Detailed Summary
This section titled Money and Credit dives into the historical journey of money, illustrating how various forms, from barter systems using goods like wheat to modern currency issued by governments, have transformed economic interactions. It points out that modern money is closely tied to the banking system, where currency and demand deposits constitute the money available for transactions.
Demonetization in India serves as a pivotal example to illustrate the shifting landscape of currency, encouraging people to transition towards digital transactions. The role of credit is explored, distinguishing between formal sources (like banks and cooperatives) and informal sources (like moneylenders).
Credit can facilitate economic growth but can also lead to debt traps, especially in vulnerable populations, when mismanaged. Hence, understanding the terms of credit, including interest rates and collateral, becomes crucial. The section concludes with the importance of equitable access to credit through initiatives such as Self-Help Groups (SHGs), aiming to empower the economically disadvantaged, particularly women. Such measures not only provide financial support but also enhance social organization and awareness in rural communities.