Sahukars Rule The Roost - Status of Informal Rural Financial Markets in Adivasi Dominated

Regions of Western Madhya Pradesh

- Rahul

Bondarsingh of Hirapur village in Bagli tehsil of Dewas district was in a sorry predicament. He

had been sentenced by the High Court in Indore to either pay a fine of Rs 5000 or failing to do so, serve six

months in jail. The sentence was pronounced in the month of May 2001 when marginal adivasi farmers like

Bondar are normally short of hard cash. Since Bondar had already spent about two months in jail

previously before having got bail, his lawyer suggested that he put in the remaining four months stint in jail

also. Bondar said that that would mean missing out on the kharif cropping season in the forthcoming

monsoons and that would put him in deeper trouble. The rains had failed the year before rendering

precarious his economic position and he could not afford to miss out on the coming monsoons. So the only

alternative that remained for Bondar was to borrow the money for the fine from a moneylender or sahukar

in the nearby weekly market village of Udainagar at an exorbitant rate of ten percent per month.

Bondar is a Bhilala adivasi whose parents along with others in the village of Hirapur had migrated

from the Manawar tehsil of Dhar district about sixty years ago. They were brought and settled there by the

Jagirdar in Bagli so as to clear the forests and begin cultivation of the land. However, almost immediately

therafter, the coming of independence in 1947 put a stop to this process of bringing forest land under

plough and following a settlement survey the people of Hirapur and nearby villages were restricted to

cultivating only some of the land that they had been able to clear and the rest was taken over by the Forest

Department. So over the years as Bondar and his brothers were born and grew up this land proved to be

too little for providing a decent livelihood. Not only that the provisions of the Indian Forest Act 1927

prevented the adivasis from even collecting the wood and timber needed for basic functions like cooking,

housing and farming and so put them at the mercy of the forest department staff.

Bondar had gone to the forest about a decade ago to collect timber for fencing in his farm. When

he was returning with the timber in a bullock cart he was accosted by a forest guard and his chowkidar. The

tacit understanding under the moral economy (Scott, 1976) prevailing between the adivasis and the local

staff of the forest department in such circumstances is for the forest guard to take a bribe and look the other

way. But this particular guard decided to sieze his cart and asked his chowkidar to take it along with the

bullocks to the Range office in Udainagar. When Bondar protested the forest guard hit him with his lathi.

This violation of the moral economy by the forest guard angered Bondar and he hit him on the head with a

piece of wood seriously wounding him.

Bondar was later arrested by the police and sent to jail. He was released on bail after his brothers

engaged a lawyer by borrowing money from a sahukar. Later still he was sentenced by the sessions court in

Dewas to a jail term of three years. He once again borrowed money from his sahukar to appeal against this

verdict in the High Court and managed to get it reduced to a fine of rupees five thousand, to pay which he

had to yet again depend on his sahukar. He has now had to rent out half his land to a fellow adivasi of

Hirapur so as to retire the expensive debt of the sahukar and has sent his son off to labour in the fields of a

big landlord in nearby Indore district.

The story of Bondarsingh is typical of Bhil adivasis residing in the western Madhya Pradesh

region and graphically illustrates the various inhibiting factors that lead inexorably to their falling into the

clutches of sahukars who are both traders and moneylenders. The adivasis are mostly landless labourers or

marginal farmers with little or no irrigation facilities and with restricted access to the forests which are

central to their livelihoods. Moreover, the staff of the government services ostensibly set up for their

benefit have in reality only filched the funds meant for the adivasis’ development. All this has combined to

ensure that most adivasis like Bondar have had to rely on the sahukars to bail them out and have thus got

into debt bondage. This ofcourse is a common refrain in adivasi regions thoughout India (CSCST, 1990).

Not only have macrolevel development policies skirted the question of smashing the feudal and colonial

structures that oppress the adivasis but the resources for modern development too have been garnered from

the remote forest areas in which they reside. Consequently a plethora of mining, dam and forest produce

based projects have affected the adivasis through direct or indirect involuntary displacement and severely

compromised their survival.

There have been numerous protests against this sometimes of a spontaneous nature and at others

of a more organised type throughout the country right from the time of the British and they are still

continuing. The Bhils too have a glorious tradition of rebellion in this regard (KG,1880). We will be

concerned in this paper with the way in which a renewed spurt of mobilisation in the western Madhya

Pradesh region in the decades of the eighties and the nineties of the last century over larger developmental

issues has invariably led to a campaign against the practices of the sahukars and an attempt to regulate the

informal rural financial markets in which they operate in favour of the adivasis. The weakness of the real

economy of the adivasis and their resulting debt bondage are interlinked and aggravate each other. Thus

any worthwhile plan to shore up the economic fundamentals of the adivasis must address both these issues

simultaneously. In this paper we begin with a brief history detailing the adivasi predicament in western

Madhya Pradesh, follow it up with a description of the actions taken by the adivasi mass organisations

against debt bondage and the retaliatory actions by the sahukars and the state and end with an analysis of

the various factors that contribute to the continuance of this problem and suggestions for future action.

Victims of Modernity

The Bhil, Bhilala, Barela, Mankar, Naik and Patelia tribes together constitute the indigenous

people known generally by the name of Bhils. They are the third most populous adivasi group in India after

the Gonds and the Santhals and inhabit a large area spread over the states of Rajasthan, Gujarat, Madhya

Pradesh and Maharashtra. They find mention in the ancient Hindu texts of the third century AD and were

originally concentrated in a small area in Sindh, southern Rajasthan and northwestern Madhya Pradesh

(Russel & Hiralal, 1916). Traditionally the Bhils lived by practising shifting cultivation, hunting and

gathering in dense forests. A combination of the reduction of the fertility of their farms and epidemics

would cause them to move every few years to new locations.

2

Living at subsistence levels and being heavily dependent on physical labour they had no

alternative to being integrated into tightly knit communities by customs of labour pooling in most aspects

of their material and cultural life. The egalitarianism of the Bhils was further ensured by customs that

decreed that surpluses accumulated beyond a certain limit be spent on communal merrymaking and

feasting. This also did away with the possibility of these surpluses being used to develop agricultural and

artisanal production and engage in trade and further accumulation and so protected the environment from

over exploitation (Rahul, 1997).

Their habitats being vital to their existence the Bhils jeasously guarded them from encroachrnent

by others. There is historical evidence of the Bhils having defied the might of the Gupta emperors on the

strength of their superb archery skills and retained their independence (Kosambi, l 956). The introduction

of firearms into the subcontinent by the Muslims invading from the west, however, led to this independence

being circumscribed. As the Muslim rulers extended their control over the northern and central parts of

India, the Rajputs who had been in ascendance in these areas had to move into the Bhils' tcrritories. Thus

started the exodus of the Bhils which over the centuries has led to their dispersal to the areas that they now

occupy. This process is described in interesting stories that are part of their folklore. Even though the

Rajputs ruled over them, apart from having to do begaar and pay some nominal taxes, the Bhils largely

remained free to pursue their nature-friendly subsistence lifestyles. So much so that they frequently used to

waylay trade caravans on the route from the north of India to the west, not so much for looting but more to

prevent what they considered to be trespass into their territory (Varma, 1 978).

The rise of the Marathas from the mid seventeenth century onwards for the first time led to serious

inroads into the Bhils’ homelands. In order to develop trade and settled agriculture so as to boost their

revenue they carried out sustained campaigns against the Bhils who refused to agree to this incursion into

their lifestyles. Peasants and traders from Gujarat and Maharashtra were encouraged to settle in the Bhil

regions and forests were cleared to bring land under the plough. Thousands of Bhils were massacred when

they rose in revolt against this policy (Manohar, 2001).

The British came to power in the western and central Indian region after having subordinated the

squabbling Marathas in the early nineteenth century and carried forward their policies with regard to the

Bhils with even more gusto. Having decimated their own forests to fuel industrial development and

international trade, the British began to exploit the forests of India from the early nineteenth century

onwards (Gadgil & Guha, 1992). This exploitatian increased with the laying of rail lines, which began in

western India in the 1850s. The extraction of timber reached altogether new levels requiring deep inroads

into the densely forested adivasi territory and as elsewhere in India the domain of the Bhils too was

encroached upon (Nath, 1960). The British also decided to fund this development and the accompanying

administrative costs through enhanced land revenue collection and the commercialisation of agriculture.

For this purpose throughout India they embarked on a policy of displacing the shifting agriculture

practising adivasis and replacing them with more settled agricultural castes and substantially hiking the

levels of land revenue charged. In the western Madhya Pradesh region the British followed the policy of the

3

Marathas and brought in Kanbi Patidar and Jat farmers from Gujarat and Rajasthan respectively and settled

them on the Bhil lands in the plains so as to both increase the earnings from land revenue and commercial

agriculture and also to tame the militant Bhils. While some of the Bhils withdrew into the hills most others

were converted into serfs or bonded labourers of these non-adivasi farmers (Luard, 1908).

The British introduced a new land settlement regime under which the earlier loose system of

revenue calculation by the village heads was dispensed with and a centralised system was put in place with

greatly enhanced levies on the farmers and the appointment of Malguzars or revenue collecting agents with

free rein to collect as much commission as they could for themselves over and above the settlement. Taxes

in the central and western Indian region increased to the level of about 65% of the production of the farmer

from around 25% prevailing previously (Mishra, 1956). The British thus dismantled the older feudal

system that, especially in adivasi areas, had allowed the village councils a fair level of independence and

put in place a new one, also feudal, but with functionaries loyal to them that was considerably more

exploitative. Eventhough these policies were implemented in the areas where the British ruled directly, they

had a demonstration effect and the princely states too began acting in a similar manner goaded on by the

Residents.

