(43.6)	(37.0)
Southern Region	8156	2847	11011	2344	2964	5308	16319
	(33.1)	(49.0)	(36.2)	(43.0)	(37.5)	(39.6)	(37.2)
All-India	24676	5806	30431	5452	7908	13392	43823
	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)
Source: Prepared from Table 4a & 4b

Scheduled Commercial Banks incl. RRBs

Scheduled commercial bank including RRBs advanced a total sum of Rs. 46,712 crores or 41 per cent of the total institutional finance to all households. Out of this, Rs.27,310 crores (58 per cent) is extended to rural households and Rs. 19,402 crores (42 per cent) to urban households. Out of the Rs.27,310 crore , cultivators’ share forms about 79.0 per cent or Rs.21,489 crore and that of non-cultivator is a mere Rs. 5,803 crore or 21.0 per cent.

Table 4.a. reveals, that, out of Rs. 63,648 crore institutional finance a sum of Rs. 27,310 crore or 42.9 per cent has imparted by Scheduled commercial banks. Cultivator households received a sum of Rs. 21,489 crore or 43.0 per cent of total institutional credit and they also advanced a sum of Rs. 5,803 crore or 42.5 per cent of the total institutional credit to non- cultivator households.

Regionwise, commercial banks favour households of southern region by extending a sum of Rs. 14,436 crore which forms about 30.9 per cent of all India credit of Rs. 46,712 crore (Statement 10). Households in rural Kerala and Andhra Pradesh received more than Rs. 2,000 crores each. Maharashtra in western region is the most preferred state for commercial banks, they extended Rs. 4,532 crore to urban households and Rs.2,567 crore to rural areas. However, this forms hardly 37 per cent and 24 per cent of the rural and urban households institutional debt needs (Table 4a & 4b).

Statement 10: Amount Disbursed by Scheduled Commercial Banks as on 30-6-2002 in Rs.crore
	Rural			Urban			Rural+
	Cultivator	Non-	Total	Self-	Others	Total	Urban
		Cultivator		Employed
Northern Region	3967	537	4503	1120	791	1913	6416
	(18.5)	(9.3)	(16.5)	(13.7)	(7.0)	(9.9)	(13.7)
North-Eastern Region	42	19	62	14	49	63	125
	(0.2)	(0.3)	(0.2)	(0.2)	(0.4)	(0.3)	(0.3)
Eastern Region	2343	937	3281	1548	1060	2452	5733
	(10.9)	(16.1)	(12.0)	(18.9)	(9.4)	(12.6)	(12.3)
Central Region	6525	691	7212	818	2233	3051	10263
	(30.4)	(11.9)	(26.4)	(10.0)	(19.9)	(15.7)	(22.0)
Western Region	2499	1719	4218	2529	2491	5020	9238
	(11.6)	(29.6)	(15.4)	(30.9)	(22.2)	(25.9)	(19.8)
Southern Region	6065	1805	7886	2353	4197	6550	14436
	(28.2)	(31.1)	(28.9)	(28.8)	(37.4)	(33.8)	(30.9)
All-India	21489	5803	27310	8178	11228	19402	46712
	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)
Source: Prepared from Table 4a & 4b

Different Type of Non-Institutional Agencies and their importance

Out of the 7 type of non-institutional credit agencies already mentioned above, 3 credit agencies viz., agricultural moneylenders, professional moneylenders and relative and friends are the main players in the credit scene in India .

These three agencies together lend Rs. 55,085 crore or about 31 per cent of the total advances of Rs.1,76,795 crore or 86 per cent of total non-institutional agencies lending (Statement11).

Professional moneylender with an aggregate lending of Rs. 30,471 crore or 17.2 per cent of total credit agencies cash loan outstanding of Rs.1,76,795 crore is the prominent agency in non-institutional finance. Relatives and friends has financed to the tune of Rs. 12,879 crore or 7.3 per cent and Agricultural money lender by advancing a sum of Rs. 11,735 helped in financing 6.6 per cent of the credit agency advances.

