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Wednesday, February 19, 2014

Indian Economy: The Other Side

The Indian economy is in the midst of an unprecedented growth spurt. During the last three years, it grew at about 9% plus, while it was 9.4% during 2006-07. The non-farm sector recorded a growth rate of 10% for the last three years and 11% in the immediate preceding year, as against 6% recorded during the earlier years. The investment rate in the country rose to 35.1% during 2006-07 from a peak of 25% during 2002-03. The domestic savings too have shown a significant rise: they grew by 30% in 2003-04, 32.4% in 2005-06, and 34.7% of GDP during 2006-07. The foreign exchange reserves stood at a comfortable level of $218.5 bn plus. The number of millionaires has grown substantially. Market is awash with liquidity. Interest rates are lying low. Credit supply is at its peak. Indeed, low-cost-credit-driven-consumerism in the urban sector is generating good demand for industrial output. And the future too is looking hunky dory.

Amidst this newfound economic euphoria, there exists another India. In it a farmer gets up at dawn and sets out for his field with his cattle and plough to till the land. He runs around banks to prove his creditworthiness and avail himself of a loan to cultivate cotton crop. If it fails, he goes around local moneylenders and ultimately borrows cottonseed from a neighboring Seth and sows it in his field. He then, like a Chakori bird, longingly awaits the rain clouds to descend with prayer in his eyes.

As the rain gods concede his imploring, and cotton seeds sprout proffering namaskar with their two-folded sprouts, he rushes to his Seth to borrow fertilizer or the bank to borrow money and buy fertilizer and apply to nurture a strong growth in his tender seedlings. Even to celebrate festivals or family events falling in between, he has to rush to his Seth to borrow money.

If nature favors him with good tidings, he would once again borrow money from his Seth/draw money from bank loan account to harvest the crop and make it market-ready. He then carts it to his Seth’s ginning mill to sell it. In turn, the Seth weighs it and passes on the sale proceeds, after religiously recovering his dues with interest at the rate agreed upon earlier. If he is a bank borrower, he clears his bank loan with the balance in his hands.

If, on the other hand, nature fails him, he would have nothing to sell and hence no repayment to Seth/bank. For him and his family, existence then becomes precarious. His struggle to survive becomes ‘vast as night’.

Yet, a farmer rarely “turns his back but marches breast forward.” He never doubts his mitti, soil, in bailing him out of his plight, at least in the succeeding season.   

With ‘a surprising Spirit’ he readies himself for the new season. He once again runs around all and sundry for a fresh loan to raise crops in the new season. With the newly borrowed money, he tills his land and sows the crop. Admiringly, mounting interest on the previous loans cannot deter him from his farming. Such is his trust in ‘hope’.

If the nature and market keep it alive, he marches on into yet another new season. If it fails him, and if the mounting burden of loans overwhelms him, he succumbs to it. The frequently-heard farmers’ suicides are the outcome of this syndrome.

Hearing a farmer’s suicide, the entire leadership of the nation descends on the widow of the farmer ostensibly to share her limitless sorrow with promises of relief. They vent their displeasure at the ‘segmented labor market’ that confines a large section of toiling majority of the society to small-scale farming with which they can hardly eke out their living. They would even clamor for strengthening the social protection for such vulnerable sections of society. While demanding ‘inclusive development,’ they even quote the Father of the Nation: “The economics that disregard moral and sentimental considerations are like waxworks that, being life-like, still lack the life of the living flesh.” As an aside, they would also exhort banks—whether they are equipped for it or not—to give credit to farmers more liberally.
Journalists flood the print and electronic media with features that demonize the ‘appalling inequalities’ in the society as though noticed for the first time and question the ‘trickle down’ theory, arguing that in a country where 70% of the population depends on agriculture—which means on weather—it is preposterous to expect that by the rich becoming even more richer, the destitute will become less destitute.

Economists, not to be left behind, come forward with a theory that other things remaining the same, unless governance intervenes in the vicious cycle of the ‘poor’ remaining poor due to their weak capital formation capacity by injecting fresh capital from outside into the cycle, these farmers can never ever break out of their inherited conundrum.  

Not surprisingly, in the din of all this, the fundamental question of correcting the system inadequacies conveniently gets drowned. The result is: his tribe that is getting crushed between the upper and nether millstones simply becomes a ‘forgotten class’.

Unmindful of all this crass apathy and callousness of the society around, the deceased farmer’s son, like, to borrow Nagnamuni’s simile—Christ carrying the cross—sets out for his farm the next day with a plough on his shoulders faithfully accompanied by his skinny cattle.

For, it is vivifying!

(August, 2007)


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