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Waivers,Farmers and Crores

April 3, 2008

Did your mom say, prevention is better than cure?
I am sorry to inform you, but this is so passe.
Yeah, passe. Uncool, dorky or whatever.
A few days back, I was happening to thumb across the newspapers of the day, when I picked up this piece of news.
For the common benefit let me quote:

MUMBAI: India has seen the closure on average of one rural branch of a scheduled commercial bank (SCB) every single working day for the last 15 years.

In the same period, bank branches in urban metros doubled, opening at a rate of more than one every day. The figures muddy government claims of massive increases in rural credit and plans to boost it.

The Reserve Bank of India’s Handbook of Statistics on the Indian Economy (2006-07) shows there were 30,639 rural branches of SCBs in 2007. That is, 4,750 less than the number in 1993. In other words, an average of 26 bank branches shut down each month, or one every working day.

However, branches in metros shot up from 5,753 to 11,826 in the same period. In other urban centres, the number climbed from 8,562 to 12,792 in this period, while also going up in semi-urban locations from 11,356 to 16,214.

Worth noting is the statistic: 26 closure each working day of each month for the last fifteen years.

So much for a ‘phenomenal rise in rural credit’.
But don’t you worry you know, ‘kisaan’, the ephemeral conscience keeper of the otherwise apathetic Indian society, is a lucky lot. It gets a very easy access to an end of all the misery which my friends heap upon the kisaan.
The noose. And a dangling body.

Well before you put all the blame on my friends, the loan sharks/lenders/ pawn broker(or pawan broker), let me ask you one thing,
Who asked your ‘kisaan’ to go and borrow from the ‘pawan’ brokers?

Surely not the FM.

Surely not the balance sheet pouring profit frenetic bankers. And if they commit such foolery, they deserve that.
But don’t you worry, we will continue to close down banks and make the access to capital the toughest thing on earth after manna, and all the while claim that farmer suicide is just an aberration of the numbers.

But yes, come election time, the conscience of the country is again dusted and polished and put on a pedestal.
Ask FM. He is a bit busy these days though. He has drawn too much flak from pesky journalists and media. After all doling out wavers worth 60,000 crores, the zeros have come to haunt him. But we must not forget that FM loves the ‘kisaan’ /’shetkari’/’chasha’ or whatever you want to call him.

And to let the farmer know that he must be part of the great Indian boom there can be ‘n’ number of ways. Something like, ‘mergers’ of two banks, whose branches in a particular district are separated by a hundred miles. So the farmer, has to actually walk, if he can, to the swanky, plush bank which is located eons away to ask for capital.

You know whats his fault?He is a farmer. And you know what should the ideal solution is?

Lend him a rope.[No don’t give him a poison pill. A rope does the job and you can retrieve it back even.]

Apparently for Indian banking diaspora, the old adage of your mom has gone out of the window. We don’t do anything to stop the closure of the banks going on for the last 15 years. Mind you 15 years is a long time. Its enough for one generation to retire and another generation to take hold. But the rural banking system has failed.

And what do you do, when you have to win elections in India? Dole out waivers. At the cost of the government fiscal policy, because our banking community was too busy hedging their profits in the stock market and RBI, the soul keeper was busy patting the growing GDP.

Prevention is not better than cure. Come to think of it, if a problem is not there, then no issues to hark upon, no way to show yourself as the knight in the shining armor and no way to gain sympathy of the public.Way too simple boy! what were thinking all these days?

Vote bank politics, reservations, populist measures are so passe.

Think innovative, boy! Oh yes there is our own kisaan, who are sufferring. What do you do? Apply cosmetics on their wounds to dress it up!

And when the euphoria of an election won, wears away, slap him twice and scrape away the cosmetic from him. How?
Make it infinitely tough to access the free market[ Govt says, its a way to protect him from vagaries of prices]

Make the rural credit system weak and defunct,

Hear to their pleas and turn their back upon them

I remember, before 2003, we used to love seeing monsoons coming. Why? It used to give a fresh lease to the farming community, and thus the Sensex. But now, with the monsoons drained out, the last hope of sustainable development even in the grass root level seems to seep out.

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