Statement 11: Outstanding Cash Loans disbursed by Non-Institutional Agencies as on 30-6-02
Rs. crore
	Rural			Urban			Rural +
	Cultivator	Non-	All	Self-	Others	All	Urban
		Cultivator		Employed
All-Credit Agencies	81709	29759	111468	24341	40977	65327	176795
	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)
Non-Institutional	31785	16100	47820	7984	8277	16266	64086
	(38.9)	(54.1)	(42.9)	(32.8)	(20.2)	(24.9)	(36.2)
Agricultural Moneylender	8089	3035	11147	536	82	588	11735
	(9.9)	(10.2)	(10.0)	(2.2)	(0.2)	(0.9)	(6.6)
Professional Moneylender	13809	8035	21848	4235	4385	8623	30471
	(16.9)	(27.0)	(19.6)	(17.4)	(10.7)	(13.2)	(17.2)
Relatives & Friends	5066	2916	7914	2118	2827	4965	12879
	(6.2)	(9.8)	(7.1)	(8.7)	(6.9)	(7.6)	(7.3)
Source: Prepared from Table 5 ,5a and 5b)

Non-Institutional Agencies – Regionwise appraisal

Statement 12 : Amount Disbursed by Non-Institutional Agencies on 30-6-2002 in Rs.crore
	Rural			Urban			Rural+
	Cultivator	Non-	Total	Self-	Others	Total	Urban
		Cultivator		Employed
Northern Region	7605	2274	9879	1235	912	2147	12026
	(23.9)	(14.1)	(20.7)	(15.5)	(11.0)	(13.2)	(18.8)
North-Eastern Region	60	52	113	11	9	19	132
	(0.2)	(0.3)	(0.2)	(0.1)	(0.1)	(0.1)	(0.2)
Eastern Region	2739	1488	4226	1252	643	1598	5824
	(8.6)	(9.2)	(8.8)	(15.7)	(7.8)	(9.8)	(9.1)
Central Region	6471	2256	8732	1334	890	1969	10701
	(20.4)	(14.0)	(18.3)	(16.7)	(10.8)	(12.1)	(16.7)
Western Region	2597	1685	4289	1299	1364	2673	6962
	(8.2)	(10.5)	(9.0)	(16.3)	(16.5)	(16.4)	(10.9)
Southern Region	12230	8184	20408	3845	4344	8191	28599
	(38.5)	(50.8)	(42.7)	(48.2)	(52.5)	(50.4)	(44.6)
All-India	31785	16100	47820	7984	8277	16266	64086
	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)
Source: Prepared from Table 5

It can be seen from statement 12 that non-institutional agencies on an all-India basis advanced Rs. 64,086 crore which forms about 37.2 per cent of the total credit agency accommodation as on 30-6-2002.

Out of this southern region got the major chunk of Rs. 28,599 crore or about 45 per cent of the total non-institutional credit. Northern region went to this type of credit agencies for about 19 per cent or Rs. 12,026 crore of their credit needs. Non-Institutional agencies financed 16.7 per cent of the borrower demand of the household of central region by funding Rs. 10,701 crore. Compare to this, the lending to households of the eastern region and western region and north -eastern region are very minimal.

Professional Moneylender

Professional moneylender is one of the important credit agency in financing of households in all-India. This agency advanced a sum of Rs. 30,471 crore or 47 per cent of all credit agency lending.

Among the regions, households in the southern region is the most indebted to professional moneylenders with an outstanding cash loans of Rs. 15,849 crore or 52 per cent of the total institutional agencies. The households of northern region and central region follows southern region (Statement 12).

