What is worse, the financial strength of many of the cooperatives has in the last few years been seriously eroded because of the non-recovery of their dues. It is distressing that as at the end of 1970 a sum equal to almost the entire paid-up share capital of the primary agricultural credit societies was locked up in overdues. While commercial banks have been making rapid strides in deposit mobilisation in rural areas, the central cooperative banks have not been able to do much in that direction.
A massive effort is called for, in these circumstances, for the reform and rehabilitation of the cooperative system, if it is to adequately support agricultural development. Even where it is working well, there is scope to develop its activities and spread its benefits to the smallest of the small cultivators. It is on the permanent executives of the cooperatives that the responsibility for such organisational and operational improvements rests. And it is because of this that I so gladly accepted the invitation to be here today to meet some of the executives who have come here for training.
I am glad to note that the Reserve Bank has been doing a great deal to force the pace of the rehabilitation of cooperative institutions by the State Governments concerned. The sooner these institutions are set right, the sooner will their capacity to fill the credit gap be built up. Fortunately, the Reserve Bank is not only in a position to assist with advice but, in suitable cases, where the State Government agrees to supervise the rehabilitation programme and materially to help in the recovery of overdues, it can also give the State Government substantial financial assistance from the Bank's Long-Term Operations Fund. With all these facilities available from the Reserve Bank of India, it is disappointing that the revitalisation of the cooperative credit structure, which is a task resting partly on the shoulders of the State Governments and partly on the cooperatives themselves, is going slowly.