Bomb drops on Indian countryside

Jaideep Hardikar reports on the fallout from explosive economic growth.

Ratnamala Tekam, a widow with her two children in Mangi village, in the cotton producing belt of Vidarbha. Her husband killed himself in March 2009 amid mounting debts, hunger and crop losses.

Jaideep Hardikar

‘We have no right to dream.’

This is what a woman peasant in central India’s cotton-growing regions told me the day after her husband, a marginal peasant farmer, took his own life. His forlorn cotton fields had been wrecked by drought. She was the latest to enter widowhood; her husband the latest to join an ever-lengthening list of rural suicides. Between 1995 and 2010 more than a quarter of a million peasant farmers have taken their own lives in the Indian countryside.

The widow’s pessimism points to a striking contrast. Since 1995, rural Indians have became poorer, even as urban Indians have swelled in material prosperity. As the top 10 per cent grow in unprecedented affluence, the bottom 50 per cent are famished. There are now Fourth, Fifth and Sixth Worlds within the Third World.

As P Sainath, one of India’s frontline commentators, puts it: ‘Inequality is the fastest-growing sector of India.’

We have 24 billionaires with a combined worth of $335 billion – or a third of India’s gross domestic product. At least 836 million Indians live on less than 50 cents a day, according to a 2007 government report. More than 200 million of those get by on half that. Their world is one of perpetual recession.

The lives of so many millions of rural poor were wrecked so severely by economic ‘liberalization’ in the 1990s that the spate of suicides never got discussed at all. The vast majority of rural Indians were consigned to sub-human conditions. The meltdown of the world’s financial system has made little difference to them.

The Reserve Bank of India (RBI) – the central bank – did step in quickly and tightened the screws on the banking system, thanks to its former Governor, Yaga Venugopal Reddy. Today he is praised for the conservatism he was widely criticized for at the time, accused of blocking reform.

About 70 per cent of the Indian banking system is nationalized. Reddy’s contention was that markets are not always right. ‘Given that most Indians still live hand-to-mouth,’ he told the New York Times in 2009, ‘proposals to give freer rein to investors and banks to do as they see fit could backfire.’

The RBI actually did a lot to advance reforms, but resisted changes that would have made India more vulnerable to crises. It’s an irony that the government is today fast-tracking the so-called reforms, handing over publicly controlled resources to the private sector.

Vijiay Jawandhia, a leader of peasant farmers in the Gandhian district of Wardha in the state of Maharashtra, points out that India devalued its currency between 1991 and 2000 as it integrated its economy with global markets. Inflation rose. Organized sectors and civil servants were compensated with higher wages, but not rural Indians.

That was like dropping a bomb on the countryside. Everything, says Jawandhia, went up in that period – the cost of fuel, healthcare, education and producing food – except for the income of peasant farmers. City life has been subsidized, leaving the villages to feed urban affluence.

Is a skewed, high-growth model really better than a slow, sustained, more inclusive and ecologically healthy growth? The answer depends on which of the many worlds you inhabit.

Jaideep Hardikar is a journalist based in Nagpur, India.