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Western Uttar Pradesh economy pays the price of communalism

While Modi preaches tolerance in Delhi, the economic costs of communal polarisation pile up in UP

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Aman SethiMayank Mishra Saharanpur
The soot has been painted over in bright colours, the torched plastic thrown out and replaced with shiny laminate, but the bazaars of Saharanpur bear few signs of bustle.

"The riots hit in July - two days before Eid, when the shops were stocked," said Ramesh Arora, one of the city's biggest cloth merchants, "Curfew was imposed, no one bought a thing. Business has not recovered."

Uttar Pradesh's year-long campaign of communal hate -bookended by the Muzaffarnagar riots of September 2013 and the Saharanpur riots this July - has destroyed lives, communities and neighbourhoods. If Saharanpur was a classic urban riot in which rioters targeted shops, cars and occasionally homes, Muzaffarnagar was a rural riot that left the city untouched, but wrecked havoc in the countryside.
 

Now, as the tension eases in the aftermath of a fraught general election, the economic costs of this polarisation are noticeable. The evidence thus far is anecdotal, but perceptible: shops still shuttered, credit lines and supply chains disrupted, labour scattered, and farmers unions divided.

Investors in the formal economy are spooked, while thousands of petty traders and street vendors have seen working capital, scrounged together over years of thrift, obliterated by rampaging mobs.

This instability has absorbed the attentions of the state government, leaving it little time to get on with governing the country's most populous state.

"I reckon the business is down at least by 30 per cent, if not more, compared to last year," said P D Mittal, president of Chamber of Commerce and Industry, Uttar Pradesh, "Even when we approach the administration for routine issues, the standard answer we get is (that) there are other pressing issues to be settled before industry's concerns are addressed."

Last month, Prime Minister Narendra Modi called for a 10-year moratorium on riots and a renewed focus on jobs and growth. Yet, his party and government are deeply implicated in the recent tensions: Sanjeev Baliyan, a prime accused in the Muzaffarnagar riots is now a Union minister of state, and Yogi Adityanath, prime accused in the Gorakhpur riots of 2007, has been tasked with handling the UP by-election scheduled for this Saturday.

"If they take one Hindu girl, we will take 100 Muslim girls," said Adityanath in an undated video recording of a public rally. Lakshmikant Bajpai, the Bharatiya Janata Party (BJP)'s UP president has claimed, incorrectly, that 99.99 per cent of rapists in the state are Muslims.

These comments by the party's most prominent UP leaders suggests the BJP still sees communal conflict, rather than economic growth, as the easiest way to win the state polls in 2017.

Western UP's economy rests on the three pillars of steel, sugar and cloth. While the steel and sugar mills have suffered in the past few years, the riots in Saharanpur and Muzaffarnagar have hit the cloth business particularly hard.

"Saharanpur is the region's biggest cloth market, but doesn't manufacture a metre of cloth," said Arora, the cloth merchant, who sources fabric from Gujarat and Maharashtra and sells it north to Uttarakhand, west to Punjab and Haryana, and east to the rest of UP.

While the instability has scared off the big purchasers, the riots have displaced the thousands of largely Muslim hawkers who bought from the town's wholesale market and sold it across the country.

"I sold my wife's jewellery and built my business over 10 years," said Mohammed Naseem, as he watched his children draw circles in the dust at a makeshift shelter on the outskirts of Muzaffarnagar. Naseem began by buying cloth from Saharanpur and selling it at a small mark-up in the surrounding villages.

Over time, he saved working capital of about Rs 70,000 - travelling as far as Bangalore and Hyderabad to sell his wares. At times, he bumped into Mohammed Aslam, who lived close to his village in the neighbouring Baghpat district: Aslam bought plastic suitcases in Delhi and sold these in Hyderabad. He also bought plastic crockery from Delhi and sold it further.

In September last year, both Naseem and Aslam fled their homes in the course of the Muzaffarnagar riots that left 60 dead and 50,000 displaced. Today, they live across each other on a camp settled on a waterlogged expanse near Malakpura and work as farm labour.

His home's been cleaned out, his stocks looted and his bank account has gradually emptied over a year of living in a camp. He's too scared to return to his village and doesn't quite know how to restart his life.

"I pick green chillies. It pays Rs 20 for five kilos," said Naseem, "I've got these rashes on my arms. It's because I've never done manual work before."

In urban areas, the riots have disrupted the delicate credit balance that - like in the cloth business - provides the interface between the region's formal and informal economy.

"I give short-term loans to 170 vegetable vendors and streetsellers in Saharanpur at three per cent interest a month," said a moneylender, "More than half my debtors are unable to pay their debts right now, as their stocks and sales have been wiped out by the riot." In the rural areas, the effect on sugar farmers has been subtler.

"There was initially a shortage of labour, but that soon passed," said Jamil Ahmed, a sugar farmer in his late 60s, "The bigger blow has been the split-up of the Bharatiya Kisan Union( BKU). Now, there is no one to fight for sugar farmers."

Ahmed said he joined the BKU in 1986, during an agitation against rising electricity prices for farmers. "Everyone was a member - Hindu, Muslim, Sikh, Jat," he said, "But after Muzaffarnagar, it split along religious lines."

There are now at least three unions, but farmer unity has fractured at a time when they need it the most. UP's sugar mills collectively owe them Rs 4,200 crore in arrears for sugarcane procured last year.

"The high court has passed an order directing the mills to pay us," Ahmed observed, "But there is no one to put pressure on the mills."

Worryingly, the instability has spooked investors who could bring jobs and growth to the region.

"While the riots hurt the economy, the lingering perception of instability has affected us even more," said Kush Puri, former chairman of the Muzaffarnagar chapter of the Indian Industries Association, "Investors are scared of putting money here."

Puri, who makes industrial valves, is eager to project an air of stability to attract investment. "If we've managed to run an industry through all this, we must be doing something right," he said.

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First Published: Sep 10 2014 | 12:44 AM IST

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