Statement 13 : Amount Disbursed by Professional Moneylender as on 30-6-2002 in Rs.crore
	Rural			Urban			Rural+
	Cultivator	Non-	Total	Self-	Others	Total	Urban
		Cultivator		Employed
Northern Region	3298	846	4145	473	528	999	5144
	(23.9)	(10.5)	(19.0)	(11.2)	(12.0)	(11.6)	(16.9)
North-Eastern Region	33	30	64	5	2	7	71
	(0.2)	(0.4)	(0.3)	(0.1)	(0.0)	(0.1)	(0.2)
Eastern Region	1146	742	1883	334	191	462	2345
	(8.3)	(9.2)	(8.6)	(7.9)	(4.4)	(5.4)	(7.7)
Central Region	3298	873	4166	49	439	939	5105
	(23.9)	(10.9)	(19.1)	(1.2)	(10.0)	(10.9)	(16.8)
Western Region	635	443	1081	600	263	859	1940
	(4.6)	(5.5)	(4.9)	(14.2)	(6.0)	(10.0)	(6.4)
Southern Region	5408	5065	10472	2493	2891	5377	15849
	(39.2)	(63.0)	(47.9)	(58.9)	(65.9)	(62.4)	(52.0)
All-India	13809	8035	21848	4235	4385	8623	30471
	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)	(100.0)
Source: Prepared from Table 5a and 5b

Within the regions, rural households of Tamil Nadu (42.2 per cent of all credit agency finances) and Andhra Pradesh (29.7 per cent) in southern region, Rajasthan ( 32.1 per cent) and Haryana (26.5 per cent)in northern region , Assam (23.8 per cent) in north-eastern region, Bihar (27.8 per cent) in eastern region and Madhya Pradesh (21.1 per cent) in central region were highly indebted to professional moneylenders for their credit needs ( Table 5a)

Similarly in urban households of Tamil Nadu (31.4 per cent) and Andhra Pradesh (24.8 per cent) in southern region, and Rajasthan (33.4 per cent) in northern region were financed profoundly indebted to professional moneylenders ( Table 5b).

Relatives and Friends

Scrutiny of Table 5a and 5b reveals that relatives and friends’ accommodated to the tune of Rs. 7,914 crores or 7.1 per cent of total credit agency advances in rural areas as against Rs. 4,965 crore or 7.6 per cent of all credit agencies finances of Rs. 65,327 crore.

An analysis of the behavioural pattern of the borrowing of households in different regions divulges that both rural and urban households in southern regions are averse to approach relatives and friends for their financial needs.

The rural households in Himachal Pradesh (17.6 per cent), Jammu and Kashmir (26.5 per cent) in northern region; Assam (12.2 per cent) in north eastern region; West Bengal (14.2 per cent) in eastern region; Gujarat (20.5 per cent) in western region were helped by relatives and friends were helpful at the time of their financial needs.

Agricultural Moneylender

Agricultural moneylender is prominent in rural India , but their presence in urban areas was very limited. They financed a sum of Rs. 11,147 crores or 10.0 per cent of all credit agency advances.

Amongst regions, their presence is very high among households of northern region . In northern region they advanced a sum of Rs. 2,817 crore which was about 16 per cent of Rs.17,998 crores, the finances advanced by all credit agencies. Mainly households of Punjab and Haryan were benefited from this credit agencies (Table 5a).

The households of southern region especially that of Andhra Prdesh were assisted by agricultural moneylenders by furnishing a sum of Rs. 4,179 crore or 27.7 per cent of total credit agency accommodation.

Households in Bihar (18.7 per cent) in eastern region aided by agricultural moneylender to a great extent.

Summing up

According to the Indian sugar mills association, the sugar output in the current marketing season, which ended in September 2006, has been estimated to be 26 million tonnes, which is a 35 per cent increase from that recorded last year. Moreover, in the year 2007-08, the association estimates that the output can increase by at least 1 million tonne to over 27 million tonne. However, despite the higher output, sugar exports in the current season stand at 1 million tonne because of the weakening of the international prices by the time the ban on sugar exports was lifted.

