does the priority sector include the marginalized?

the priority sector is a kind of a holy cow- even if a government thinks of rephrasing a line or two in the guidelines, it'd have a war on its hands. from p.sainath to muppala lakshman rao, a vast army of rishis and munis would be up in arms and pens. why? because these weaker sections need to be protected:

2.1.1 Units engaged in the manufacture, processing or preservation of goods and whose investment in plant and machinery (original cost) excluding land and building does not exceed Rs. 5 crore.
2.1.2 Small scale units whose investment in plant and machinery (original cost) excluding land and building is up to Rs. 25 lakh, irrespective of the location of the unit, are treated as Micro Enterprises.
2.2.4 Loans granted by banks to NBFCs for on lending to SSI sector.
3.1 Loans granted to small business and service enterprises such as, Small Road and Water Transport Operators, Small Business, Professional & Self Employed Persons, etc. engaged in providing/rendering of services (which are industry or non-industry related), and whose investment in equipment (original cost and excluding land and building) does not exceed Rs. 2 crore.
3.2 (ii) Advances granted to private retail traders with credit limits not exceeding Rs. 20 lakh.
6.Educational loans should include only loans and advances granted to individuals for educational purposes up to Rs. 10 lakh for studies in India and Rs. 20 lakh for studies abroad, and not those granted to institutions.
6.1Loans up to Rs. 15 lakh, irrespective of location, for construction of houses by individuals, excluding loans granted by banks to their own employees.
1.1 Domestic scheduled commercial banks having shortfall in lending to priority sector target (40 per cent of ANBC or credit equivalent amount of Off-Balance Sheet Exposure, whichever is higher) and / or agriculture target (18 per cent of ANBC or credit equivalent amount of Off-Balance Sheet Exposure, whichever is higher) shall be allocated amounts for contribution to the Rural Infrastructure Development Fund (RIDF) established with NABARD. The concerned banks will be called upon by NABARD, on receiving demands from various State Governments, to contribute to RIDF.

among those prioritized borrowers, do you recognize anyone who makes rs. 20 or less a day? in the rbi guidelines, bunched together with those weaker sections are these weaker sections:

(a) Small and marginal farmers with land holding of 5 acres and less, and landless labourers, tenant farmers and share croppers.
(b) Artisans, village and cottage industries where individual credit limits do not exceed Rs. 50,000.
(c) Beneficiaries of Swarnjayanti Gram Swarozgar Yojana (SGSY).
(d) Scheduled Castes and Scheduled Tribes.
(e) Beneficiaries of Differential Rate of Interest (DRI) scheme.
(f) Beneficiaries under Swarna Jayanti Shahari Rozgar Yojana (SJSRY).
(g) Beneficiaries under the Scheme for Liberation and Rehabilitation of Scavangers (SLRS).
(h) Advances to Self Help Groups.
(i) Loans to distressed urban/rural poor to prepay their debt to non-institutional lenders, against appropriate collateral or group security.

who do you think gets better attention from the banks? most of the second category of borrowers do not even have bank accounts, as i pointed out in this post. only 13% of the most vocal section of the second category (small and marginal farmers) have managed to secure occasional credit from the banks (read the opening paragraph of the 'report of the working group on the competitive micro credit market in india', prepared by the development policy division of the planning commission) until now. how would you rate the chances of anyone from the other sections in the second, real, category of obtaining, say, an occasional loan of rs. 20 or so from a public sector bank?

arjun sengupta's creamy layer

arjun sengupta says 2.4 % of the obcs belong to the 'high income' category.

[check tables 5 and 6 in the paper 'India's Common People: Who Are They, How Many Are They and How Do They Live?' by Arjun Sengupta, KP Kannan and G.Raveendran in the April 15 issue of the Economic and Political Weekly. thanks, prof.swarup].

yes, they actually call it a 'creamy layer'.

there's a catch: all individuals who spend more than rs.2779 a month (as indicated by the household expenditure survey conducted by the nsso, in 2004-05) fall in the high income category, according to the paper. if a family of five, say, spends around rs.14,000 a month on its household needs, should we also assume that its annual gross income is more than rs.2.5 lakhs? (check criteria specified against category VI, which also applies to a lot of other categories of the creamy layer). and if more than one person in the family works, and each of them earns, individually, less than 2.5 lakhs a year, but together bring home more than that, i don't think the creamy layer criteria would apply. so, how many of those families would actually fall in the creamy layer category?

and lastly, the researchers seem to have relied largely on the nsso for population numbers relating to each social category- obcs, muslims, sc/st, and others. how reliable are they?

The methodology followed by the NSSO was something like this: The NSSO volunteer would ask the head of the family whether he belonged to the backward class. If the respondent said yes, then he would record the whole family as the backward class. If he said no, then it would not be recorded. In 1999, many members of backward classes did not know that they belonged to backward classes. Secondly, the NSSO has no knowledge of backward classes. The NSSO has experience in matters like unemployment. But it does not have experience in social dimension, except in the case of the Scheduled Castes and Tribes. So it came up with a figure of 36 per cent. Five years later, the same NSSO has found them to be 42 per cent.

p.s.krishnan, who had worked with the mandal commission, had remarked elsewhere too, in a few of his articles, that the nsso figure would finally reach 52%. and if you check closely (tables 9 & 11, among others), you'll wonder what are so many poorly educated, 'poor and vulnerable' people doing in the coyly titled 'others' category? especially when the indian state seems to guarantee a middle or high income future for 4 out of every 5 college graduates among the upper castes (the major group in the category)? yes, those are backward classes dragged into neighbourhoods they don't belong to. like at the time of elections, when they're herded into trucks to make up the numbers at rallies addressed by people they'd never meet again. now, in this paper, their presence is necessary for making the 'others' seem like common people too.

arjun sengupta's common people remind me of r.k.laxman's common man: in one cartoon, i remember, he looks greatly disappointed by a hike in air fares.