Monday, March 06, 2017

Another of Rahul Banerjee's experience

Rahul Banerjee is a IIT Khargur graduate who started working for the tribals soon after his degree in eighties. Since then he has built a base in Alirajpur district of M.P. from agitations ( against the Narmada dam and went to jail a few times for his activities) to building self help groups. At some stage, he married a Dalit day and they continue their work together and some times independently. She is working for Ph.D. And also trying to build a residential school for handicapped tribal children. He makes a living now by writing reports for various organisations on sewage, water management  etc.Some of his experiences are chronicled in a book reviewed here. I have known about his work for about ten years and met him twice, once for about a week and travelled with him in the area of his work with Bhils. He is a deeply read and thoughtful man and also good at practical work from sewage management at home and schools to arranging for wifi and solar power.
Here is one of his recent experiences from his Wall:
"Today, while I was going to the market village in Udainagar to get some steel for the centre we are building on Subhadra's farm, an Adivasi woman I know, hitched a ride. She said she was going to exchange her old brass utensil for a new one. I said that wouldn't take much time so I would go along with her and after she did her exchange we would get the steel also and come back. The old utensil weighed 1.65 kg and the new one she chose weighed 1.85 kg. The merchant who is also a moneylender, as is usual in Adivasi areas, said that she would have to pay Rs 690 over and above the old utensil she was exchanging. All this while I was sitting in the car but since the woman didn't have that much money she came to me and asked me whether I could lend her Rs 200. I asked her what was the price being asked and became suspicious. So I got down and went to the merchant and asked him what the prices of the old utensil and the new utensil were per kg and he said Rs 250 and Rs 450 respectively. I did a quick calculation and found that she would have to pay Rs 520 and not Rs 690 and told the merchant as much. He then said that a tax of 12% would apply on the purchase of the new utensil. This was another red herring because for unbilled transactions throughout india no taxes are paid. Nevertheless I did a net search and found that the VAT in Madhya Pradesh for brass utensils is only 5% and also the price of new brass utensils was only Rs 400 per kg. The merchant then said that the least he could give the utensil for was 600 and the Adivasi woman was ready to give that amount but since she had only Rs 500 she still had to borrow Rs 100 from me. I told her I wasn't going to lend her money so she could get fleeced in this way. She then said that it didn't matter and she would pay Rs 500 and pay the rest Rs 100 later. With that we parted ways with her happy with her brass and I went for my steel!!"

My remarks: There may be various local dependencies for the compromise but my feel is that is how things work at many levels. The moneylender may be making similar payments to banks or local protection rackets. These things build up in chains, act like centrifugal force forcing wealth upwards. That is fine as long as many are not living at subsistence level where any emergency can be disastrous. Perhaps technology enhanced  the centrifugal force until it is difficult enhance it further. That is when artificially inflating asset prices starts taking place and the various indices of inequality start increasing. And things start breaking down somewhere or other.

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