All this created a serious disruption in the traditional livelihoods of the adivasis of the western

Indian region (Hardiman, 1987). The rail line connected the adivasi regions with the rest of the world

through Mumbai. Grain and minor forest produce began to be exported. The British appointed the trader

bania castes as agents for collecting excise revenue on a commission basis. This led to the increasing

infiltration of these traders into interior areas using dishonest practices to defraud the adivasis of their

produce. Thus the surpluses that the adivasis used to have to tide them over the occasional years of bad

monsoons were available no more and famines became the order of the day. The insistence of the British on

the payment of taxes regardless of the failure of the harvest resulted in indebtedness of the adivasis to these

trader - moneylender sahukars following as the night the day (Aurora, 1972) . Displacement from their

lands and the decimation of their forests only added to their misery.The foundations of adivasi indebtedness

and the rule of the sahukars over them which continues to this day were thus laid by the British.

A Nefarious Colonial Legacy

The situation deteriorated even further after independence as the independent Indian state built

upon the colonial structure of governance that it had inherited from the British. The various Princely States

of the region were parcelled out arbitrarily between the four states of western India according to the whims

and fancies of their rulers thus dividing the Bhil homeland. From 1949 onwards a process of land

settlement was started with the aim of stopping shifting cultivation. With the formation of the state of

Madhya Pradesh in 1956, The Indian Forest Act 1927 was extended to the adivasi areas of the former

princely states and was strictly enforced totally stopping shifting cultivation. The forests began to be

worked for fuel and timber for the continuing development of industrial and urban centres in western India.

Timber contractors in collusion with corrupt Forest Department staff began indiscriminately decimating the

forests.This put the adivasis in a difficult position. They could not shift to newer locations any more as the

4

fertility of the soils decreased and simultaneously the supplementary income and nourishment from minor

forest produce also went down. The final blow has come from the establishment of large development

projects like the complex of big dams on the Narmada river and its tributaries which have led to

involuntary displacement without proper rehabilitation (Ram, 1993).

Unfortunately the egalitarianism of the Bhils has not extended to their women. There is a clear

gender division of labour with the women having to do the domestic work and also take on the

responsibilities of child bearing and rearing in addition to agricultural work. Socially too the women have

an inferior status with little say in community affairs and are considered as commodities to be sold off for a

bride-price at the time of marriage. Married women have to submit to polygamy and witch hunting and also

have to veil their faces in front of elder male relatives. Women have no right of inheritance or to property.

As with poor rural women elsewhere in India (Shiva, 1988), the major burden of the modernising thrust

introduced by the British and continued by the independent Indian state that has adversely affected the

Bhils' traditional lifestyles has had to be borne by the women. This patriarchy and the lack of education and

proper reproductive health services has resulted in the birth rate remaining uncontrolled further adding to

the miseries of the women in particular and the Bhils as a whole through a population explosion (Subhadra

& Rahul, 1997).

The aim of government social and economic development policies for the uplift of tribals in

Madhya Pradesh has been to integrate them into the modern market economy and culture and has

downgraded the Bhils’ own subsistence lifestyle. Thus the syllabi and teaching methods of the education

system are totally alien to their culture and so for a long time very few Bhils did get educated. Those that

did, treated their own culture as something primitive and sub-human in accordance with the prevailing

modernist assumptions and distanced themselves from it and their own community. This resulted in the

vast majority of Bhils remaining unequipped to participate effectively in the modern economy into which

state policies were relentlessly pushing them (Rahul & Subhadra, 2001). This lack of a modern education

has meant that the awareness of their rights and enabling laws has been low among the adivasis. So they

have not only been unable to avail themselves of even the minimal services that have been provided to

them but have also failed to protest against the unjust development policies of the state and suffered the

pre-capitalist and illegal exploitation of the sahukars.

The Bhils have thus been consistently deprived of their forest habitats which are so important for

their pre-modern subsistence livelihoods. Simultaneously they have been forcefully inducted against their

wish into the modern market economy which is dominated locally by sahukars and about the workings of

which they have little clue. The whole region has become a chronically drought-prone area and the people

have no option other than migrating either seasonally or permanently in search of employment as casual

unskilled labourers and living in perpetual debt bondage. Indeed this labour circulation and the consequent

proletarianisation of the Bhils to serve as grist to the mill of capitalist development in industry and

agriculture around the metropolitan centres in western India is only the obverse side of the coin of modern

development that has laid waste the subsistence economy of the adivasis (Breman, 1985).

5

Nothing is more evocative of this dehumanisation of the Bhils than the meaning that the illiterate

among them give to the term adivasi. They pronounce it as “adhavasi” and think of themselves as inferior

and so half the human beings in comparison to the more wellheeled and educated “puravasi”. The latter

refer to them with the pejorative term “mama”. So widespread is the phenomenon of migration among the

Bhils of Jhabua and Ratlam districts that even during the busy kharif season there is always a rush of

people travelling either way by the Vadodara-Kota passenger train that runs on the Delhi-Mumbai trunk rail

route passing through these districts. Consequently this train has come to be called “mama gari” by all and

sundry!

The Land And The People

The Bhil adivasi areas of western Madhya Pradesh which form the focus of this study extend

across the districts of Jhabua, Dhar, Barwani, West Nimar, East Nimar, Dewas, Indore and Ratlam.

Geographically this area begins roughly from the edge of the Malwa plateau in the north descending the

escarpment of the Vindhya hills into the Nimar plains flanking the lower Narmada valley and ends with the

Satpura ranges to the south. Most of the fertile black cotton soil areas of the Malwa plateau and the Nimar

plains are in the control of non-adivasi farmers with the Bhils reduced to being landless labourers or

marginal farmers with low levels of economic and human development. Only some fertile areas in Dhar

district are still in the hands of the Bhils. The larger section of the Bhils reside in the hilly regions farming

degraded sub-optimal soils on very small plots of land in proximity to forests which have mostly been

denuded. Over the past three years the region has been getting deficient annual rainfall of about 750 mm

compared to the longterm average of about 1100 mm.

While districts like Jhabua, Barwani, Dhar, West Nimar and East Nimar have moderate to heavy

concentrations of adivasis others like Ratlam, Dewas and Indore have smaller populations in pockets only.

Nevertheless since the latter group of districts were once the hunting grounds of the Bhils from which they

were later forcibly displaced they have also been included. These latter districts incidentally also are the

major industrial and urban centres with the Indore-Dewas conurbation being the most industrialised region

of Madhya Pradesh. Statistical data regarding these geographical and socio-economic characteristics have

been compiled from various sources and tabulated in the following tables. However, a caveat must be

entered here regarding the quality of this data. Research revealed discrepancies between the data with the

Department of Economics and Statistics of the Government of Madhya Pradesh and that given in the

abstracts for the state in the Census of India. Totalling of some Census of India subcategories give different

results from the totals given in the abstracts. So these data should be taken as only roughly indicative.

6

Table 1: General Characteristics of Western Madhya Pradesh

Charac. Dist. Total Area (sq. km.)

Forest Area (sq. km.)

Populatio Total (nos.)

n (1991) Sched. Tribe (%)

Annual Rainfall (99-00 in mm)

Jhabua 6793 1309 1130405 85.7 735 Barwani 3664 251 646801 73.2 772 West Nimar 6369 753 1018874 66.3 742 Dhar 8153 1197 1367412 53.5 633 East Nimar 10779 5118 1431662 26.8 1121 Ratlam 4861 345 971888 23.3 727 Dewas 7020 2060 1033807 15.0 1055 Indore 3898 292 1835915 5.5 824

Sources: District Statistical Handbooks of Govt. of M.P., Census of India 1991.

Table 2: Selected Agricultural Characteristics of Western Madhya Pradesh (year

2000)

Charac. 0 -1 ha.*

Agric 1 -2

ultur ha.*

al La 2- 4

ndho ha.*

lding 4-10

Patt ha.*

ern ( >10

%) ha.

Net Sown Area

Irrigated Area (% of

S.Tribe C’vators (% of

S.Tribe Ag. Lab. (% of

Dist. H.hldsAcrge H.hlds Acrge H.hldsAcrge H.hldsAcrge H.hldsAcrge (sq.km.) NSA) total) total) Jhabua 30 8 30 20 26 32 13 34 1 6 3619 23 95.0 87.3 Barwani 17 2 24 9 29 21 25 36 5 32 2336 33 64.7 59.0 West Nimar 19 4 31 15 27 24 19 37 4 20 4110 43 59.6 34.7 Dhar 25 4 26 12 25 23 19 38 5 23 5039 46 67.5 57.1 East Nimar 16 2 26 10 27 20 24 39 7 29 4383 41 38.1 42.9 Ratlam 31 6 27 14 22 24 17 37 3 18 3265 45 34.1 31.5 Dewas 24 3 24 10 23 17 22 37 7 33 3775 44 11.1 1.6 Indore 29 5 26 13 23 21 18 36 4 25 2547 65 7.1 24.0

Sources : DSHs of GOMP, Abstracts of Census of India 1991.

Disaggregated data showing the separate landholding patterns of the adivasis is not available in

published form and will have to be culled from data kept with the Department of Agriculture of Madhya

Pradesh which is beyond the scope of this study. So direct statistical evidence of the alienation of adivasis

from agricultural land and their economic marginalisation cannot be presented here. Nevertheless from the

above tables it is clear that the adivasis form a significantly larger share of agricultural labourers than their

proportion in the population in the districts of East Nimar, Ratlam, Dewas and Indore where they are in a

minority. It is also noteworthy that in Jhabua district which is overwhelmingly populated by adivasis the

percentage of marginal farmer households is very high and that of large farmer households the lowest

among all the districts. The percentage of irrigated land too is very low compared to other districts.