According to a notification, the RBI, in agreement with the Micro, Small and Medium Enterprises Development (MSMED) Act 2006, has modified the definitions for micro, small and medium enterprises such as small road and water transport operators (owning a fleet not exceeding 10 vehicles), retail trade (with credit limits not exceeding Rs 10 lakh), among many others. A micro enterprise has been defined as one where the investment in equipment does not exceed Rs 10 lakh; a small enterprise as one where the investment in equipment is more than Rs 10 lakh but does not exceed Rs 2 crore; a medium enterprise as one where the investment in equipment is more than Rs 2 crore but does not exceed Rs 5 crore. For enterprises engaged in the manufacture or production, processing or preservation of goods, a micro enterprise is one where investment in plant and machinery does not exceed Rs 25 lakh and a small enterprise is one where the investment is more than Rs 25 lakh, but does not exceed Rs 5 crore. In a medium enterprise, the investment

Infrastructure

Foreign manufacturers seeking to export cement to India will now have to obtain a licence under the BIS Certification Scheme for their units, from the Bureau of Indian Standards (BIS) to the effect that their manufacturing units conform to Indian standards. Granting a licence by the BIS will be subject to an application made by the exporting manufacturer and a subsequent personal inspection of the factory by a BIS official and satisfactory testing of samples in India . The exporting unit will have to pay one per cent of annual export contract value to BIS as marking fees. This will be over the minimum-marking fee of $2,000. The provisions of the scheme allow BIS to grant a valid licence for up to two years, after the expiry of which a renewal application will have to be filed by the company. BIS has so far certified nine foreign Portland cement manufacturers from Bangladesh and Bhutan . No licence has been granted to anyone from China and Pakistan .

The report of the Comptroller and Auditor General ( Maharashtra ) for 2005-06 has shown irregularities in the working of Maharashtra State Electricity Distribution Company Ltd (MSEDCL). MSEDCL is the main power utility in Maharashtra providing power to almost all the areas of the state excluding Mumbai. The report has pointed out that the T&D (transmission and distribution) losses of MSEDCL were 32.58 per cent as at March 2006 despite the company's commitment in a MoU with the Government of India to bring these losses down to 18 per cent by March 2003. The report has pointed out that as on March 31, 2006, 50.17 lakh low-tension consumer installations were due for checking in 12 distribution circles, however, only 1.47 lakh consumer installations have been checked, that too over the period 2001-06. Faulty meters were to be replaced within three months, but more than 1.22 lakh out of 4.47 lakh in the state have not been replaced for more than a year. The report also say that the rules of computation of penalty framed by the company regarding theft of electricity do not have adequate deterrent effect and are also not in the financial interest of the company.

The shipping ministry, in an effort to streamline the maritime trade industry, and free it from the menace of middlemen involved in clearance of cargo, is planning to incorporate strict penal provisions in the proposed shipping trade practices act. Under the proposed Act, a fine of Rs 2.5 lakh would be charged from the middlemen (known as service providers) who are not registered. The proposed act makes it mandatory for the service providers to get registered after paying a fee of Rs 50,000. The fee for renewal of registration is Rs 5 lakh. Though the customhouse clearing agents are registered with the customs department, freight forwarders and brokers, who form part of the maritime trade supply chain, are not registered entities. Besides, the proposed act also suggests setting up of a multi-member shipping trade practices commission for settlement of disputes between consignors, consignees, and maritime transportation logistics service providers or between persons registered under the proposed act. The proposed Act is expected to be placed before Parliament during the ongoing Budget Session.

The second prototype (PT2) of Saras, the 14-seater light transport aircraft under development, made its maiden flight at the national aerospace labs (NAL), Bangalore . Conceived in the 1980s and sanctioned in 1999, Saras is meant to enter the market as air taxi, air ambulance, cargo or for surveillance. NAL expects that the next version would be ready in 2008 to production standards. It is targeting its flight certification by 2009-end.

Inflation

The annual point-to-point inflation rate based on wholesale price index (WPI) stood at 6.09 percent for the week ended April 07,2007 or at a lower rate of 3.81 per cent during the corresponding week last year.

During the week under review, the WPI rose by 0.4 per cent to 210.8 from 210.0 for the previous level (Base: 1993-94=100). The index of ‘primary articles’ group, (weight 22.02 per cent), rose by 1.4 percent to 218.9 from its previous week’s level of 215.9 mainly due to rise in prices of fruits and vegetables, barley, masur and bajra. The index of ‘fuel, power, light and lubricants’ group (weight 14.23 per cent) rose from 320.1 to 320.5. The price index of ‘manufactured products’ group increased by 0.1 pr cent to 183.5 from 183.4 for the previous week due to rise in food products like ginegelly oil and rape and mustard oil.

