American Recession and India: Vidarbha's perspective

Owing to this huge financial crunch in the market, big corporate houses are going bankrupt. The aftereffects are visible not only in America, but in India as well. Till yesterday the same formula which was a miracle of financial engineering, is today’s devil. The question isn’t that Bush and Manmohan Singh are trying to implement this formula which is itself a failure in the market. Actually, the true problem is zeroing of thinking.

Socialist theory can’t work. The autocratic Russian trend has given up itself before the market and now the theory of market system is failing. Hence the crisis is far more ahead of the recession. The new paradigm is that of the political system where by giving the thinking on a platter, Democracy will be questioned. But what would be this thinking? If the Indian political system is proud of its working and thinks that it’s different from America, then it’ll become important to understand that the Indian system doesn’t fit in the American scenario. However, both are facing the same kind of problems.

Recession in America has brought suicidal tendencies in people. In India, to bring the agricultural economy on track with the market, suicides are happening since ages. The banking system failed in the US and UK or is apparent because of incompetent lessees; this is happening in India since 1991 on the name of farming, industrial development and a lot more.

Maharashtra is considered as the most developed state of our country. To develop Maharashtra industrially in the 80s, in every district various experiments were done on the name of MIDC. In the same scenario for the farmers, the banking infrastructure led to their deaths. The way economic crisis in America is threatening its citizens; the same horror was faced by the Vidarbha farmers when the Indian and American economies came closer. The economic sphere of both the countries is different, understanding is the same.

In the past 10 years around 22,000 Vidarbha farmers have committed suicide. However, in the same phase Vidarbha has grown richer with hundredfold businessman. The biggest reason behind this is bankruptcy of industries. Bankruptcy is a profit business for industries and corporate. Hingana, 18 Kms away from the city of Nagpur in Maharashtra is the place where the MIDC was established. Maharashtra Industrial Development Corporation was started in the 80s. Around 200 small and large scale industries were given cheap land and other required infrastructure. By the time the 90s passed, around 90% of the industries declared themselves as bankrupt. The sick industries were given a stamp by the banks which give loans. A good rapport with the bank officials engulfed crores of money. The businessmen who declared themselves as bankrupt didn’t commit suicide. On the contrary, they excelled and even the Govt. didn’t halt. By the end of the 90s, Butibori, a new place 25 Kms away from Nagpur was given to MIDC. This time the land given was meant for around 450 industries. The land in Hingana is now under the captivity of builders.

40% of businessmen became builders themselves whereas 60% of businessmen exploited the land for their personal profits. Hingana’s land was initially cultivated. Then the land was taken away from the farmers on the name of industrial development. Now it has turned into a major concrete forest. The same condition is of MIDC’s Butibori which has been famous not only for its agricultural productivity but also for its orange orchards. The industries are mushrooming at these places. However in Vidarbha the dream of industries cannot be understood with the failing of agriculture. Failing of industries is equivalent to clearing the dues of crores in one go. For instance, Hariganga Alloy and Steel Limited hasn’t repaid a due of around 12.5 crore till date. Prabhu Steel Industry Limited hasn’t paid 9.69 crore and Ravindra Steel has an overdue of 26.31 crore. If we take an estimate of the amount spent by the banks on these industries, it’s around 300 crores. This is up to 31 March 2001. In the past 7 years there has been 200% increase in this overdue.

The RBI’s list of defaulters is unbelievable, according to which the banks have faced a loss of more that 10 lakh crore due to this bankruptcy. Maharashtra’s businessmen class topped the defaulters list with a due of more that 90000 crore. Ironically, none of the businessmen committed suicide when 42 thousand farmers did. During the same time Nagpur was chosen as the international cargo. The land allotted for this purpose was also the agricultural land. Around 500 acres of cultivable land has been covered for this cargo hub. Around 2000 families turned into unskilled labourers from agricultural labourers. 15 Kms away from the main city, the value of this land has increased tenfold.

Nagpur is the fifth state in India in terms of fast development. The cargo hub has created a vision in the eyes of the farmers and has given them a sense that more similar projects will come up. A farmer, whose land has been taken for the cargo hub and the international airport, is happy. A new face of revolution is visible. The farmers are together for increasing the amount of compensation. The old rate of 75, 000 for a piece of land has now become 25 lakhs in the market. Under various projects the rates are somewhere around 50 lakhs per acre. In this situation whether or not the farmers will commit suicide is the question; where farmers know that the agricultural era is on the verge of extinction in the country.

The new time is to be spent under the compensation and relaxations. On roaming in these areas one can know that the residents want information about the PM and the Finance Minister of the country. The culprits behind the suicides i.e. the workers-officers-employees-ministers-police never leave a chance of mentioning Manmohan Singh and Chidambaram. They blame the PM and the FM saying that it was their financial development. India has never had such a famous Prime Minister and Fianance Minister! When a farmer commits suicide, not only his family but the whole village talks about the PM and the FM.

Manmohan and Chidambaram actually do not denote American ideology.
The Indian economy has only given a new mantra of a virtual society inside a true society. The politics is against the autocracy but considers the domination of politicians as Democracy. The concept of making profit at the time of crisis is the brainchild of these politicians. If by using the banking infrastructure, the business class is exploiting the banks, then similarly the politicians play with the lives of the farmers. In Vidarbha, there are 9 ministers from Congress-BJP who develop their own formulas of giving loans. This increases their profit and also makes the farmer a tool for their politics.

The Govt. feared the ICICI bailout. Even the Finance Minister and the RBI came forward to help the private banks. However, making the Govt. banks a victim of politics is far more dangerous than the American system. The Govt. is oblivious. In Vidarbha, 22 rural banks and 16 Govt. banks run under the ministers. In the rural area, in more than 25 public banks the record of loans and bankruptcy are kept by the banks. All this is done by the order of ministers, MPs and MLAs. The banks link themselves for giving loans and establishing industries. The MLAs, MPs and ministers make money out of this and thus accelerate their politics. And the ones for whom the banking system actually works; in spite of getting any aid, their money from the Prime Minister’s Relief Fund is taken away and distributed among the powerful.

The Govt. in Delhi took no time in declaring that the money of the bank account holders and investors is safe; but it didn’t care to know if the farmers have got their relaxation money or not. More than 100 crores was given as relaxation money to the Vidarbha farmers, but got distributed from village to village. In Buldhana district farmers are haplessly trying to get the compensation of around 14 crore, but according to the banks the package has been distributed already. The papers have the signs of those who have taken the money. Only those who had Farmers Credit card were given money. Only 10% of farmers have this credit card.

Ironically, after the policy of Govt. to stop suicides came into existence, the number of cases increased from 46 to 58 deaths per month. In the whole year around 150 small and large scale industries got bankrupt in Vidarbha. But the owners of these industries got even more affluent. This took away more than 250 crores from the banks. The question is regarding Manmohan and Chidambaram’s New Economic Model which itself is giving the Democracy a flipside. How can the American recession beat it?