Similarly the adivasi dominated Bagh and Dahi blocks of Dhar district have irrigation percentages of 16

and 28 respectively while Badnawar and Dhar blocks which are populated largely by non-adivasis have

percentages of 60 and 64 respectively. Unfortunately published time series data on the growth of capital

formation in agriculture at the district or lower levels are not available.

7

Table 3 : Selected Indicators Of Economic and Human Development (data for year 2000 unless otherwise mentioned )

I’cators Dist.

met.roads (kms / 1000 persons)

Electrici Domestic (kwh/

ty Cons. Irriga. capita)

Regd. Factories (no/lakh persons)

MigrLab (%of tot. popul. 1991)

BPL Families (% in 1991)

Inf. Mort. (deaths/ 1000 live bths ‘91)

Literacy General (%)

1991 S. Tribe (%)

Literacy General (%)

2001 All Ind Rank of district

Jhabua 1.34 32 93 7 25.0 75.2 92 19.0 8.2 36.9 577Barwani 1.25 43 237 12 36.5 N.A.* 98 17.3 9.5 41.4 562West Nimar 2.16 69 308 14 28.4 55.0 95 30.0 6.7 63.4 327Dhar 1.28 43 378 31 31.7 72.1 82 34.5 9.8 52.7 481East Nimar 1.37 56 194 20 34.2 63.2 96 46.7 12.5 61.7 353Ratlam 1.15 71 425 18 33.9 62.5 100 35.8 9.7 67.7 248Dewas 1.04 44 371 22 36.6 52.5 80 44.0 11.6 52.7 366Indore 1.55 139 257 69 33.6 56.4 60 66.3 11.7 74.8 135

* Barwani district was part of West Nimar district at the time of the poverty survey conducted by the Development Commissioner

Sources : DSHs of GOMP, Abstracts of Census of India 1991 & Provisional Population Tables of Census of India 2001, The Madhya Pradesh Human Development Report, National Family Health Survey 1995.

Once again, apart from literacy, published disaggregated data showing the status of economic and

human development of adivasis is not available. However, from the low levels displayed by Jhabua and

Barwani districts which are predominantly inhabited by adivasis a fair guess can be made as to the

marginalisation of adivasis in the whole region. It must be noted here that the Pithampur industrial area

situated in Dhar district on the border with Indore is the biggest industrial area in the state with major

national and multinational companies having established factories there. This boosts up the factory average

for Dhar but actually it is only a pocket in stark contrast to other backward areas in the district. The

percentage of population shown as migrant labourers for Jhabua district as calculated from the Census of

India abstracts is suspiciously low. An independent sample survey conducted by the mass organisation

Khedut Mazdoor Chetna Sangath in 1986 among adivasi households of Alirajpur tehsil gave a percentage

as high as 63 (SWRC, 1989).

Clearly the region is a heterogeneous one in which the geographical habitat and socio-economic

milieu in which the adivasis reside vary considerably from district to district and at times within a district.

Nevertheless with regard to the control of non-adivasi castes in general and of the sahukars in particular

over the economy and politics of the region, there are certain broad similarities which we shall now

describe. Unfortunately this control has resulted in the administration not implementing the provisions of

the various acts that have been legislated for the regulation of the activities of the sahukars and so there are

no reliable statistical data with the government as to their number and the extent of their activities.

Surprisingly even the decennial All India Debt and Investment Surveys conducted by the National Sample

Survey Organisation in collaboration with the Reserve Bank Of India (RBI) do not separately estimate the

high levels of indebtedness of adivasis to moneylenders despite this having been acknowledged as a serious

problem by the latter (Reddy, 2000).

8

The legal Straitjacket

Before going on to the ways in which the sahukars dominate the political economy of the adivasi

areas of western Madhya Pradesh it will be useful to survey the legal framework and state policies within

which this domination takes place. As in other areas in the matter of laws too the setup bequeathed by the

British was retained by the independent Indian state. The British had rejected the indigenous judicial

apparatus they came across and instead instituted a new system based on English laws to suit their imperial

interests. Though the East India Company was mainly a trading entity right from its beginning in 1600 it

had to carry out administrative tasks too which slowly increased with the increase of its political influence.

Consequently an elaborate system of laws and courts was built up during Company rule. However, since

the western Madhya Pradesh region came to be influenced substantially by the British only after the

assumption of direct rule over India by them in 1858 we shall concern ourselves here only with the judicial

system as built up by them following The Government of India Act 1858.

The Proclamation made on behalf of the Queen at Allahabad on November 1st 1858 guaranteed to

the people of India inter alia that due regard would be paid to the ancient rights, usages and customs of

India while framing new laws and that these laws would be administered equally and impartially for the

benefit of the people (Paranjape, 1998). Almost immediately, however, these principles were breached. The

Indian Penal Code (IPC) was enacted in 1860 and the Code of Criminal Procedure (CrPC) in 1861. These

laws, the former with some minor amendments only, are still in force today and have been codified in such

a manner as to provide the administration with a handy means of suppressing organised public dissent. A

more harmful law from the point of view of the adivasis was the Indian Forest Act 1864. Applying the

principle of res nullius which means that a particular property has no owner the British refused to recognise

the customary community rights of the adivasis over the forests in which they resided and turned them over

to the Forest Department created for this purpose. This law too in its newer 1927 version, which effectively

converts the adivasis into trespassers in their own backyard, continues to be in force at present. Yet another

law that disinherited the adivasis from their main resource of land was the Land Acquisition Act 1894

which using the principle of eminent domain empowered the government to dispossess the private owner of

a piece of land for some public purpose in exchange for a paltry compensation. Once again this law also

has been retained and widely used to displace people in independent India in pursuit of modern industrial

development (Fernandes & Paranjpye,1997).

Extensive peasant movements in the period leading up to independence, a fairly articulate adivasi

lobby from north-eastern India and the presence of both liberal democratic and socialist members in the

Constituent Assembly resulted in the Constitution of India which came into force on 26th January 1950

having many pro-adivasi features (Pandey, 1995). Part X provides for special autonomous governance of

adivasi areas in accordance with their customs and lifestyles. Some of the adivasi areas in the north east of

India have been included in the sixth schedule while the adivasi regions in the rest of India have been

provided for in the fifth schedule. Part XVI makes special enabling provisions for tribals and the previously

outcast untouchables. Continuing struggles of the adivasis after independence have led to some more

9

provisions in their favour in Part IX which lays down the rules for effective local self governance in rural

areas and has provided for one third reservation of the seats and posts in the councils from the village to the

district level for women. Unfortunately as a consequence of the adoption of the markedly anti-people

British system of centralised legal and general administration in the Constitution and the considerable

protection afforded to the executive in the exercise of its public duties these enabling provisions in favour

of the adivasis have tended to be observed in the breach.

Laws too have been enacted after independence in favour of the poor and especially the adivasis.

The Minimum Wages Act 1948 was enacted to ensure that workers were given a statutory minimum wage

to be decided from time to time by the government. There are provisions in the Madhya Pradesh Land

Revenue Code 1959 preventing the transfer of tribal land to non-tribals, the restoration of such land back to

tribals and the registration of small agricultural tenants working on the land of big farmers as landholders.

The Madhya Pradesh Scheduled Tribes Sahukar Act 1972 regulates the practice of usurious moneylending

in adivasi areas. The Bonded Labour System (Abolition) Act 1976 was enacted to do away with the

demeaning practice of keeping labourers bonded to a landowner from generation to generation as a

repayment of a loan that never gets fully paid. The Scheduled Castes and Scheduled Tribes (Prevention of

Atrocities) Act 1989 was enacted to deal more strictly with offenders of other castes who were continuing

to oppress the formerly untouchable and adivasi people. The Madhya Pradesh Excise Act 1995 gives the

gram sabha or the general body of the village the right to control the manufacture, sale and transport of

liquor within its jurisdiction. The Madhya Pradesh Panchayat Raj Act 1993 as amended for adivasi areas in

1997 makes the adivasi gram sabha the paramount body in local matters and gives it extensive powers of

local self governance. Finally there is the Protection of Human Rights Act 1993 which provides for the

setting up of Naitonal and State Human Rights Commissions. There are also a National Commission for

Women and a Commission for Scheduled Castes and Scheduled Tribes. The Bhils of western Madhya

Pradesh being mostly poor, illiterate and unorganised have generally not been able to take advantage of

these laws.

Apart from these the Indian and Madhya Pradesh governments have many policies and schemes

for the welfare of adivasis. These are the Employment Assurance Scheme, Integrated Rural Development

Programme, Jawahar Rozgar Yojana and many schemes for education and development under the Tribal

sub-plan which is being implemented in the adivasi dominated areas. These schemes are all plagued with

low levels of funding, wrong formulation due to a lack of understanding of adivasi lifestyles and massive

corruption and so have mostly been unable to bring about any substantial change in the socio-economic

status of their intended beneficiaries (Rahul, 1992).