The latest final index of WPI for the week ended February 10,2007 has been updated downward The index and variation 209.0 and 6.52 per cent as against 209.2tand 6.63 per cent.

Financial Markets

Bhagwati Banquets & Hotels Limited has tapped the market between April 18 and 25 by issuing 184 lakh shares of Rs 10 each in a price band of Rs 36-40 per share.

Fortis Healthcare Limited has tapped the market between April 16 and 20 by issuing 458 lakh shares in a price band of Rs 92-110 per share. This issue was oversubscribed across all categories.

The market extended its recovery that began early this month on the back of firm global markets, reports of a good monsoon in the offing this year and strong inflow of funds from FIIs.

The 30-share BSE Sensex gained jumped 513.33 points (3.8 per cent), to settle at 13,897.41 in the week ended 20 April 2007, its highest closing in almost two months. The S&P CNX Nifty advanced 166.20 points (4.2 per cent), to 4,083.55, a two-month closing high.

Small-cap and mid-cap stocks extended their recovery. The BSE Small-Cap Index advanced 217.91 points (3.2 per cent), to finish at 6,974.37. The BSE Mid-Cap Index gained 122.58 points (2.1 per cent), to settle at 5,699.08.

Trading for the week began firm, as the Sensex jumped 312 points on Monday. A rally in global markets and forecasts for a good monsoon in India , boosted the bourses. Stock markets of the world hit record peaks on Monday after top policymakers highlighted the strength and improving balance of global economic growth, encouraging already bullish investors to increase their appetite for risk. The G7 leaders said the US economy remained solid despite the weight of a housing slump, while Europe was showing a healthy upswing and Japan 's economic recovery was on track.

Fall in IT stocks pulled the Sensex lower 86 points on Tuesday. IT stocks slipped after the rupee hit its highest level in nine-years.

Firm Asian markets lifted the Sensex 65 points on Wednesday. But the barometer index came off the higher level from an intra-day 155.88 point rise, to 13,762.92, its highest since 23 February 2007.

The market drifted lower on Thursday, reeling under the weakness spread across Asian markets after latest data showed strong GDP growth in China . The Sensex ended 52 points lower. Nevertheless, the barometer index staged a solid intra-day rebound from an initial 248.55 points fall. The strong Chinese GDP data sparked fears of a hike in interest rates in China , which, in turn, raised fears of a sharp fall in emerging markets.

The market returned to its winning ways on Friday, as strong guidance for FY 2008 by IT bigwig Satyam Computer and firm global markets together, propelled the Sensex to a two-month high. The Sensex jumped 278 points.

FIIs stepped up buying after Infosys gave a strong guidance for FY 2008 in dollar terms, putting to rest concerns about the impact of a slowdown in the US on India's IT sector. Their net inflow in three trading sessions, between Monday and Wednesday, aggregated Rs 2076.90 crore. However, foreign funds pulled out a net Rs 73.40 crore on Thursday. Their inflow for April 2007, till Thursday 19 April 2007, totaled Rs 4371 crore.

The Nifty April 2007 futures settled at 4,083, a slight discount of 0.55 points over the spot closing of 4,083.55.

Under the weekly T-Bill auctions, the RBI mopped up Rs.1709.35 crores (MSS worth Rs.209.35 crores) and Rs.2024.16 crores (MSS worth Rs.1000.00 crores) through 91-day T-Bill and 182-day T-Bill. The cut-off yields for the 91-day and 182-day T-Bill were 7.4769 per cent and 7.7487 per cent respectively.

RBI conducted the auction of "7.55 per cent Government Stock 2010" for a notified amount of Rs.3000.00 crores under MSS. The cut-off yield of the security was 8.1652 per cent.

RBI conducted the auction of State Development Loans (SDLs), 2017 for five states for an aggregate amount of Rs.1837.00 crores through a yield-based auction using multiple price auction method. The cut-off yield of the securities was 8.30 per cent for the states of Gujarat, Maharashtra , Mizoram, Nagaland and Rajasthan.

