ALL India Democratic Women’s Association (AIDWA), Sushila Gopalan Memorial Trust and India School of Women’s Studies and Development,  jointly held the Sushila Gopalan memorial lecture on December 19, 2021, at Bhubaneswar in Odisha.

Thomas Isaac, former Kerala finance minister delivered the memorial lecture on the subject ‘Addressing Challenges before Women in the Neo-liberal Era: The Kerala Experience’. He spoke about the extremely adverse impact of the Covid pandemic on women based on the report of a survey of 1,75,000 households in the country. This report has clearly brought out the severe escalation of household indebtedness during the pandemic. Female-headed households have increased in the country from 9.2 per cent in 1992-93 to 10 per cent in 1998-99 to 14 per cent in 2005-06 to 21 per cent in 2018-19. This means that one-fifth of the households in India are female-headed. Women have become the main agency of borrowings for running the households.

Rural indebtedness in India has increased by 84 per cent between 2012 and 2018. The annual increase in debt in 2018-19 was 15 per cent. This galloped to 31 per cent during the Covid period. The non-banking financial companies (NBFCs) are charging exorbitant interest rates which amount to the same rates charged by private money lenders. Self-help groups (SHG) have become a conduit for exploitation by micro-finance institutions (MFI).   

Crash in employment and loss of incomes has led to astounding growth in inequality. On the eve of Covid, state governments had a Rs 1.88 lakh crore surplus lying in their treasuries, except Kerala. That is because Kerala spends money on the people. State governments did not spend even during the devastation caused by the pandemic. The treasury surplus increased to Rs 2.46 lakh crore with this money lying idle when people were starving and dying. This is neo-liberalism. Can anything be more obscene than this? Governments must be held accountable for this utter callousness.    

The experience of Kerala tells a different story. The LDF government in Kerala came to the rescue of its people. Food kits were distributed every month to every household. People’s hotels were started in every village where subsidised meals were given for Rs 20, and 10 per cent of the meals were given free to those who did not have money so that no one starved. Income transfer was done through old-age pensions which were increased from Rs 1,000 to Rs 1,600 for 60 lakh population, along with other special support schemes.

Eighty per cent of the workers in MNREGA are women. Women have been mostly recruited in the health services. The chief minister, Pinarayi Vijayan made a formal appeal to men to help their wives at home. The government has started a ‘smart kitchen’ programme to help women to buy appliances like dishwashers etc., at concessional rates.

Kudumbashree – the SHG programme sponsored by the local self-governments in Kerala played an important role during the pandemic in providing relief to the people. It has supplied loans of Rs 12,000 crore at four per cent interest to women. This is diametrically opposite of what is happening in the rest of the country where the MFIs are fleecing poor women and enhancing their profits!

R Ramakumar, from the Tata Institute of Social Sciences (TISS), elaborated on the withdrawal of public sector banks and the emergence of the private micro-finance institutions in our country. Private MFIs have become an instrument of corporate exploitation.

Before banks were nationalised in 1969, rural areas were deprived of the banking system. After nationalisation, banks were forced to open new branches in the rural areas and disburse 40 per cent of loans to farmers, dalits, adivasis and khadi gram udyog industries. Interest on agricultural loans was kept lower than the loans to capitalists. IRDP and loan subsidy schemes were started. This helped in freeing farmers from the clutches of the money lenders to some extent. The RSS-Jan Sangh and the Swatantra Party had vehemently opposed the nationalisation of banks.

The government embarked on the privatisation drive in the 1990s. The social responsibility of banks ended. This led to operating banks for profit. Competition and profit-making became the ethos. Profits could not be made by giving small loans to farmers. The corporate sector took loans of hundreds of crores of rupees. The banks saw profit in giving loans to industries; car and home loans were more profitable. As a result, the agricultural sector suffered.

The definition of agriculture changed. Big companies like Pepsico making potato chips were given huge loans under the agricultural sector. Many of the companies started defaulting on loan repayment. Non-performing assets of banks increased. Loan waivers to corporates by the government also increased. The stranglehold of the money lenders around the necks of farmers started tightening again as banks withdrew support. Farmers’ suicides started and they increased by leaps and bounds.

Without changing its neo-liberal policies which had led to the crisis in the agricultural sector, the government formulated a policy called ‘Profit at the Bottom of the Pyramid’ where the poor would get loans and banks would make a profit. This is the period that saw the entry of microcredit.

The SHG-bank linkage programme started in the 1990s. By the end of this decade, private micro-finance institutions (MFI) entered the scene. Forty per cent of credit is through the SHG-bank linkage and 60 per cent is through the private MFIs. They imposed usurious interest rates. The interest rates range from 26 to 120 per cent. Catamaran, a company owned by Narayan Murthy invested Rs 30 crore in the MFI, SKS in Andhra Pradesh. He earned a profit of Rs 60 crore in 6 months! Investors in the MFIs earned crores of rupees as profit by fleecing the sweat and labour of poor women who had taken loans. Microcredit is usually taken by women for consumption and not for any productive activity. How will they pay back these loans without any income? MFIs resorted to brutal methods for recovery. They harassed and abused women and even kidnapped their children for loan/interest payment. Andhra Pradesh saw suicides of poor women who could not pay such high-interest rates.

Private microfinance has emerged as an instrument of profit for the capitalists. The Modi government wants to further deregulate the MFIs which will create an unimaginable situation of loot of the toiling poor women who are already in an extremely critical state. It is clearly promoting ‘sikko me udhaar, noton me bhugtaan’!

Tapasi Praharaj welcomed the audience. Mariam Dhawale placed the AIDWA perspective on the growing indebtedness among women and also elaborated on the national level survey on women’s indebtedness conducted by AIDWA. A brief report based on the findings of this survey was released in this programme.  Archana Prasad, Ranjini Basu and Surangya Kaur collectively prepared this report. The programme was presided over by an eminent educationist, Asha Hans. Seema Nayak, a tribal from Bhubaneswar, Sanjukta Sethy, a dalit from Nayagarh and Sumati Nayak from Bhadrak narrated their bitter experiences of harassment by the MFIs. Minoti Panigrahi gave the vote of thanks.

AIDWA has decided to continue its campaign against the loot by MFIs and for its demand for interest-free and collateral-free loans for women. It has also sent a memorandum last year to the RBI for regulation of the MFIs.