Mangal Ya Dangal: Mithailal and the Spiderweb of Farmers’ Loans

As part of our Yogi ka Ek Saal: Mangal ya Dangal special series, we analyse the farmer loan waive-offs that the Yogi Adityanath government had put into place, right after the new Chief Minister of the state had been voted in.

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70-year-old Mithailal from Kharaunch in Bundelkhand’s Banda district, says that the government can take his life, his land, his home – but he cannot repay the loan that he has against his name.
A year ago, for the first time, he changed his political preferences, and voted BJP. ‘The Samajwadi Party promised loan waivers before and so I thought, when this government promised to waive a lakh, that of course they would. I voted for the Modi government because of this only,’ he admits.
And yet, here he is, crushed under a debt that has nine lives. Mithailal’s life is a sinister, heartbreaking illustration of the callous nexus between political parties and our financial institutions, to keep farmers in acute distress.
According to PK Singh, the manager at the Allahabad Gramin Bank in Naraini Tehsil, where he has an account, Mithailal is not eligible for the Yogi Adityanath government’s waiver of up to a lakh for small and marginal farmers. This despite his five-bigha holding, his cracked and unyielding fields, his subsistence income from contract labour on others’ fields. And he can barely walk. His passbook shows credit and debit entries from February 2015, to October 2016: a loan of 80,000 rupees repaid in October 2016, and immediately renewed. His current outstanding loan is Rs 87,931, a fresh loan which keeps his account from being an Non Performing Asset, but keeps him tightly held in the web of debt. The fine print of the government waiver says if loans have been renewed in 2016, they will not be eligible for waivers.
A shifty local middleman, Rajkiran, reluctant to reveal his current designation, having held both private and banking ‘lending’ roles, illuminated (off the record) the ways in which semi-literate farmers like Mithailal would never really need to interface with the bank at all, leaving their passbooks in capable hands like his. Between political or government decrees, seductive schemes like ‘Kisan Credit Cards’ which provide subsidies on seeds and fertilizer in chronically drought-prone areas (yes, more credit for the credit fugitive), banks, and a zealous and entrepreneurial network of agents, farmers like Mithailal are in thrall to the system of continuous credit.

This story is Part I of an ongoing Three-Part special Mangal Ya Dangal series, on which we’re partnering with Firstpost.  

Yogi ka Ek Saal: Mangal ya Dangal