Systematic rural economic development in adivasi areas in Madhya Pradesh really got underway

only with the launching of the Tribal sub-plan and the infusion of central government funds for their

betterment in 1975. Simultaneously the branch network of commercial banks in rural areas was extended

and regional rural banks were set up to augment the low level of services being provided by the cooperative

societies and banks and so facilitate the process of economic development. These were the regional rural

10

banks, land development banks and agricultural cooperative banks. The financial transfers under the

coordinated thrust towards alleviation of rural poverty from 1982 onwards with the establishment of the

National Bank for Agriculture and Rural Development (NABARD) and the introduction of the Integrated

Rural Development Programme (IRDP) and other schemes have been handled by these banks. The

financial transfers in various community development programmes like the Jawahar Rozgar Yojana (JRY)

too are routed through these banks.

Despite this considerable expansion of the institutionalised rural credit delivery system over the

past three decades since the nationalisation of banks in 1969 the economic and political power of the

sahukars, the trader-cum- moneylender class, combined with the corruption of the officials of this system

and the lack of awareness among and the economic weakness of the adivasis has led to the cheap

subsidised funds from this system being diverted to the traditional informal rural credit markets thus

strengthening them instead of gradually eliminating them as envisaged.

The Piper Calls the Tune

The economy of the adivasi areas in western Madhya Pradesh gravitates around the weekly market

villages or haats. These haats have been known to exist from pre-colonial times but were mainly places of

barter exchange in the remote adivasi areas. With the monetisation of the economy which began with the

advent of Maratha rule and was considerably extended during the time of the British, these haats developed

into full fledged markets (Hardiman Op. Cit.).

As mentioned earlier the British tightened the system of taxation both where they ruled directly

and also where they administered by proxy through the princes. The earlier minimal presence of the state

was reinforced with specialised departments in charge of forest, excise, public works, police and health.

The vania or sahukar provided the vital everpresent link between the adivasis and this administration which

was generally centred in some town. Thus the sahukar became the provider of commodities on sale, the

financier of agricultural operations, the buyer of agricultural produce and also the agent for collecting taxes

all rolled into one. The cupidity of the sahukars ensured that very soon they misused the tremendous

opportunities that such a situation offered to become economically and politically powerful people. The

influence of the vania or sahukar became so pervasive that he has been incorporated in the sacred wall

paintings of the Rathva Bhilalas of Chhota Udaipur in Vadodara district of Gujarat (Jain, 1984). He is

depicted sitting inside a horse carriage and is called Valyo Vania or the “comeback moneylender” because

he piles up so much interest that the returning never ends.

A story related by a traditional adivasi storyteller in Alirajpur tehsil of Jhabua district brings out

beautifully this process of fraudulent marginalisation of the Bhils. A “bajariya”, the meaningful term

generally used by the adivasis to refer to non-adivasis, once came to the Bhil king of Mathwar and asked

for land to ply his trade. On being asked how much land he required he said he would need only as much as

the hide of a buffalo. The king readily granted his request. The trader then proceeded to cut the hide of a

buffalo into very thin pieces. He then tied these pieces together to make such a long leather string that it

circumscribed the entire land of the kingdom!

11

Independence from colonial rule increased the opportunities for the sahukars tremendously. The

expanding activities of the state opened up the remote adivasi areas making it possible for the sahukars to

increase their trading and moneylending activities. Given the high levels of illiteracy among the adivasis

they cornered most of the jobs in the administration and other government services and through corrupt

practices increased their hold on the adivasis. Moreover as contractors for the logging of timber and for

carrying out construction activities too they amassed big fortunes. They are also the leading lawyers in the

courts in the tehsil and district towns and so the adivasis have to approach them to go to the courts for legal

redress. Most importantly this all encompassing socio-economic and administrative presence of the

sahukars makes them the local leaders of both the leading mainstream political parties - The Indian

National Congress (INC) and the Bharatiya Janata Party (BJP). So the adivasis willy nilly have to mediate

with the administration and the government also through these very sahukars who oppress them.

Eventhough there are reservations for the adivasis which ensure that all the electoral positions for

government from the village upto the central level in a fifth schedule district like Jhabua are reserved for

them, the apparatus of the political parties which fight these elections is still dominated by these sahukars.

In the prevailing situation in which elections for the post of a sarpanch too require a successful candidate to

spend around twentyfive thousand rupees on an average it can well be imagined that the adivasi candidates

for the elections of members of the Vidhan Sabha and Lok Sabha have to rely heavily on the party

apparatus dominated by these sahukars. It is not surprising therefore that the adivasi representatives

subsequently act to further the interests of these sahukars at the cost of their poor brethren. In mixed areas

where the adivasis only form a significant minority and the seats are not reserved, the sahukars themselves

are candidates. One such example is that of Shyam Holani the sitting INC MLA from Bagli tehsil of Dewas

district. He along with his father and brothers are not only the major sahukars of Kantafod which is a haat

village but also among the biggest landholders of the region and they also own a cotton gin. The formal

democratic institutions have thus been almost totally usurped by the sahukars.

Not surprisingly therefore the administration rarely takes any suo moto action to curb the illegal

activities of the sahukars. Consequently the sahukars while continuing to flourish by the extortion of

usurious interest rates in the informal credit markets and by manipulating the prices of the products in

which they trade also exercise their powers to distort the functioning of the institutionalised credit delivery

system. There are many treatises, including the reports of official review committees (Govt. of India,

1996), that have shown how corruption and the nexus between government officials, bank staff, elected

representatives of local bodies and suppliers of materials has resulted in a large part of the subsidised funds

not reaching the beneficiaries of both individual and community development schemes like the IRDP and

the JRY. This kind of leakage in fact bedevils the whole financial system in this country right upto the

highest levels and is the root cause of much of the NPAs of commercial and development banks (RBI,

1999c). However, there is one significant feature of the rural financial scenario that has been little remarked

upon in the literature. This is the way in which the sahukars take advantage of the power they have over

their adivasi debtors to completely subvert the formal rural credit delivery system, which has been put in

12

place at such a great cost to the exchequer ostensibly to eliminate them and use its cheap resources to

strengthen the usurious informal rural credit markets which they dominate.

The modus operandi is quite simple. The sahukar arranges with the manager of a bank to take out

an agricultural loan in the name of an adivasi who is indebted to the former. The manager after completing

all the paperwork gets the tribal to sign and hands over the money to the sahukar after taking the cut that

has been agreed between them. Thus the sahukar is in possession of funds at a cost of about 20-25% which

includes the cut given to the bank manager. He then loans this money out to adivasis, including the one

whose name he has used, at an exorbitant rate of 100-150%. This kind of fraud takes place with schemes

for the creation of physical assets too but since these assets provide telltale evidence in case complaints are

made and enquiries are instituted, these are generally not favoured by the sahukars and are resorted to only

by big landlords. In the case of cash loans, however, even if the adivasi who has been defrauded does speak

up, the fact that he has been made to sign on the papers is used as proof to show that he has received the

money. This kind of graft is rampant and has made a caricature of the statistics of cheap credit delivery to

adivasis that are trotted out regularly by government sources.

An Unholy Alliance

Formation of centralised states and their continuation in power have necessitated wars and these

are all violent aggressive actions premised on the principle of might is right (Tilly, 1985). The Mughals and

their feudatory Rajput lords largely left the Bhils alone not considering it worth their while to take

possession of their heavily forested habitats. As mentioned earlier the Marathas and then the British waged

wars against the Bhils to extend agriculture and trade and establish their rule. They came up against stiff

resistance from the Bhils both spontaneous and organised in nature throughout the late eighteenth and

nineteenth centuries. In order to fully appreciate the political contours of the problem of debt bondage

which so debilitates the Bhils’ economic foundation it will be necessary to briefly review some of the major

adivasi revolts in the western Madhya Pradesh region and the way in which they were crushed. This will

give us a proper idea of how the vicious and tenacious nexus between the landlords, sahukars and the state

has evolved and perpetuated itself over the past century and a half.

The British had embarked on a policy of pacification after the initial wars in the early part of the

nineteenth century so as to tame the militancy of the Bhils with a carrot and stick policy. They set up a Bhil

Corp for military operations with adivasi soldiers. Apart from this a separate Bhil force was set up to

provide security to the arterial Agra-Mumbai road passing through the Sendhwa region on which the Bhils

regularly raided the trade convoys (WNG, 1970). However, taking advantage of the uncertainty created by

the first war of independence of 1857, the Bhils, who were never very happy with the usurpation of their

lands by the British, rose once again in revolt in what has come to be known as The Great Bhil Rebellion of

1857-60. Khajya Naik had been in the service of the British for twenty years from 1831 to 1851 and was

engaged in guarding the Palasner ghat in the Satpura hills on the Agra-Mumbai road. He was sentenced in

1851 for having murdered a bandit after having taken him into custody. But taking his previous service into

consideration he was released in 1855. This incarceration angered Khajya and immediately after his release

13

he began plotting against the British. He found eager accomplices among the Bhils in the hills who had

been nursing ill will against the British for having displaced them from their lands in the Nimar valley.

Khajya joined forces with Bheema and Mevashya Naik and provided help toTatya Tope in 1857.

The British mobilised their forces including the Bhil Corps to not only defeat the rebellious Bhils in battle

at Rajpur and later Dhaba Baodi in Barwani district but also used the services of informers to capture

Khajya and Bheema. Khajya was pardoned in 1858 and thereafter acted as an informer for the British in

their efforts to quell the uprising, which was still going on. But in 1860 Khajya once again revolted

claiming that the British had not compensated him enough for his services. Immediately the uprising gained

momentum and under Khajya’s leadership the Bhils once again began waylaying the caravans on the Agra-

Mumbai road in the Satpura Hills. Finally the British summoned up forces from other areas in addition to

the Bhil Corps and there was a fierce battle at Ambapani near the Agra-Mumbai road. Eventhough the

British came out victors in this battle Khajya and Bheema Naik managed to escape. Traitors in their forces,

who were in the pay of the British, later killed them both. The British used a combination of force and

treachery to subdue this rebellion with great difficulty.

