Ideological Violence II

June 24, 2009

Ayyo! Alas! Alamak! My post on ideological violence in Delhi and other cities has provoked controversy in the comments, with various people accusing me of saying that everyday violence provides catharsis, or that I was trying to use twenty years of peace to play down the anti-Sikh riots, or that I was saying that Delhi was better than everywhere else or that Delhi was worse than everywhere else.

People, I was not trying to imply anything with that post. It was purely an observation, and I threw it out in a short blogpost. I did not give much thought to the why’s and wherefores of this. I am now paying the price for writing like Dilip D’ Souza and not stating what is a premise and what is a conclusion. So, to clarify things:

  • I don’t think that the everyday violence necessarily acts as catharsis or prevents large scale violence from happening. The presence of everyday violence and lack of ideological violence in Delhi probably spring from two different reasons.
  • One thing I didn’t write in the original post but mentioned in the comments was that there is mob violence in Delhi but it’s not ideological. Just yesterday a mob ransacked a police station and thrashed the policemen after they gangraped someone inside. In fact the thrashings by mobs happen regularly everytime some rich wanker runs down a kid. And back in the 1990s, when power cuts would go on too long, entire neighbourhoods would get together and start stoning transformers or Delhi Electric Supply Undertaking offices. So yeah, the catharsis thing is definitely untrue – there is mob violence – but it’s retributive, not ideological.
  • I am not trying to say that a high murder and rape rate makes Delhi preferable to places where these are lower but there’s a riot every six months. Or vice versa. That’s just stupid.
  • I am not trying to play down or be apologetic for the anti-Sikh riots.

Now that I’ve given some thought to this issue – I think the reason there’s very little ideological violence in Delhi is that in the other states ideological violence is usually caused by different identity groups jockeying for power and access to government machinery  – or if not directly to grab power, as a show of strength or threat on behalf of political parties.

In Delhi, everyone has access to someone in government somehow. A neighbour or relative or some connection will be anything from a political party member to a minor clerk to an IAS officer. There’s hardly anybody who’s totally excluded from the administrative or political process, and so nobody needs to join a mob to grab the spoils of government. Delhi’s corruption is very democratic. In other states, government servants’ class, caste or language biases could mean that they won’t do your work even if you’re ready to bribe them.

Chhatisgarh, Not Vidarbha

April 22, 2009

Girish Shahane has a post up about how the Huffington Post is panicking over a mass suicide of 1500 farmers in Chhatisgarh:

So, the Belfast Telegraph, which presumably has no correspondents in India, picks up a news item from who knows where, and tacks on a misleading headline. The phrase ‘mass suicide’ gives the impression of a co-ordinated, cult-like act. Strangely, London’s Independent, which does have reporters based in this country, picks up the Belfast Telegraph piece. Then, Huffington Post links on its home page to the Independent’s coverage, and carries a blog post by Mallika Chopra, wellness-guru Deepak Chopra’s daughter, based on the unverified story.

(Shoot First, Mumble Later)

I think the figure of more than 1500 suicides comes from this India Together report, or the original statistics it refers:

“The figure is not only for this year, but Chhatisgarh has remained at the top of the list every year since its inception. 1593 farmers committed suicide in the state last year, according to the data provided by state police to the National Crime Records Bureau,” I said. It means 4 farmers die every day by committing suicide. Moreover, Durg is just behind Raipur, which tops the list amongst the districts of Chhatisgarh in this infamous list. Last year alone, 206 farmers committed suicide in Durg. 

(India Together)

So the over-1500 figure was the total number of suicides in a year. The sub-editor who wrote the headline at the Belfast Telegraph made it sound like a mass suicide, and the impression then spread over the internet. It’s his or her fault.

This is not the first time the Irish have made a mess of things. Last year, despite express instructions to deliver a bouquet of flowers on the 8th of October, they did so on the 6th of October.

Anyhow, returning to the point at hand – farmers dying in Chhatisgarh – the India Together report contains this depressing bit:

Santosh, sitting next to him, said “There is a case pending on my land so I can’t get a loan from the bank. I have taken a loan of Rs.13,000 from the moneylender. Lakhnu also borrowed from the moneylender because the land is still in his father Beturam’s name.So the bank did not give any loan to him this time”.

We pompous and heartless libertarians often talk about the right to property, how allowing farmers to sell their land will allow them to get credit, and why it is more important to create industrial employment than to force farmers to remain stuck in agriculture forever. And we have wishful dreams about how if only we could spread libertarian ideas among the people in power and reinstate the right to property things would be better.

