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Transition in the Rural Credit Structure of West Bengal: The Case of Murshidabad District

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  • Sudipta Bhattacharyya
  • Nikhil Kumar Mandal

Abstract

This article examines the interlinkages between rural credit and other agrarian structures. The research is based on primary field survey data which is classified on the basis of labor-exploitation criteria and acreage grouping. The research shows that pre-capitalist relations substantially withered away primarily due to state intervention for land and agrarian reform under the Left Front Government. It also found the operation of market mechanisms (instead of personalized relations) in the determination of informal rates of interest and an inverse association with collateral value. This is reflected in the declining value of the weighted average interest rate (WARI) with ascending class status. Furthermore, it found that the WARI without collateral is lower than the WARI with collateral, the latter being confined only to lean seasons and emergency. An incidence of high interest rate is related to low marketable collateral and vice versa.

Suggested Citation

  • Sudipta Bhattacharyya & Nikhil Kumar Mandal, 2021. "Transition in the Rural Credit Structure of West Bengal: The Case of Murshidabad District," Agrarian South: Journal of Political Economy, Centre for Agrarian Research and Education for South, vol. 10(2), pages 210-248, August.
    • Handle: RePEc:sae:agspub:v:10:y:2021:i:2:p:210-248
    DOI: 10.1177/2277976020968319
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    References listed on IDEAS

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    1. Sudipta Bhattacharyya, 2005. "Interest rates, collateral and (de-)interlinkage: a micro-study of rural credit in West Bengal," Cambridge Journal of Economics, Oxford University Press, vol. 29(3), pages 439-462, May.
    2. Bhaduri, Amit, 1973. "A Study in Agricultural Backwardness under Semi-Feudalism," Economic Journal, Royal Economic Society, vol. 83(329), pages 120-137, March.
    3. Basu, Kaushik, 1984. "Implicit Interest Rates, Usury and Isolation in Backward Agriculture," Cambridge Journal of Economics, Oxford University Press, vol. 8(2), pages 145-159, June.
    4. Pradhan, Narayan, 2013. "Persistence of Informal Credit in Rural India: Evidence from ‘All-India Debt and Investment Survey’ and Beyond," MPRA Paper 80381, University Library of Munich, Germany.
    5. Bhaduri, Amit, 1977. "On the Formation of Usurious Interest Rates in Backward Agriculture," Cambridge Journal of Economics, Oxford University Press, vol. 1(4), pages 341-352, December.
    6. Anthony Bottomley, 1975. "Interest Rate Determination in Underdeveloped Rural Areas," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 57(2), pages 279-291.
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