Another such revolt is that of the great Tantia Bhil (Bhand, 2001). Tantia was born in the present

day Khandwa district in 1842. This region was at that time under the direct rule of the East India Company

and was later made part of the Central Provinces after the reorganisation consequent to the war of 1857.

Like elsewhere the British had introduced the zamindari system for collection of land revenue in this region

too. Tantia’s father was a small tenant farmer of a landlord and he passed away in 1860 leaving Tantia to

fend for himself. In the decade of the eighteen sixties there was continuous monsoon failure for three years.

The British refused to forego the collection of land revenue putting the tenant farmers in a difficult

position. Most farmers had to take loans from sahukars to pay their rent to the landlords. Tantia refused to

do so and instead beat up the landlord and his men when they insisted that he pay the rent. This being a

serious act of indiscipline from the point of view of the British given the simmering discontent among the

adivasis arising from famine conditions, the police immediately arrested Tantia and he was later sentenced

to a year of imprisonment. After being released from jail he was harassed continuously by the landlords,

sahukars and the police through the imposition of false cases.

Finally fed up with this endless harassment he beat up the landlords once again and fled to the

jungles. There he slowly built up a team of armed men and began looting the landlords and attacking the

police stations from 1872 onwards. He and his men were caught on many occasions but they managed to

escape from jail. For as much as a decade and a half Tantia and his men defied the might of the British and

their vassal landlords and sahukars and came close to establishing a parallel government. He became

famous for his Robin Hood style of functioning of looting the rich landlords and distributing most of the

loot among the poor. However, he was once again apprehended in 1888 through subterfuge and sentenced

to death after a summary trial in Jabalpur.

Shortly after this in 1881 the Bhils of Alirajpur in Jhabua district revolted under the leadership of

Chhitu Kirar (Luard Op. Cit). The year had been bad for the farmers and famine was rampant. The patwaris

14

or revenue officials had extorted what little had been produced in the form of taxes. The sahukars in the

haat villages and towns, however, had large stocks of hoarded cereals. Chhitu Kirar rounded up a force of

men and attacked some of the haat villages. The grain stores of the sahukars were looted and the food

distributed among the people. Subsequently Chhitu aligned with a discontented faction of the ruling

princely family in Alirajpur and threatened the seat of power itself. The British acted swiftly and brought in

armed forces and cavalry to put down the rebellion.

This antipathy of the colonial state towards the desperate plight of the adivasis resulting from its

policies and its heavyhanded and treacherous character with regard to protests on their part unfortunately

remained unchanged even after independence as demonstrated by the fate of the Lal Topi Andolan (Rahul,

1999). Inspired by the legendary freedom fighter Baleshwar Dayal Dikshit the adivasis of Banswara district

in Rajasthan and Ratlam and Jhabua districts in Madhya Pradesh began organising against the feudal

extortion of the princes and the sahukars from the 1930s onwards. Despite ups and downs and some severe

repression this movement was very successful in freeing the Bhils from the bondage of the feudal lords and

sahukars in the areas of its influence. However, immediately after independence Dikshit was jailed for eight

months after he dashed off an angry letter to Jawaharlal Nehru insisting on the abolition of the feudal rights

of the princes and their jagirdars. He was released only after the then Governor General Rajagopalachari

intervened on his behalf. He quit the INC along with Jayaprakash Narayan and others to form the Socialist

party in 1950.

Thereafter the movement took on a pronounced leftist character with demands for land to the tiller,

the abrogation of all debts to the sahukars and strict regulation of their activities by the administration and

access to forests. The members of this movement used to wear red caps to distinguish themselves and so it

came to be called the Lal Topi Andolan. So pervasive was its influence that its candidates won the elections

for the Lok Sabha and the Vidhan Sabha throughout the decades of the 1950s and 1960s. Locally the

corruption of the administration and the activities of the sahukars and feudal lords were curbed

considerably. Unfortunately elsewhere in Madhya Pradesh and India the Socialist party failed miserably

and so the radical demands being made by the movement could not be pursued at higher levels. This soon

made those adivasi leaders of the movement elected as M.P.s and M.L.As fall prey to the sops offered by

the local non-adivasi leaders of the INC.

So by the early nineteen seventies these leaders began to quit the movement and join the INC

along with a substantial section of their followers. This was made possible by the fact that there was a

substantial increase in central government development funds flowing into adivasi areas about this time, the

temptation of the use of which was used as a bribe to woo these leaders and their followers. One of the two

present deputy chief ministers of the Government of Madhya Pradesh (GOMP), Jamuna Devi, who is an

MLA from Kukshi in Dhar district, is the most prominent among such leaders to desert the movement and

join the INC. Once the unity of the movement was broken severe repression was unleashed on those

activists who refused to be bought and remained loyal to their ideals. The imposition of a plethora of false

15

cases and severe beatings by the police after arrest made sure that these activists and their followers soon

gave up their crusading work and the movement was crushed totally.

Such was the memory of the terror of this repression and the all pervasive control over the adivasis

exercised by the police and the forest departments consequent to it that when efforts at mobilisation were

begun again in the early 1980s it was very difficult to get people to come together to protest their sorry

condition. When after much persuasion a small rally of some fifty people was being taken out in Alirajpur

town of Jhabua district in 1984 the people continually deserted the rally on being called by their sahukars to

explain why they were participating in it.

This brief history of adivasi protests and their defeat underlines two crucial facts. The first is the

use of force by the colonial state to subdue the adivasis and pave the way for the extraction of huge

surpluses. The other is the use of collaborators by the British from among the non-adivasis primarily and at

times from among the adivasis themselves to maintain their hold over the rebellious Bhil masses. The

sahukars and the landlords have been the main collaborators as they have seen their own betterment in the

rule of the British. The Holkar state in Indore was totally with the British during the revolt of 1857 and

though the Scindia state in Gwalior had gone against the British it fell into line soon after the revolt was

quelled. Indeed this is in consonance with the behaviour of most of the Indian princely, trading and middle

classes during colonial rule and without their military, financial and administrative support the British

would not have been able to subdue the revolt of 1857 (Ghosh, 1985).

This repressive apparatus of the British was taken over by their erstwhile collaborators after

independence and used to considerably enhance the extraction of surpluses from adivasi areas putting to

nought the provisions made in the Constitution for the protection and development of the latter (Sharma,

2001). In the western Madhya Pradesh region it was the sahukars and the former princes and their

feudatory lords who were the mainstay of both the INC and the administration. Thus the same colonial rule

with its imperial and feudal trappings continued in spirit if not in letter with little or no improvement in the

subaltern status of the adivasi masses. Where there was some independent challenge to this system, as in

Jhabua, the treacherous cooptive and repressive tactics developed by the British were used to snuff it out.

Moreover, similar to the way in which the British downgraded Indian culture, indigenous knowledge

systems and vernacular languages and foisted western culture and the English language on India so also the

Bhils’ culture, traditions and languages have been downgraded and they have been colonised in what is

effectively a non-adivasi empire. Hinduism as the culture of the dominant non-adivasis has sought to either

subsume or demolish the indigenous culture of the adivasis and has succeeded in doing so in many areas

(Deliege, 1985). Things have come to such a pass that the Sangh Parivar has now launched a massive open

campaign of Hinduisation of adivasis (Tadavla, 2002).

Nature’s Children Rearm

The late sixties and the early seventies of the last century saw the emergence of adivasi

movements in western India protesting against their alienation from their resource base and their

marginalisation in the modern economy. The Bhoomi Sena in Thane district of Maharashtra and the

16

Shramik Sangathana in the Dhule district of the same state are notable in this respect (Singh, 1983). Later

there were sporadic movements in Gujarat and Rajasthan. Struggles to secure access to forests and against

corruption in government dspartments began in Madhya Pradesh in the early eighties (Rahul, 1994). The

particularly attritive battle against the construction of the Sardar Sarovar dam on the river Narmada which

began in 1986 and which has spread to other dam projects in the valley has given a focal point and an

ideological foundation to all these struggles. It is as if the threat to the river Narmada, which is central to

their lives and their myth of creation and is revered as a Goddess, has galvanised the adivasis into revolting

against the manifestly unjust policies of the modern Indian state.

Today even adivasi politicians of both the mainstream political parties have begun voicing the

demand for greater autonomy for the Bhils along the lines of those that have resulted in the formation of the

state of Jharkhand. The increasing repression unleashed by the administration and the ruling elites in the

face of this concerted challenge to their hegemony has forced these mass organisations to form regional

groupings. One such federation in the western Madhya Pradesh region is the Jan Mukti Morcha (JMM)

comprising groups active in the districts of Jhabua, Dhar, Barwani, West Nimar, East Nimar, Ratlam,

Indore and Dewas. A broader grouping is that of the Adivasi Ekta Parishad extending over the states of

Maharashtra, Gujarat, Rajasthan and Madhya Pradesh.

The JMM has progressed far along the road to the formulation of an alternative to the dominant

centralised model of development and governance with concrete experiments. The main plank of the

Morcha is that the traditional subsistence life-style of the Bhils is comparatively more ecologically noble

(Redford, 1991) and socially just and should be adopted by society at large given the dangers posed to

human existence by excessive consumerism and industrialisation (Durning, 1992). Thus unlike the

autonomy movements underway in other parts of the country the Bhils of western Madhya Pradesh are not

just demanding control over their resources and forms of governance but are also positing a way of life that

negates all that is problematical about modernism. Presently the people have begun to research thelr own

neglected history, create a new written literature, strengthen their cultural identity through the conservation

and documentation of their traditional folklore, and promote their indigenous knowledge systems in

medicine and agriculture. Thus this upsurge of the downtrodden Bhils is not just a socio-political

movement but a full-fledged adivasi revival (Tadavla, 1995).

