There are two conspicuous signboards that stand along National Highway 34 as it enters Baharampur town in West Bengal’s Murshidabad district. The first is an old, barely legible, rusty government sign that maps out the distance to other settlements in the vicinity. The other is a new, shiny, white board of a leading public sector bank with the names of six of its local branches neatly marked.
Together, these two signboards represent a particular dichotomy in the Union Finance Minister Pranab Mukherjee’s home constituency of Jangipur.
Since Mukherjee took up his position in the finance ministry last year, there has been a profusion of state-owned banks into this region. Over the last six months, 16 bank branches have opened up in Murshidabad, more than three-fourth of these concentrated around the finance minister’s constituency, according to data available with the state level bankers’ committee (SLBC).
From the country’s largest lender, State Bank of India, to some of the smaller banks like, United Bank of India, most banks have opened multiple branches in Jangipur and adjoining areas.
However, it remains questionable whether this much-publicised influx of financial services in the region has brought commensurate growth in jobs and income, which would be necessary for these numerous bank branches to remain commercially viable.
On Sunday, after Mukherjee formally opened yet another bank branch in his constituency’s Raghunathgunj town, local resident Hari Prasad Saha remained unimpressed by the fanfare and festivities.
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“Nothing much has happened here except for lots of banks opening their branches, after Pranab babu became minister. He might have got them (banks) here, but jobs don’t fall from the sky,” Saha dryly remarked.
Local mandarins attest to the fact that employment growth in the area has been negligible.
“There are hardly any private jobs and the situation is hardly any better for government jobs. Recruitment for positions in schools is centralised and we hear the same might happen for police constables, too. Unless there is a miracle, things are unlikely to change,” an employment exchange official said.
So far, only one food park the only big project approved in the area is a mega food park over about 50 acres of land and cost of Rs 165 crore, by the Food Processing and Horticulture Development Corporation Ltd, West Bengal, and Central Warehousing Corporation.
Apart from agriculture, the local beedi-making factories and brick kilns are the major employment opportunities here. Mukherjee has himself said that “Murshidabad is amongst the poorer districts in the country.”
The situation is certainly made worse by the fact that the Centre’s flagship National Rural Employment Guarantee Programme (NREGP) is also floundering in most of the blocks that constitute the Jangipur sub-division.
Only 12 households in the entire sub-division have been given employment for more than 100 days under the scheme in the current fiscal, according to NREGP data. Even employment for more than 50 days under the scheme is rare here.
For instance, in Suti-II block with 10 panchayats under it and 29,261 registered households only 69 households were employed between 31 and 40 days and only 13 households between 41 and 50 days. No households were employed beyond 51 days in the block during the current fiscal, NREGP data states.
The district administration admits that implementing the NREGP has been difficult. “The majority of the blocks are so thickly populated that there is no place to undertake NREGP. Blocks such as Samshergunj and Suti have a high population density. The current achievement is under par,” the Jangipur sub-divisional officer C Murugan explains.
But he adds that bank accounts are of primary importance for the execution of social assistance schemes. “For programmes such as NREGP, it helps the implementation if the beneficiaries have bank accounts. Facilities like kisan credit cards and loans through self-help groups also need bank accounts.”
However, the banks themselves admit most of these initiatives in the hinterland, including opening new branches and the “banking-correspondent” model aimed at promoting financial inclusion, are unlikely to bring profits in the short-term.
“Almost 50 per cent of the country’s population do not have access to financial services. If you are going to reach out to them via any means possible, you can’t make a profit out of it immediately. But if the investments are made now, there are great opportunities in the future,” Union Bank of India Chairman and Managing Director MV Nair said.
Even though the bank will make substantial investments to extending basic financial services to all un-banked villages in the country with a population of over 2,000 by March 2011, it doesn’t expect this initiative to break even before another five years.
Against a net credit target of Rs 952 crore for the entire year, the credit disbursement between April-December 2009 in Murshidabad was Rs 574 crore. In the same period last year, the figure was Rs 419 crore, against a target of Rs 822 crore.
The time-line to profitability, however, is hardly stopping the bank branch deluge in Jangipur. The banks are pinning their hopes on the finance minister to bring in projects.
S K Goel, chairman and managing director, UCO Bank, “We have opened two branches In Murshidabad so far. Another one is slated to open. We don’t have a compulsion to open branches; banks open branches in the finance minister’s constituency with the expectation that many projects would come in the area.”
There are some benefits from the financial services influx in the area, though: 2,97,545 individual bank accounts have been opened this fiscal in Murshidabad district, compared to 98,878 new individual accounts in the neighbouring Maldah district, according to NREGP data.
Subsequently, the amount of NREGP wages disbursed through banks in Murshidabad is more than double that in Maldah.