Somnath calls for improved efficiency of financial services

Lok Sabha Speaker Somnath Chatterjee stressed that the social cost must be favourable to the common man in the balance sheet of development planning, reports Saroj Nagi.

Lok Sabha Speaker Somnath Chatterjee stressed that the social cost must be favourable to the common man in the balance sheet of development planning.

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Speaking at the annual day celebrations of the Institute of Chartered Accountants of India (ICAI) in New Delhi, the Speaker said that the ICAI should suggest suitable measures to improve efficiency of financial intermediation and access to financial services in the rural areas and foster linkages between farm and non-farm value addition.

He pointed out that 70 per cent of marginal farmers do not have a bank account and 87 per cent have no access to credit from a formal source.

Since the interest charged on informal borrowings averages about 48 per cent per annum, farmers who depend on such credit are unable to come out of the debt trap.

"The disastrous consequences of such a situation are there for everybody to see," he said, in a thinly veiled reference to farmers’ suicides.