RBI has announced sale (re-issue) of "8.07 per cent Government Stock 2017" for Rs.6000 crores using multiple price auction method on April 27, 2007.

During the week, the weighted average call rates during the period ranged between 7.36 per cent and 15.01 per cent, while weighted average repo rates ranged between 6.12 per cent and 8.81 per cent and the weighted average CBLO rates ranged between 7.19 per cent and 8.65 per cent. The average volumes of Call, Repo and CBLO segments were Rs.18431.78 crores, Rs.5343.42 crores and Rs.16720.95 crores respectively. The daily average outstanding amounts in the LAF (reverse repo) and LAF (repo) operations conducted during the period were Rs.105.00 crores and Rs.16633.00 crores respectively. The weighted average YTM of G.S 2017 8.07 per cent bond was 8.0475 per cent on April 20, 2007 as compared to 8.0396 per cent on April 13, 2007. The 1-10 year YTM spreads decreased by 2 bps to 26 bps.

RBI has permitted commercial banks (excluding regional rural banks) and primary dealers to sell derivative products. The RBI has allowed banks and primary dealers to trade in rupee interest rate derivatives, which includes Interest Rate Swap (IRS), Forward Rate Agreement (FRAs) and Interest Rate Futures, Foreign Currency derivatives and Foreign Currency Forwards, which includes Currency Swap and Currency Option.

Oriental Bank of Commerce has tapped the market to mobilise Rs 500 crore with a green shoe option of Rs 150 crore by issuing lower tier-II bonds and offering 9.95 per cent for 10 years.

The rupee-dollar exchange rate appreciated from Rs 42.74 on April 13 to Rs 41.73 on April 17 but dipped to Rs 42.15 on April 19 and again rose to Rs 41.99 on April 20.

The six-month forward premia closed at 6.49 per cent (annualized) on April 20, 2007 vis-à-vis 5.95 per cent on April 13, 2007.

The Multi Commodity Exchange of India Ltd (MCX) and the Agricultural Futures Exchange of Thailand (AFET) on Thursday announced the signing of a memorandum of understanding (MoU) to explore areas of cooperation that would mutually benefit the exchanges.

The exchanges will work together to explore areas of cooperation and business opportunities with the goal of assisting and benefiting the underlying producers, end-users and investors in their traded products by maximising the application of international best practices for price risk management and exchange operations.

Gramin Suvidha Kendra, a joint initiative of MCX and India Post , was launched last week at the Dhamangoan sub-post office , near Amaravati in Maharashtra .Through this partnership , MCX aims to cater to the demand for market information , warehousing ,advisory and agri-input needs of framers ,through India post’s widespread network across the country .The services offered through this alliance would make it possible for farmers to avail of expert advice on farm related issues, better market price for their product , better warehousing facilities ,funding against warehouse receipts ,quality testing and grading facilities.

There are strong indications that Expert Committee constituted under the chairmanship of Prof Abhijeet Sen to examine the impact of futures trading on price rise in the essentials commodities in recent times may get extension by at least couple of months . The five-member panel was formed to study the impact of forward trading on prices of essential commodities; the committee will suggest ways to minimize impact. It will also examine whether or not futures trading is desirable in shortage economy; and whether Indian agriculture in general , and framers and/or consumers in particular , have benefited in last three years , there will also be recommendations on how to associate farmers with the futures market .

The NCDEX launched three polymer products, namely, polypropylene (PP), linear low density polyethylene (LLDPE) and polyvinyl chloride (PVC) for May, June and July delivery on Monday. The domestic markets for polypropylene, LLDPE and PVC are worth Rs 4,100 crore, Rs 2,500 crore, and Rs 8,000 crore, respectively. Polymer producers, processors, and traders are currently highly vulnerable to volatility in raw material prices and have very little bargaining power against suppliers. The launch of polymer products on the NCDEX would provide the domestic traders a platform to hedge risk for millions of tonnes of transaction conducted on the spot market.

The domestic polymers market was directly linked to the international market and all stakeholders should know the prevailing global prices and the comparative prices in the domestic market. A risk-hedging platform was the need of the hour and it had been fulfilled.