The widespread problem of debt bondage among adivasis in western Madhya Pradesh so

debilitates their economic condition that it seriously hinders any process of organising them to fight for

their rights. Thus the various adivasi mass organisations in western Madhya Pradesh like the Khedut

Mazdoor Chetna Sangath which began work in Jhabua district in 1982, the Adivasi Mukti Sangathan which

began work in East Nimar, West Nimar and Barwani districts in 1991, the Ekta Parishad which began work

in Dhar and Ratlam districts in 1991, the Adivasi Morcha Sangathan which began work in Dewas district in

1997 and the Adivasi Shakti Sangathan which began work in West Nimar and Indore districts in 1997 have

all had to address this problem sooner or later.

17

Breaking Out of Bondage

The campaigns against the sahukars began by questioning their calculations, which are so rigged

that the debtor can never come out of bondage, however much he may pay back. There were innumerable

cases in which the sahukars had expropriated the silver ornaments kept with them as security deposits by

such manipulation. Lists of such debtors and their creditors were drawn up and then complaints were

lodged with the concerned subdivisional magistrates (SDM) under the provisions of the Madhya Pradesh

Scheduled Tribe Sahukar Act, 1972. This act is a powerful legal instrument for the regulation of the

activities of the sahukars in areas that have been notified as adivasi areas under the provisions of the fifth

schedule of the Constitution of India.

According to the provisions of this act sahukars practising in these areas have to get licenses from

the subdivisional magistrates to ply their business and display this fact prominently on a board in front of

their premises. The sahukars must maintain proper records of their debtors including the amount and term

of the loan, the rate of interest and dates and amounts of repayment. A copy of these records has to be

furnished to the debtor as well as the inspector appointed by the SDM. The rate of interest cannot exceed

12% annually on unsecured loans and 6% annually for secured loans and detailed records must be kept of

the objects kept as security and these cannot include objects, land or animals required for agricultural

purposes. The maximum amount realisable in the form of interest on a loan has been pegged as being equal

to the principal. The SDM has been empowered to carry out raids on the premises of the sahukars and sieze

their records, either suo moto on being informed by the inspector appointed by him or on the complaint of a

debtor, if these provisions are not being followed by the sahukars. There is a provision for imprisonment

upto one year and fine upto Rs 2000 for violation of these provisions. In the absence of proper records as

decreed in this act the sahukars cannot press civil suits in courts of law for recovery of the money they have

disbursed. In addition there is the Madhya Pradesh Sahukari Act 1934 as amended in 2000 which too is

quite stringent and is applicable in areas which do not fall within the purview of the fifth schedule.

Invariably the sahukars violate all of these provisions and most of them practise without a license.

Thus legally they are on extremely weak ground if cases are lodged against them and investigations are

begun. Most sahukars have hundreds of debtors and are thus liable to prosecution in hundreds of cases. Not

surprisingly therefore the launching of this campaign in areas in which the mass organisations had a wide

mass base brought immediate success. Thousands of adivasi debtors have been freed of age old debts and

quintals of silver ornaments have been recovered over the years.

There have been innumerable incidents of sahukars in interior haat villages being gheraoed by

adivasis demanding the abrogation of their debts and the return of their silver. On one such occasion the

sahukars of Balwari village in Barwani district beat up the adivasi members of the Adivasi Mukti

Sangathan and broke their cycles in 1994. There was an immediate mass response from the organisation

and thousands of adivasis gheraoed the whole village stopping all traffic into and out of the village. The

situation cooled down only after the SDM came from Sendhwa and assured the people that cases would be

lodged against the offending sahukars and they would be arrested.

18

The most heart warming is the story of the struggle of the adivasis of Potla village in Bagli tehsil

of Dewas district. There is a bania sahukar in this village who had over the years made debtors of almost

the whole of the adivasis of the village. He had even made some of them into bonded labourers to work on

the agricultural land that he had acquired through fair means and foul over the last fifty years. The adivasis

of Potla village joined the Adivasi Morcha Sangathan in 1999. Immediately the sahukar began pressurising

them not to attend the meetings of the sangathan. On one occasion a rally of the sangathan had to be held

and so the adivasis went to the sahukar and asked him to give them his truck on hire to them for the

purpose. The sahukar agreed but refused to give the truck when the time came for setting out for the rally.

This angered the adivasis so much that they immediately held a meeting to discuss this treachery. It was

decided at the meeting that the adivasis would unilaterally declare that all their debts to the sahukar

amounting to a few lakhs of rupees were abrogated. They also ostracised him socially and economically.

Even his bonded labourers refused to work on his land.

There has been a salutary effect on the interest rates being charged as a consequence of this

campaign. Eventhough the rates did not fall to the level decreed by the abovementioned law, nevertheless

they were scaled down to 25% annually from the earlier exorbitant rates ranging from 100 to 150%. This

was because there was an everpresent need for credit among adivasis given the weakness of their basic

economic foundation which had been devastated by earlier exploitation. This increases the moral hazard

(Bentson,1995) of the lender and since the adivasi borrower is in no position to provide a safety net of

assured returns to the sahukar, the latter tends to factor in the cost of this added risk into the interest rate

charged. In addition certain social customs created sudden needs of heavy finance. The adivasis have the

custom of having to pay a bride price and feast the whole community at the time of marriage. Similarly in

case of a death the last rites of the deceased too are very expensive. Moreover the lack of proper

government health services mean that in case of serious illnesses the adivasis have to pay through their

noses for expensive private treatment.

So from as early as 1984 itself the Khedut Mazdoor Chetna Sangath began forming grain banks

and credit groups in the villages in which it had an influence in Alirajpur tehsil of Jhabua district. The

traditional adivasi communities had a fairly efficient support system of credit known as “uchna”. Under this

anyone in need of money or grain or pulses could borrow this from someone else who might have some to

spare without having to pay any interest. The only condition was that the principal would have to be

returned whenever the creditor demanded it. However, since at any point of time there would always be

someone in the community with a surplus to spare, it was possible to go on rescheduling the debt by

borrowing from one to pay the other until such time as the borrower was able to pay back the loan from his

own earnings. Unfortunately the increasing monetisation of the economy coupled with the destruction of

their resource base and the rapaciousness of the sahukars had so devastated the livelihoods of the Bhils that

the surpluses they once used to hold had vanished and led to the collapse of the uchna custom. This custom

was revived and slightly modified to give it a more communitarian and businesslike character.

19

Each family would contribute twenty kilos of grain each year at harvest time to constitute a grain

bank and this would then be distributed among those that needed it at an interest of 25% annually. Similarly

each family would contribute Rs 10 every month and this money would then be advanced as short loans to

those who needed it at the same interest rate as above. It was decided that once the grain banks and the

credit funds increased to large values and were running well the interest rate could be brought down.

Initially these groups ran well for some time but then administrative problems began to arise. The people in

the areas in which these groups were started were mostly illiterate. So in most cases the records had to be

kept by the activists of the organisation. Given the demands made on the activists’ time by their main work

of political organisation they soon began missing the monthly meetings of the groups. With the increasing

state repression this absenteeism of the activists also increased and so the working of the grain banks and

credit groups went haywire. This has been the fate of most of the groups begun by the mass organisations

even subsequent to this in other districts of the region.

The JMM reviewed the working of the self help groups in 1992 and came to the conclusion that it

was not possible for the activists of the mass organisations to oversee them. Without some person regularly

keeping track of the working of these groups left to themselves they tend to wither away. So instead it was

decided to encourage the development oriented non-governmental organisations (NGO) working in the area

who have both the resources and the institutional setup for employing fulltime workers for this purpose to

take up this work instead.

The first such organisation to start work in this sphere was the Indore Diocesan Social Service

Society which began to form grain banks and credit groups in adivasi villages of Kannod and Bagli tehsils

of Dewas district from 1990 onwards. This NGO has not only formed and consistently run self help groups

(SHG) but has also pioneered their linkage with the branches of the regional rural bank and the commercial

banks operating in the area for supply of cheap credit, a practice that has now become standard all over the

country. This NGO has been chosen under the World Bank funded Madhya Pradesh District Poverty

Initiatives Programme for the promotion of women’s SHGs in Madhya Pradesh, the Swashakti Yojana, to

supervise as many as 96 SHGs in Bagli Tehsil. Since then most NGOs working in rural areas and even

some programmes under the Rajeev Gandhi Rural Development Missions run by the GOMP have

constituted such groups in the whole of western Madhya Pradesh.

The best performance in this regard is that of the NGO Sampark situated in village Raipuria in

Petlawad tehsil of Jhabua district. The NGO is working in 74 villages with 5539 beneficiary families

having a population of 26360 with funds provided by Action Aid, CASA and DANIDA funding agencies

and has a fulltime staff of some thirty people. Eighty women’s and eightythree men’s SHGs have been

formed and are running well with the total funds collected at present amounting to Rs 32,75,525 of which

Rs 27,23,893 have been disbursed as credit. These groups are also linked with the branches of the regional

rural banks and scheduled commercial banks for the supply of cheap credit to meet the needs in excess of

those met with their own funds. In addition these groups have also collected an emergency expense fund

which amounts to Rs 5,51,632.

