Chronic Hunger and Collapsing Banks: India Reels under Modi-Made Disaster

THE deepening crisis of the Indian economy and the absolute collapse of governance are now an undeniable everyday reality. Examples abound on every front, evidences mount in every sphere. Economic crisis is no longer a subject of academic debates that the government can deny with the help of statistical jugglery. From IMF to RBI, every international or Indian institution is daily pointing to India’s declining overall growth rate. But the most damning blow has been India’s continuing fall in the Global Hunger Index ranking. In 2000, at the turn of the millennium, India was ranked 83 out of 113 countries. Two decades later, GHI 2019 has put India at 102 among 117 countries. All our neighbouring countries, China (25), Sri Lanka (66), Myanmar (69), Nepal (73), Bangladesh (88) and Pakistan (94) are now way ahead of India.

What is most worrying is the alarmingly high level of wasting among children under five. At 20.8% India’s child wasting rate (low weight for height) is the highest in the Global Hunger report of 2019. India’s child stunting rate (height for age), 37.9 percent, is also very high. The report says that in India, only 9.6 percent (hardly one out of ten) of all children between 6 and 23 months of age are fed a minimum acceptable diet. It is now very clear that hunger in India is massive and well-entrenched and yet the government not only does not do anything about it, it desperately seeks to stop any public attempt to raise the problem. Activists exposing and documenting starvation deaths in Jharkhand face police repression. Journalists exposing the midday meal scam in UP – videos showing children getting just salt and roti, or rice and turmeric water, for their midday meal in schools – are booked in false cases by a wrathful government.

It must be understood that chronic hunger is not confined to just a few backward pockets in remote interiors of rural India. It is just an alarming expression of a much wider and deeper malady of declining mass consumption. The severe economic slowdown now being reported from most industries and sectors talks about dropping sales, the other side of the coin is shrinking consumption. And when that happens in the sphere of daily necessities including food, we enter the realm of chronic hunger and near-famine conditions. And when a government refuses to address this basic problem of declining purchasing power and shrinking mass consumption and instead diverts all resources to the corporate biggies and the super rich, it actually pursues not just a failed economic strategy but inflicts a disaster on the country. It wages an economic war on the people.

The banking sector is fast emerging as another crucial theatre of this war on the people. After coming to power in 2014, one of Narendra Modi’s key talking points was Jan Dhan Yojana or the promotion of mass banking. We were told that the nationalisation of banks had failed to take banks to the people, the banks in India had remained a largely middle class preserve and the poor had hardly any access to banking. Over the next few months and years we were treated to stories of a spectacular proliferation of bank accounts in India. This of course did not mean provision of cheap credit for India’s crisis-ridden farmers, small traders or artisans and small producers. We realised the actual meaning of this ‘banking revolution’ when Narendra Modi announced a sudden ban on big notes and forced the people to deposit all their big notes in banks. In other words, almost the entire amount of money held as cash by the people was overnight sucked into the banking network.

The banks thus overcame their liquidity crisis, but the real crisis emanating from the massive amounts of unpaid corporate loans continued to haunt the banks. And now we are experiencing the next episode of the banking crisis – so-called weak banks are being merged with apparently stronger banks even as withdrawal of money by depositors is being restricted by diverse means. In the case of the Punjab and Maharashtra Cooperative Bank, the RBI has put a severe restriction on withdrawals – only a maximum amount of 40,000 can be withdrawn over a period of six months and only Rs 10,000 in a single withdrawal. Founded in 1984, the PMC is among the country’s top 5 urban cooperative banks with a network of 137 branches spread over 7 states. By freezing the hard-earned money of depositors, the RBI has put them in enormous distress. The statutory rule of only 100,000 rupees of a depositor’s money being insured in the event of a bank collapse has suddenly begun to look like an ominous impending threat to all ordinary depositors.

The winter session of Parliament begins in the middle of November against this backdrop of an alarming economic crisis with the common people reeling under mounting job loss, declining income, shrinking consumption and now frozen deposits in vulnerable dubious banks. The Modi government did not at all address the burning economic agenda in the monsoon session of Parliament. Buoyed by its return to power at the 2019 elections, it used its majority only to bulldoze Parliament with one undemocratic step after another without any debate or scrutiny. In the Haryana and Maharashtra elections the ruling party only talked about Kashmir and Pakistan and its notorious proposal to award India’s highest civilian award Bharat Ratna to Savarkar who betrayed the freedom movement by pleading for mercy from the British rulers and injected the communal venom with his thesis of Hindutva or Hindu nationalism. Now with Jharkhand and Delhi elections in the offing, the Modi-Shah government is bent upon using the winter session to rush the communal Citizenship Amendment Bill and inflict the devious NRC design on the country. The people of India must foil this ploy, reject the divisive NRC-CAB agenda and force the government to answer the pressing everyday economic worries of common Indians.