Corporate Sector

Infosys Technologies posted 56.9 percent growth in net profits at Rs 3,856 crore for 2006-07. Revenue for the fiscal increased by over $1 billion, or 45.9%, to $3.1 billion (Rs 13,893 crore). The company declared a final dividend of Rs 6.50 a share, taking the total dividend to Rs 11.50 a share. In the usually lean fourth quarter of a financial year, it reported a 70% rise in net profit to Rs 1,144 crore, aided by a tax gain of Rs 124 crore. Revenue for the quarter jumped 43.8% to Rs 3,772 crore. Infosys reported record profits for a seventh straight quarter.

Tata Steel has agreed to take over Incab Industries--a leading cable producer of yesteryears--at the request of several trade unions of the sick company. Incab is currently under the Board for Industrial & Financial Reconstruction (BIFR).

Tata power is likely to fund its Indonesian acquisition through an offshore special purpose vehicle (SPV) that will be structured on a debt equity ratio of 1:1. Thereby it may need, $650 million of equity infusion and debt worth $650 million.60-70 percent of equity investment would be funded through incremental debt and the rest through internal accruals, non-strategic investment portfolio sale and cash balance.

India

’s third and fourth largest software services exporters, Wipro Ltd, and Satyam Computer Services, maintained the tech momentum started with impressive year-end showings by Infosys and TCS, posting better-than-expected 2006-07 results.

Tech major Wipro had issued 14,000 offer letters across campuses for fiscal 2007-08. Wipro added 14,076 employees in its global IT services business during the financial year 2006-07, including 12,699 employees in IT services and 1,377 employees in BPO. On the other hand, TCS had a gross addition of 32,462 people and Infosys added 30,946 people.

India

is set to overtake Japan as Asia 's largest satellite direct-to-home (DTH) market by 2008. India will also become Asia 's leading cable market by 2010 and the most lucrative pay-TV market by 2015. India is currently the third largest television-viewing market in the world with 66 million households.

Aditya Birla Retail is weighing options to float a real estate fund, in line with the trend where retailers are looking at it as a mode of raising funds to cater to the ever-increasing demand and cost of prime real estate.

Reliance Industries Ltd (RIL) is likely to increase its capex programme by as much as 53 percent this year. A recent report by Lehman Brothers estimates RIL's capex increasing to Rs 27,300 crore in 2007-08 from Rs 17,800 crore in 2006.

Cadila Healthcare Ltd had acquired 100 percent in Tokyo-based Nippon Universal Pharmaceutical Ltd marking its second overseas acquisition, the first being Alpharma France in 2003. The acquisition will provide Cadila critical access to a ready manufacturing and marketing base as well as a strong distribution reach, since Nippon reaches out countrywide to more than 4,000 hospitals and clinics.

HCL Technologies Ltd, a global IT services provider and Riyadh-based Advanced Electronics Company (AEC) an offset program company have entered into an agreement to implement IT projects in Saudi Arabia . Under the agreement AEC and HCL Technologies will jointly work to implement and execute integrated IT solutions and services for business transformation covering both ends of the IT spectrum including systems integration, package implementation, application development and maintenance, IT infrastructure Management and BPO.

The government and the state-owned oil marketing companies (OMCs) Indian Oil, HPCL and BPCL stand to lose Rs 1,250 crore a year with the conversion of Reliance Industries Ltd’s 33-million tonne Jamnagar refinery into an export-oriented unit. As per the estimates of the oil industry and the Petroleum Planning and Analysis Cell, the revenue loss to OMCs on procuring LPG from Reliance under the international competitive bidding (ICB) procedure would work out to be Rs 834 crore a year. The total losses have been estimated at Rs 1,234 crore a year with the share of the central government coming at Rs 400 crore a year. The revenue implications were on three counts, first is the logistics to cost OMCs Rs 525 cr, then Impact of minimum charges with respect to Jamnagar-Loni pipelines is Rs 215 cr and third OMCs will lose Rs 94 cr since actual import cost of LPG will be higher than the landed cost.

