Monday, September 21, 2015

Ending Debt Cycle Suicides in Telangana

http://www.thehindubusinessline.com/opinion/ending-the-debtsuicide-cycle-in-telangana/article7671053.ece

The State government can take a leaf out of Kerala’s book and enact a law against usury
Recently, the Telangana Agricultural Advisory Forum, consisting of a few university professors and scientists, deliberated on the causes and consequences of the drought and farmer ‘suicides’ in the State. The unofficial number of suicides attributed to farm families is 1,152.
An inquiry into some of the recent suicides reveals an interesting picture. The farmers were not indebted to cooperative credit societies or commercial banks. The case of a farmer in Nalgonda district is typical. He took on lease ten acres of land, dug five bore wells — none of which hit water — incurring huge private debt in the process. On top of this, he cultivated cotton. The crop failed without water, and the debts pushed him to suicide.

Thursday, September 10, 2015

Loan Melas Land Again

file:///C:/Users/dell/Desktop/Business%20Advisor%20-%20September%2010,%202015%20-%20Contributor%20copy.pdf

‘Disasters never come singly but in bundles’. This seems to be the position of PSBs in this country at the moment. They are already in the melting pot of nearly Rs. 6lakh crores. Loan melas seem to have come back with a bang – the Mudra Loan melas. It was mid 1970s that Pujari the then Congress Minister started with the loan melas having seen that this is the greatest opportunity to get crowds at no expense of either the party or the government.

It all started when one of the then enthusiastic regional managers of a public sector bank organized such mela at Anantapur in Andhra Pradesh. The Minister was given an elephant ride with the buglers financed under the DRI scheme walking in front to reach the big maidan for distributing agricultural loans, if I recall right in the year 1979. He could see huge crowds in the ground waiting for his honour to arrive. He was amazed for he knew what it meant: loans and votes without the party having to spend for a single vote. Having tasted the meat would the tiger leave it? He ordered such melas throughout the country.  After the banking sector reforms such melas became history. Several of us thought that those dark days would not revisit the financial sector.