Rural Credit Policy The peasant became an easy prey to the moneylender
in the absence of state protection in the form of a rural credit policy. In fact,
there existed a credit policy of the government which funded only
microscopic needs of the peasant. Even this was formulated in the wake of a
number of struggles. The widespread riots that took place in 1875 in the
Bombay presidency made even the skeptic authorities of the government
realise the seriousness of the situation. A point to be noted here is that one
could find anti-moneylender elements in many other uprisings in India in the
19th century. Even in the 1857 revolt, the wrath of the peasants was
occasionally directed against the moneylenders. The Santhal Rebellion in the
mid-1850s was of course immediately aimed at the money lending
community.
Government Legislation The Deccan Riots of 1875 led to the legislation
of a series of acts regarding this problem and opening of credit banks. The
Land Improvements Act (1883), the Agriculturists’ Loan Act (1884), the
Deccan Agriculturists’ Relief Act (1879) and Punjab Land Alienation Act
(1902) were some of the acts passed to protect the debtor from the
moneylender and ensure government loans to the peasant. In the 20th
century, quite a number of acts were passed in the legislature on agricultural
indebtedness, like Redemption of the Mortgage Act, 1935; Usurious Loans
Act, 1935; Assam Moneylenders Act, 1934; Punjab Debtors’ Protection Act,
1936; U.P. Agriculturists’ Relief Act, 1934; and U.P. Usurious Loans
Amendment Act (which assured that the rate of interest on secured loans
should not exceed 7%) etc. These acts, which were passed in the wake of
rural unrest, however, were not fool-proof and had several loopholes,
allowing the usurer to continue his ruthless exploitation.
Responsibility of British Policies In this context, one fact should be made
clear regarding the impact of British economic policies on rural indebtedness.
Not that exploiters and exploited were absent in the past, but what happened
was that the character of the relationship between them changed substantially
as a result of British legislation. With the establishment of courts, the
moneylenders who were part of a rural society, secured increased power.
Land became a valuable and saleable commodity. They charged any amount
of interest, and if the tenants failed to pay it, they got the right to grab the