In their book Poor Economics, development economists Esther Duflo and Abhijit Banerjee list hundreds of “common sense” development projects — crop insurance, food aid, microcredit — that either don’t help poor people or make them poorer. The relationship is highly exploitative and many believe it represents a new colonialism. There was a recommendation at our zonal headquarter in Nagpur that the concerned development officer should be publicly felicitated. Many of the serious problems of farmers and the rural poor are largely a result of our misguided projects that have severely impaired the local ecology, leading to soil degradation, acute shortage of water and resistant pests. Unfortunately, the world’s largest poverty alleviating programme — the Integrated Rural Development Programme (IRDP) — did precisely that. India has long been a testing ground for several Western products, particularly in agriculture and medicine — making the most of loose regulations and genetic diversity of a huge population. Monsanto’s hybrid seeds are just one of many such cases. No effort was made to train masons or create a pool of service agents to ensure proper construction and maintenance. Apart from the borrower, the entire family is deprived of the chance of accessing the formal financial system.
It is done to help cut research costs dramatically for lucrative products to be sold in the West.I remember a village called Visakha in remote Gadchiroli district of Maharashtra where all households falling within an eponymous gram panchayat (comprising about five villages) were covered under the programme. Development practitioners should exercise great caution in introducing and marketing financial services or auto door seal Suppliers agricultural inputs for this class. And after two years, the ghost of National Biogas Plan was haunting the villages like the spectre of drought that sucked hundreds of farmers in its vortex of mass suicides. They cannot accept a loss of face and the subsequent denudation of their privileged positions. The ripple effect of the default status is still worse. Working for the poor does not mean indiscriminately thrusting money down their throats. An entire generation of development literature proliferated with tall promises of wealth out of waste. A painstaking reflection of such interventions needs to be demanded. Poor households live by the edge; they do not have financial surpluses to experiment with any new programme or innovation. What has been done cannot be undone.
The abiding legacy of the programme for India’s poor has been that millions have become bank defaulters for no fault of their own.When conventional wisdom fails and its predictions turn out to be ridiculous and when hopes become cruel illusions, respectable people do not, as a rule, hold up their hands and admit their mistakes. Development experts must have the humility to accept a fault when it becomes convincingly clear that the logic behind a particular strategy is flawed; unreasonable risk in innovation can sometimes have serious consequences for the poor. Even the most meticulous and conscientious managers will make mistakes. Some banks have stretched the definition to include families of those who had stood as a guarantor for the defaulting borrowers. In what was termed a revolutionary idea that would transform India’s hinterland, huge targets were allocated for the installation of biogas plants and soft loans were doled out like hot snacks.Jatropha cultivation was the new bandwagon wherein the Cinderella plant was promised to deliver gold out of barren lands.In one of the banks in Chandrapur, Maharashtra, hundreds of loans were written off as if a mountain of rotten potatoes was ploughed just to clean the balance sheet and get rid of the toxic assets. The National Biogas Plan is the most glaring example of how a top-down approach can play havoc with the life of people whose lot it proposes to improve. We must realise that the poor have already paid a great price for development projects. No one is error-proof. The damage to the economy and ecology of these already fragile societies is now starkly visible.
In case of the bonafide bloomer, big or small, we must be open. There could be a rock-star engineer from a top university who might have invented the sexiest gadget for use in villages; however, they don’t have ecosystems for immediate local servicing of failed products. By manipulating the choices of consumers at the low-income pyramid, they are being disempowered.The loans were written off, but in accordance with the banking norms, the borrowers were no longer entitled to any new loans as they fell into the category of defaulters. They are a good subject for donor-funded research studies. In chasing targets, the quality of lending was completely undermined.Encouraging vulnerable and poor people to take risks raises ethical questions.com. If you have made a mistake, acknowledge it. Especially when it is they, and not the outsider, who will pay the price of failure. The Monsanto evolution has been cited by many experts as the prime driver of farmer suicides.Jatropha cultivation was the new bandwagon wherein the Cinderella plant was promised to deliver gold out of barren lands.A similar monumental failure of alternative energy model was the disastrous end to the National Biogas Plan of India.It is true that social impact and life-improving technologies — mobile phones and Internet, high-yielding seed varieties, modern drip irrigation and low-cost solar-energy grids — have enormous potential to promote human well-being in ways that simply were not possible a few years ago. Construction of a biogas digester.
The proposal was almost carried through when a senior officer with vast experience in grassroots programmes strongly insisted that all such recognitions must wait for two years so that a dispassionate evaluation is possible.The writer is a well-known banker, author and Islamic researcher. Even the distinction between a wilful defaulter and a bonafide defaulter is so blurred that the banks can use their interpretative acumen to use the way it suits them. However, if you are defiant and unapologetic, you are in big trouble. The loss is in terms of “ecosystem service value” — the economic value derived from agricultural products, fresh water, clean air and fertile soil. Today, they find it impossible to rejoin the formal credit sector. The entire programme proved to be a financial tsunami for poor villagers who were left with a legacy of unpaid loans and branded as defaulters. New agricultural practices are being propagated with enticements of extravagant promises. They provide abundant affordable products like solar lanterns, non-electric water filters and smoke-reducing stoves, but often the greater challenge is servicing them in a systematic and scalable way. The first instinct of managers is to try and cover up, pretend it never happened and hope it will go undetected
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