20

Simultaneously campaigns have been conducted to reduce the expenditures on social customs like

marriages, festivals and deaths and the traditional systems of dispute resolution and pooling of agricultural

labour have been revived thus reducing the expenses on legal action and payment of hired labour.

According to a survey conducted by the NGO the net savings in expenditures arising from these social

campaigns as compared to the past is as high as 74%.

This NGO has also addressed the vexing problem of the weakness of the real economy of the

adivasis. As mentioned earlier most of the soils on which the adivasis cultivate in the western Madhya

Pradesh region have been degraded and forests have been denuded affecting agricultural yields. In addition

debt bondage has ensured not only that they have not been able to invest in the development of their land

but also that they are perpetually without some or all of the means of production at the onset of the

agricultural season. This also results in the adivasis having to sell what little they produce at rockbottom

prices to the sahukars from whom they have taken loans to see them through the monsoons. Sampark has

carried out considerable soil and water conservation and afforestation work and formed agricultural

sourcing committees. A total of Rs 42,40,000 have been spent on the former improving the soil and

moisture conditions of about 2000 hectares of land. A total of 73,421 paid mandays of work have been

created as a result so far. Apart from this the NGO has also inspired the people to put in voluntary labour

upto 30% of the total work done. The agricultural committees have centralised the sourcing of agricultural

inputs such as seeds, pesticides and fertilisers and had a total annual budget for 2001-2 of Rs 7,95,813

effecting a total saving of Rs 1,46,811 on the retail prices of these inputs. Consequently the rate of

migration to labour elsewhere to supplement their incomes which is a phenomenon endemic to Jhabua

district has come down from 60% to just 3%.

Sampark has encouraged the adivasi farmers to take up organic agriculture and revived the use of

indigenous seeds of sorghum, maize, millets and the like to try and overcome the problems that have

surfaced with agriculture based on chemical fertilisers and HYV seeds. It is also running a programme of

community health relying heavily on ayurvedic and local herbal remedies so as to cut down the expenses

on medication through prevention and timely care. It runs schools and craft workshops too and has a well

run UNDP funded programme of solar lighting for households. The net positive result of all this has been to

reduce the dependency of the benefitted people on the sahukars totally. Despite drought conditions having

prevailed in Jhabua district for the past three years continually these people have not had to go to the

sahukars for loans.Thus this NGO has been successfully addressing the whole gamut of development

problems which have served to keep the adivasis in poverty and provides a role model for rural

development work.

The NGO Samaj Pragati Sahayog too has been working in all these areas in Bagli tehsil of Dewas

district though over a smaller area and with somewhat lesser success. However, its notable contribution has

been in setting up a People’s Empowerment Centre with funding from the Council For Advancement of

People’s Action and Rural Technology in Neemkheda village. This centre imparts regular training to NGO

workers on the various aspects of carrying out comprehensive rural development work including watershed

21

development, afforestation, organic agriculture and formation and running of SHGs and grain banks. This

NGO also held a very big revenue camp in collaboration with the district administration to update the land

records of thousands of adivasis in Bagli tehsil. The corruption and inefficiency in the revenue

administration has meant that adivasis do not get formal recognition of the title to the land through

mutation for years after the death of the landholder. Since the benefits under the various poverty alleviation

schemes and the facilities of the primary cooperative societies can be availed of only by registered

landholders this has been a major problem with the adivasis.

The Lok Biradari Trust with similar programmes in Jhabua, Dhar and Indore districts too deserves

mention for doing commendable work to empower adivasis and especially women. Like the NGO

Sampark, this organisation has been chosen as the nodal agency under the DANIDA funded rural

development project for the Badnawar tehsil of Dhar district. It has also been chosen as the facilitating

NGO for Dhar district under the Swashakti Yojana. Apart from this the Krishak Bharati Cooperative

Limited which produces fertilisers has undertaken a project for the development of dryland agriculture in

western India with funds from the Department of International Development of the United Kingdom in

Jhabua district as part of its programme in western India.

The members of Khedut Mazdoor Chetna Sangath in Alirajpur revived and strengthened their

traditional practice of “parjia” in which ten to twelve households pool their labour together in routine

agricultural operations. They extended this to the construction of stone gully plugs on the nullahs adjoining

their slopy farmlands to conserve the soil that is eroded during the monsoons. The Bhils also have an

ingenious method of gravity irrigation of their fields with water diverted from flowing streams (Rahul,

1996). This requires community labour for its working and so had been falling into disuse because of

weakening community linkages. The Sangath members in many villages pooled their labour together and

revived this practice and thus have increased the acreage under irrigation.

Coming back to agitational methods in the sphere of the real economy, apart from its main thrust

of ensuring greater access to forests and the agitations against displacement due to the construction of

dams, the JMM has also taken up the problem of the alienation of adivasis from their vital resource of

agricultural land. There have been many instances when legal actions have been instituted under section

170 (B) of the Madhya Pradesh Land Revenue code 1959 for the restoration of land of adivasis that has

been illegally appropriated by non-adivasis. Some have been successful and others have failed for reasons

that will be detailed by and by. In one major action the tenant farmers of the former prince of the state of

Mathwad in Alirajpur tehsil of Jhabua district have secured the rights to the land that they have cultivated

for more than a century freeing themselves from the bondage of the prince.

Given the large number of adivasis who have to depend on earnings from labour the issue of

payment of minimum wages is an important one. So actions have been taken from time to time to ensure

the payment of minimum wages in both government works as well as by farmers to their agricultural

labourers. When mobilisation began in the early 1980s the false filling of muster rolls and the nonpayment

of statutory minimum wages was standard practice in government public works in the region. The first

22

strike in 1983 in fact was with regard to such nonpayment in the construction of an earthen dam by the

Irrigation Department in Atthava village in Alirajpur tehsil of Jhabua district which was monumentally

successful and served to kick off the mobilisation process with a bang. There have been many such actions

thereafter and in one major struggle during the drought of 1986 the services of as many as five employees

of the Soil Conservation Department were terminated on being found to have engaged in gross malpractice.

Today payment of minimum wages has become standard in government works as a consequence of

contiuous such actions.

A considerably more difficult task is that of getting private landed farmers to pay the statutory

minimum wage to agricultural labourers. Struggles have been undertaken in West Nimar district going to

the extent of boycotting the farms of the landlords but a combination of the inherent economic weakness of

the adivasis, the unwillingness of the administration to take action against the landlords and various factors

which have tended to make agriculture a dicey economic activity over the past decade or so has meant that

by and large these have not been successful. The net result is that the daily minimum wage being paid in

the Nimar region for routine agricultural labour is only Rs 20 as compared to the statutory wage of Rs 52.

This brings us to the important issue of remunerative prices for agricultural produce. Madhya

Pradesh has an elaborate setup wherein there are Krishi Upaj Mandi Samitis at the tehsil and district levels

whose administration is governed by a board of elected farmer representatives with reservation for adivasis

to ensure that fair auctioning of the produce of farmers takes place in the agricultural produce markets.

These samitis function under the overall supervision of an apex Mandi Board at the state level.

Unfortunately like in the case of the elections for government bodies the elections for the Mandis too are

expensive affairs invariably leading to them being fought on party lines with the attendant influence of the

traders and sahukars over the adivasi candidates who are elected. Subhash Yadav, the MLA from Kasravad

in West Nimar district, who is the other deputy chief minister of Madhya Pradesh, in fact began his

political career in the mandi samitis and graduated to the Vidhan Sabha via the credit cooperative societies.

Thus the traders, elected representatives and the officials of the Mandi get together to rig the auctioning of

agricultural produce and even cheat the farmers in the weighing of their produce. Indeed the many ways in

which the farmers are duped in these Mandis is fit subject matter for a separate thesis by itself.

The Adivasi Mukti Sangathan waged a longdrawn and fairly successful battle in this regard in the

mid 1990s in Sendhwa town of Barwani district. Sendhwa is situated near the border of Madhya Pradesh

with Maharashtra and its hinterland is a rich cotton producing belt. Thus adivasi farmers from both the

states come to the Mandi in Sendhwa to sell their cotton in bullock carts. At peak season time there are

hundreds of farmers on any day waiting to get their cotton auctioned and weighed.Taking advantage of this

massive influx of farmers waiting to get their cotton sold the traders in collusion with the officials of the

Mandi used to cheat the farmers with regard to the prices, the calculations and the weighing. The Sangathan

raised the issue with the Collector and was assured of action. However, nothing materialised so the

Sangathan had to organise a dharna in front of the Mandi. This led to an agreement being reached about the

setting up of an electronic weighing machine, transparent auctioning process and the payment to farmers by

23

cheque instead of cash to eliminate all kinds of malpractice. Not only was this agreement not adhered to but

some of the adivasi activists were beaten up by goons hired by the traders.

This led to an immediate retaliatory mass action and in February 1997 the National Highway 3,

popularly known as the Agra-Bombay road passing through Sendhwa was blocked to traffic by some ten

thousand people who had come in from as far as Dewas and Jhabua districts in solidarity. This action had

tremendous symbolic significance. As mentioned earlier the Agra-Bombay road is a very old one dating

back to Mughal times. The ghat section of this road just south of Sendhwa as it crosses the Satpuras has

been a problematical area with the Bhils having continuously waylaid caravans and armed forces. During

the Great Bhil Rebellion of 1857-60 the famous battle of Ambapani in which the British finally defeated

the forces of the rebel leader Khajya Naik took place near Sendhwa on this road. Thus once again the Bhils

had blocked this road demanding justice bringing back memories of earlier uprisings.This finally

galvanised the administration into action and the road block was lifted only after the goons were arrested.