Essar Global Limited, through its wholly owned subsidiary, Essar Steel Holdings Limited, has acquired Minnesota Steel LLC, a US-based steel company which controls iron ore resources of over 1.4 billion tonnes. As part of the deal, Essar Steel will invest $1.65 billion in Minnesota Steel to set up an integrated steel plant with an annual capacity of 2.5 million tonne. Construction is expected to begin in the third quarter subject to necessary environmental and regulatory approvals.

Engineering and construction major Larsen & Toubro (L&T) and Japan ’s Toshiba Corporation have signed a memorandum of understanding (MoU) to jointly manufacture power plant equipment in the country. As part of the MoU, a new facility for making turbines for power plants will be set up in central India at an investment of Rs 300 crore.

The cost of the Corus buyout has gone up by another $800 million, the net cost of acquisition is now $12.9 billion, against the $12.1 billion announced earlier. Tata Steel will be contributing about $4.1 billion of the $12.9 billion. To fund that, the company is going to sell shares worth Rs 8,000 crore through a rights issue and a simultaneous non-linked rights issue of convertible preference shares.

The promoters’ holding in RP Goenka controlled power utility CESC will go up to nearly 53 percent from around 41 percent now following the merger of Pathik Retail, the holding company of group retail major Spencer’s, with itself. According to the scheme, shareholders of Pathik will get one share of CESC for every 1.98 shares of Pathik. The total expansion will cost about Rs 1000-1200 crore, which would be funded partly by debt and partly by equity.

The $4 bn Larsen & Toubro Ltd (L&T) and Tokyo-headquartered Mitsubishi Heavy Industries Ltd (MHI) have inked a joint venture (JV) agreement for setting up a manufacturing facility for super-critical boilers. With a capital outlay of around Rs 300 crore, the JV will have a product configuration catering to plant capacities ranging between 500 MW to 1,000 MW. The JV will have its engineering centre in New Delhi and the actual manufacturing is expected to commence in the later part of FY 2008-09.

Telecom majors Ericsson and Nokia are set to bag a $5-billion tender floated by Bharat Sanchar Nigam Ltd (BSNL) for 63.5 million GSM mobile lines.

Essar Global Ltd, the parent of Essar Steel , India ’s third largest steelmaker, has aquired Canada ’s Algoma Steel for an aggregate value of C$1.8 billion. The acquisition will give Essar Steel control of sheet plants that supply North American carmakers like General Motors and Ford. Completion of the deal is expected by June’2007 after it receives support from at least 66% of the shareholders.

Jet Airways, which has acquired 100 percent in competitor Air Sahara for Rs 1,450 crore, would be positioned between a low-fare and a full-service airline and would now be called ‘Jetlite. Jetlite, which will be re-positioned based on the best practices and successful airline models worldwide, will operate as a 100 percent subsidiary of Jet. The two companies, however, will have a consolidated balance sheet. The combined net revenues of the both airlines will be over $2.5 billion by the end of 2007-08.

The consortium of ONGC, British Gas and Reliance Industries Ltd (RIL) will raise the output from Panna-Mukta-Tapti (PMT) fields in the western offshore of the country by 30 percent at an investment of Rs 2,192 crore ($520 million). Gas production will rise from 13 million metric standard cubic metre per day (mmscmd) to 17 mmscmd by August /September’2007. ONGC holds 40% stake in this field while BG and Reliance have 30% each.

State-run Oil and Natural Gas Corporation (ONGC) will invest Rs 18,000 crore for exploration and production of oil and gas in financial year 2007-08. Of the Rs 18,000 crore, about Rs 5,000 crore would be for exploration and the remaining would be for improving recovery from existing fields and developing new ones.

Reliance Industries Limited (RIL) has informed BSE and NSE that the company is going to introduce employee stock options schemes (ESOPs) of 2.87 crore to its eligible employees, exercisable into equal number of fully paid-up equity shares of the company. According to company sources the ESOP of RIL is going to benefit more than 18,000 employees. This is the country’s largest ESOP declared by any Indian oil and gas company.

*These statistics and the accompanying review are a product arising from the work undertaken under the joint ICICI research centre.org-EPWRF Data Base Project.