Beyond Capital

Polemics, Critique and Analysis

Gainers gain, losers lose

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Today (Aug 06) Mint carried an article written by one of its columnists which shows how neoliberalism in India has made the rich richer and the poor poorer at the geo-structural level.

The article concludes on the basis of recently released data on “outstanding loans sanctioned in a particular state/region and utilized in that place” – much has changed since India officially took steps towards liberalisation (according to the author, the economy has overall gained), however, “there are winners and losers…, there are some regions that have gained more than others”. What is most significant in the data (which the author does not explicitly recognise) is that it remarkably demonstrates that the geographical hierarchy that prevailed prior to the 1991 counter-revolution persists with hardly any reshuffling, while the vertical gap has tremendously increased. The data is significant since neoliberalism is mainly about financialisation and capital investment through the instruments of usury, debt and the credit system, which seemingly are, what the data perhaps substantiates, “radical means of accumulation by dispossession”, as David Harvey would put.

Excerpts:

1. “Comparing the data for end-March 1991 with the recently released numbers for end-March 2007, the northern and western regions have been the biggest gainers in terms of credit growth. In March 1991, the northern region accounted for 18.3% of the total credit outstanding—that percentage rose to 21.9% in March 2007. The western region, which accounted for 27.5% of total credit outstanding in the country in 1991, saw its share rising to 31.5%. The southern region’s share increased modestly from 28.1% to 28.5%. The losers were: the east, with the region’s share down from 12.3% to 8.9%, the central region (which includes Uttar Pradesh), whose share fell from 12% in 1991 to 8.1% in 2007, and the North-East, for which it declined from 1.7% to 1%”.

2. However, the gain in the northern region is virtually sham as “it’s Delhi that gained the most, with its share of credit going up from 7.1% in 1991 to 12% in 2007. The shares of Haryana, Punjab, Himachal Pradesh and Jammu and Kashmir all declined over the period, while that of Rajasthan was flat”.

3. “In the east, West Bengal’s share fell from 7.7% in 1991 to 5.3% in 2007, Bihar’s share (including Jharkhand) decreased from 3% to 2% while Orissa’s share remained flat at 1.6%. In the central region, the share of Uttar Pradesh, or UP (including Uttarakhand) fell from 7.9% to 5.2%, while that of Madhya Pradesh, or MP (including Chhattisgarh) declined from 4.2% to 2.9%”.

4. “In the south, the big beneficiary has been Karnataka—its share went up from 6.4% to 8.8%. Kerala’s share went down from 3.7% to 3.1%, Andhra Pradesh’s from 7.2% to 6.6% and Tamil Nadu’s from 10.6% to 9.9%.

5. “The data also corresponds to the increasing metropolitan focus of credit delivery. The numbers show that 66.1% of credit was utilized in the metropolitan centres in 2007, compared with 46% in 1991. Naturally, this will mean more credit growth in places such as Delhi and Mumbai. That’s probably the result both of the decay of rural India as well as the more rapid growth of these centres”.

6. Comparing the recent data with the distribution of national credit pie during 1981-91, Delhi’s share actually fell “from 10.2% in December 1981 to 7.2% in March 1991. Growth in that period was more uniform, with all the southern states except Kerala gaining modestly during the decade, as did MP, UP, Orissa and Assam”.

7. As for the political conclusion of the above economic phenomenon, the author shivers at the prospect of increasing “demands for redistribution” along with migration. “These will create immense political strains between Indian states and the potential for serious differences.”

…………………………

    “They have exemplified the saying: To him that hath, more shall be given; and from him that hath not the little that he hath shall be taken away — The rich have become richer, and the poor have become poorer; and the vessel of the state is driven between the Scylla and Charybdis of anarchy and despotism. Such are the effects which must ever flow from an unmitigated exercise of the calculating faculty”. (Shelley, ‘The Defence of Poetry’)
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Written by Pratyush Chandra

August 6, 2008 at 9:48 am

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