Unfortunately, the bit I quoted just now shows that a policy change won’t be enough. Even if the right to property returned, and farmers could sell their land or mortgage it, you’d need a long hard grind of clearing land disputes, rationalising land registration, and making the rural economy independent enough of both agriculture and real estate development that land ownership doesn’t remain as high-stakes as it is. All these are happening, but none of them are happening as fast as is ideal. Whenever there is change, it’s either done on a large but uneffective scale by the government, or on an effective but tiny scale by some madly committed social entrepreneurs.

And then there was this:

He was worried about the loan of Rs.15,000 he had taken from the moneylender. There is an interest of Rs.5 per month on every Rs.100 and he was worried how he would repay it.

The interest rate of 5% a month sounds usurious and provides ammunition to anybody who wants to demonise moneylenders, but let’s look at this in perspective. Indian moneylenders in the Philippines charge 20% a week, and their customers aren’t driven to destitution. In Mexico, Compartamos customers pay an effective interest rate of 100% annually, and the customers are still pouring in and repaying. It’s about interest coverage and gearing, not about how low or high the interest is – look at the subprime borrowers who were defaulting on interest rates of 7 or 8% per annum.

The massive interest rates which the 5-6 Philippines moneylenders or Compartamos charge presumably don’t pinch that much because their customers are mostly urban, and their incomes can’t swing that much. And there’s always the ability to switch to some other sort of casual labour. But in Chhatisgarh, not so much. Not much industry, not much retail trade. 

On that note, I wonder if the lack of opportunities is due to the Naxal tactic of driving out all the “oppressor” employers. The hotspots for suicides – Vidarbha, Andhra Pradesh, and Chhatisgarh are also the ones with a Naxal problem.

So what we have is not just the single sorrow of dying farmers. It’s a tragedy of three wasted opportunities:

  1. The opportunity to enforce law and order and stop the Naxals from running amok
  2. The opportunity to reinstate the right to property, and back it up with a project to clear titles and free land sales and leasing
  3. The opportunity to create a rural financial system that worked

The UPA spent the last five years not giving a shit about any of these, and going by their manifestos and speeches, the NDA doesn’t give a shit either. As Abhishek Bachchan would say, इसे कहते हैं डिमोक्रेसी.

What an idea, sirji.

Making Roads and Mortgaging Farmland

February 4, 2008

Four months ago, I wrote a post on how allowing the free sale of agricultural land for any use was the best possible move against agricultural distress. My logic in that post was:

  1. Allowing the free and easy conversion of agricultural land for residential, commercial, or industrial purposes creates a liquid market for agricultural land.
  2. The liquid market for agricultural land makes it more acceptable as collateral for lending.
  3. The existence of the liquid market also makes agricultural land more valuable.
  4. Point 2 and Point 3 combine to drive down interest rates and increase the loan amount a farmer can get against his land.
  5. This means that being indebted is not such a problem for farmers.

I now worry that I gave the impression back in October that allowing the sale and conversion of agricultural land was a magic bullet, and that once this happened we would enter a happy agricultural paradise. It isn’t. It’s necessary, but not sufficient. You need other things too. The three most important ones I can think of are:

  1. Farmers actually knowing that they can sell and mortgage their property legally, and knowing what the market rate is. Currently, anybody who wants to buy agricultural land to put up flats or a factory bribes the collector to change the land usage, buys it at a bargain basement rate from the farmer, and then goes ahead and develops it. If land sale is legalised, but the farmer doesn’t know about how much more valuable this makes the land, all that changes is that the developer no longer has to pay a bribe (or as much of one). As I mentioned in the October post, auction sales are a good mechanism to prevent this happening.
  2. Competition in the market for lending. Which means multiple banks lending to rural areas. As things currently stand, I think each Regional Rural Bank has a geographical monopoly on rural banking in its particular region. Discussing how to create viable and competitive rural banking is a blogpost in itself – many blogposts axshully. Maybe later.
  3. The agricultural land needs to be well-connected enough to urban centres that there’s demand for it. Which in turn means rural roads. Rural roads also have the advantage that they make it easier for banks to reach farmers (fulfilling Point 2), and make it easier for multiple land developers to court farmers for their land (fulfilling Point 1).

Happily, this week’s Swaminomics (h/t: Ravikiran) is all about rural roads. Key excerpts:

For every million rupees spent, roads raised 335 people above the poverty line, and R&D 323. Every million rupees spent on education reduced poverty by 109 people, and on irrigation by 67 people. The lowest returns came from subsidies that are the most popular with politicians – subsidies on credit (42 people), power (27 people) and fertilisers (24 people).

For decades, rural roads in India were neglected by most states. Besides, rural employment schemes, starting with Maharashtra’s Employment Guarantee Scheme in the 1970s, created the illusion that durable rural roads could be built with labour-intensive techniques. In practice labour-intensive roads proved not durable at all, and those built in the dry season vanished in the monsoons.

The posts on rural banking and agricultural finance will happen sometime in the future. Work is horrible this month.