Manas Chakravarty: The plain truth about rural lending

WATCHWORD

As the news about the government's Rs 1,05,000-crore agricultural credit programme came in, I was transported back decades ago, to the tiny village of Satitara in the heart of rural Bengal.

Those were the heydays of planned development, and agricultural lending was supposed to usher in a second green revolution all across the country.

University professors were cutting sugarcane in Cuba, Beijing mandarins were being made to slog in the paddy fields of rural China, and it seemed perfectly logical to send hordes of city-bred bankers to usher in an economic revolution in the Indian countryside.

As a raw probationer in one of the public sector banks, I was one of these unlikely, and unwilling, agents of social change.

"That field there is paddy," said the field officer, pointing to an expanse of green in the distance. "And that over there is wheat," he added, pointing to what seemed to my untrained eyes an identical field nearby.

Wheat, paddy, jute "" they all looked the same. And how was I to know which field belonged to whom "" surely, if I had to lend to a farmer, I needed to know which was his piece of land? But I needn't have worried, since the field officer didn't have a clue either. I soon learnt that the panchayat pradhan arranged all the loans, introducing all the farmers to the bank. You just took his word for everything.

"It really doesn't matter whom you lend to," pointed out a veteran field officer, "since they're not going to pay back the loans anyway." And why should they? Those were revolutionary times for rural Bengal, with the Left Front government recently installed in power, and Operation Barga, which ensured tenancy rights for sharecroppers, was in full flow.

As bankers, we had to lend the princely amount of Rs 75 to each sharecropper, which he usually spent the same day by treating his family to a sumptuous spread of meat and fish. My role as a trainee was limited to grabbing the thumb of every borrower, putting it on a well-inked stamp pad, and then pressing it down on all the places marked "x" on the documents. It was a cushy job, and the bank paid me extraordinarily well for it.

Luckily, said the manager, most of the branch's loan documents had been swept away or spoilt in a flood a few years ago, putting him in the happy position of having a cast-iron excuse for not being able to recover any money. Floods had other uses too.

A few years later, when I became an agricultural field officer on the basis of my intensive training in affixing thumb impressions to unreadable documents, I routinely refused giving fresh loans to defaulters, insisting that they first repay their earlier loans in full.

This soon made me class enemy number one, till my manager pointedly asked me whether my mission in life was to starve the entire village to death.

Soon I, like the rest of the field officers, was duly noting in my loan appraisal form, "Due to last year's drought and the previous year's flood, or the other way round, XYZ couldn't repay his earlier crop loan, and, in the circumstances, there is no alternative to giving him another loan if we are to have the faintest hope of his repaying the earlier one."

To be fair, it was actually quite true that a drought year was usually followed by a year of floods, followed by drought and so on.

But the work was only half the story at rural branches. I, and thousands of other city-bred bankers like me, discovered an entirely new world, and learnt a completely new set of skills.

At Satitara, for instance, where the bathroom was a tubewell in the open air, I mastered the art of changing from a wet towel into a dry one, in full view of a cheering village.

I also initially travelled three hours to the district town and another three hours back, clutching several bottles of precious vodka. But it wasn't long before I embraced local ways, drinking hooch while holding my nose, and making do with uncured bidis.

I learned to avoid walking in the fields and not to admire the superb view from the banks of the river, because these places were used as open-air loos.

And, most importantly, I learned how to dream up the figures for the Integrated Rural Development Programme, the Twenty-Point Programme, the small farmers' programme, the marginal farmers' programme and other such stuff.

Looking back, the strange thing is that we must have done something right in spite of our best efforts, since they tell me West Bengal's agricultural growth rate is now one of the highest in the country.

manas@business-standard.com