ABSTRACT
This chapter focuses on exploring access to institutional credit as one of the main economic parameters for the analysis of the existence and perpetuation of social injustice, particularly in the agriculture domain. With the case study of Bihar, it aims to discuss the role of financial inclusion in terms of the diffusion of institutional credit to all classes, castes, and religious minorities. In Bihar, not only is an overwhelming proportion of the population dependent on agriculture, but the entire agriculture sector has been trapped in ‘low income, low investment, low yield trap’. Consequently, the role of institutional credit has evidently been of immense importance. Central Government schemes like the Pradhan Mantri Jan Dhan Yojana (PMJDY) are a step forward; however, they remain far from being a sufficient condition to make financial systems inclusive, particularly with respect to access to institutional credit for economically and socially disadvantaged classes. In this context, addressing the policy gaps, this chapter explores the status of institutional credit in rural Bihar across different socioeconomic groups based on castes, classes, and religion, and how that has been crucial in reiterating the fault lines of social injustice, especially for the demographically marginalised categories. Addressing inequality through an economic lens, we argue in favour of higher provision of institutional credit in the agriculture sector focused on targeted groups and also suggest strengthening decentralised credit delivery mechanisms in order to make institutional credit more accessible for farmers in Bihar.