Subsequently all the demands were fulfilled and the Mandi in Sendhwa has since been running according to

the rules.

Finally we come to actions undertaken against the malfunctioning of the formal financial

institutions in rural areas.The functioning of the agricultural credit cooperative societies and banks is

bedevilled with problems similar to those that beset the Mandis. Eventhough the adivasi farmer members

are in theory the shareholders and through their elected representatives the governors of these banks, in

reality their relationship with the officials of the societies is no better than the one they have with their

sahukars. In the remoter areas where the adivasis are largely illiterate the officials even cheat the adivasis

of the loans that are advanced to them on paper. These societies are weighed down by non-performing

assets (NPA) arising from large loans that have been given out on political rather than sound financial

considerations to the big farmer-trader nexus. Subhash Yadav, the deputy chief minister of Madhya

Pradesh has himself been involved in malpractices as the Chairman of the State Cooperative Bank as will

be detailed later.

The pressure on the finances of these banks created by such malpractices is sought to be relieved

by putting the screws on the minor adivasi debtors to pay up the small consumption loans they take even

when they are unable to do so due to crop failure. In one such instance Gyan Singh a twentysix year old

Barela adivasi of Savriyapani village in Barwani tehsil was murdered by officials of the district cooperative

bank on May 3rd 1997. Gyan Singh’s father Rabba had taken a loan of Rs 3500 and the four officials of the

bank had gone to collect the interest on this loan in a jeep. Not finding Rabba they caught his son and

brought him back with them in the jeep. In the jeep they beat up Gyan Singh so severely that he died of his

injuries by the time they reached Barwani. The news spread like wildfire and immediately thousands of

adivasis of the Adivasi Mukti Sangathan gheraoed the police station in Pati demanding the registration of a

case of murder against the culprits and their arrest. Subsequently the Adivasi Mukti Sangathan held a

massive rally and public meeting in Barwani on the 9th of May in which the President of the district

panchayat paid a cheque of Rs 1,00,000 to the widow of Gyan Singh as compensation.

24

This incident and the uproar created by it due to the massive public action undertaken by the

Adivasi Mukti Sangathan started a debate in the press ( Nai Duniya, 1997) regarding the state of the

cooperative banks in the adivasi areas and the way in which they had become institutions for their

exploitation instead of emancipation. Incidentally all the arraigned officials were not only non-adivasis but

two of them were bania by caste. The main point to come out of this debate was that even after fifty years

of independence adivasis in the western Madhya Pradesh region had not yet been accorded an equal status

with the non-adivasis and there were blatant violations of their rights. To the extent that even officials of a

cooperative bank could assume unto themselves arbitrary powers of arrest and torture with impunity.

The regional rural banks and the rural branches of scheduled commercial banks play quite a

significant role in the rural economy by virtue of the fact that they are the channels through which

development funds under schemes such as IRDP and JRY are routed to the adivasis and the panchayats.

However, it is not as easy as in the case of cooperative banks to take out loans for unproductive purposes as

the audit and supervision of these banks by regulatory agencies is tighter than in the case of the former. The

JMM has taken action against erring officials of these banks from time to time.

Consequent to one such action Hemant Jain, the manager of the local regional rural bank, Nimar

Kshetriya Gramin Bank, branch in Katkut, a remote village in West Nimar district of Madhya Pradesh was

arrested by a detachment of special police on charges of defrauding an adivasi under the Prevention of

Atrocities against Scheduled Castes and Scheduled Tribes Act in the first week of August 1999. This

dramatic incident marked the culmination of a sustained campaign being conducted by the Adivasi Shakti

Sangathan (ASS) against the rampant misuse of government funds earmarked for adivasis.

The ASS had been trying for quite some time to catch the bank manager-sahukar combine in

Katkut in the act of siphoning off an agricultural loan from an adivasi. An adivasi who was a member of the

organisation would not be trusted for such a transaction by the culprits and so it was necessary to find

someone who was unconnected with the organisation. After a long and patient search one such adivasi

Bhura Bhachria resident of Salikhera village was found. He was talked into going through with the charade

of getting a loan for Omprakash Narsingh Jaiswal, his sahukar, from the Nimar Kshetriya Gramin Bank

branch in Katkut. Eventhough the total loan amount in the name of Bhura and his wife Jheenibai was Rs

72000 they were given only Rs 9000 and the rest was kept by Jain and Jaiswal. A complaint was filed in

May 1999 immediately with the SDM in Barwah. After the usual investigations finally the bank manager

was arrested in the only such case to have occurred in western Madhya Pradesh.

Finally, eventhough not directly related to the campaign against the sahukars, mention must be

made of the anti-liquor campaigns that have been conducted by the Jan Mukti Morcha because of the

massive participation of women that they have generated and their positive effect on the finances of adivasi

households in general. Moreover, by reducing the number of disputes that invariably arise out of

intoxication these campaigns have improved community bonds. The participation of women in the

struggles described above emancipated them enough for them to feel that something needed to be done

about the alcoholism of their men. Traditionally Bhil men have been hard drinkers. Previously they had to

25

brew their own liquor from the flowers of the mahua (Madhuca latifolia) tree, which was a laborious and

time consuming task and so could be undertaken only occasionally. With the profuse availability of bottled

illicit liquor from the many distilleries in the region, invariably retailed by some of the sahukars, this

constraint had been removed. Excessive liquor consumption by the men was not only proving to be a

financial drain on household incomes but also leading to sexual and physical assaults on the women. So

there have been hugely successful actions to close down such shops, the most remarkable being the seizure

of lakhs of rupees worth of liquor from a godown run by the liquor contractor of Dewas district in

Pandutalav village in 1997 (Khaparde, 1998).

Over the past two decades or so the agitational actions of the JMM and the rural development

work of the NGOs have together addressed the whole range of problems that confront the adivasis of the

western Madhya Pradesh region and have rendered significant blows to the stranglehold that the sahukars

have over the political economy of the region. More importantly the JMM has effectively challenged the

myth of adivasi development being propagated by the state and questioned its theoretical assumptions.

Unfortunately the mass base of the JMM is restricted to a few pockets only and this too has ebbed in the

face of state repression.

The Empire Strikes Back

The JMM has faced an uphill task right from the beginning. Locally they have had to contend with

the economic and political power of the sahukars and the opposition of the government bureaucracy. At a

macro level the opposition of these organisations to the policies of the state that were inimical to the

interests of the adivasis has meant that major development projects and loans from international agencies

for them have been blocked. So often decisions have been taken at the ministerial level to crush these

organisations through heavy deployment of police forces. The neo-colonial and internally imperial

character of the state apparatus in India has been exposed as never before by JMM and the former has

struck back with vengeance time and again to protect the imperial interests of the non-adivasi elite.

The first step that the sahukars took was to exercise their political influence over the police to

lodge and get registered false complaints against the activists and members of the mass organisations.

Innumerable such cases have been lodged and there are activists who have had more than fifty cases against

them. Since these cases are of a false nature rarely are any convictions achieved but the tortuous and

expensive legal proceedings are enough of a burden to discourage people from fighting for their rights.

Moreover the arbitrary powers of arrest that the police have, accompanied by lax supervision of the human

rights of the arrested accused in custody by the courts, gives the former the licence to torture the latter

(Sankaran, 2000). These two factors have combined to considerably weaken the resolve of the adivasis in

their struggle against the sahukars.

Simultaneously the sahukars have used the services of hired goons to launch murderous attacks

on activists and members of the mass organisations and even the NGOs. The most horrifying of these was

the murder of a nun sister Rani Maria of the Indore Diocesan Social Service Society (IDSSS) in 1995. As

mentioned earlier the IDSSS had launched an extremely successful micro-credit programme from the early

26

1990s in Bagli and Kannod tehsils of Dewas district. Prior to the start of this programme the Udainagar

sub-tehsil area of Bagli which has an overwhelming adivasi majority was totally controlled by the sahukars.

Such was their power that when a debtor failed to pay his due on time an employee of the sahukar would

visit him and take away any moveable property that he may have and also a fee of Rs 100 for the trouble of

having to come to recover the due.

The SHGs begun by the IDSSS not only disbursed credit but also arranged for the supply of

agricultural inputs. In some places they also organised the adivasi farmers into collectively selling their

produce in the mandi in Indore. Thus a comprehensive dent was being made into the power base of the

sahukars. Things came to a head when these groups also began to act unitedly in the political sphere. The

Bagli Vidhan Sabha constituency has traditionally been a BJP stronghold and had been represented

continuously since the formation of Madhya Pradesh by Kailash Joshi who had once served briefly as chief

minister of the state. This influence was being maintained in the Udainagar region through the sahukars and

they had their henchmen among the adivasis in the villages. The SHGs decided to field their own

candidates for the elections to the Panchayat bodies in 1994 against the candidates of the BJP. This angered

the sahukars and they hired goons to beat up some of the SHG members and simultaneously had the latter

arrested by the police.

Sister Rani Maria on learning of the arrest of members of the SHGs went to the police station in

Udainagar to enquire about their offence. This prevented the police from beating up the adivasis and they

had to produce them before the magistrate in Bagli instead where they got bail. This intervention so upset

the sahukars that they secretly began plotting the murder of sister Maria. One day when sister Maria was

travelling by bus to Indore from Udainagar she was accosted midway in an area where the road passes

through a forest by hired assassins and murdered in broad daylight in front of other passengers by repeated

knifing. This incident created a furore all over the state and brought out the hollowness of the formal

democratic structures that exist in this country at the grassroots level.

Much more debilitating, however, has been the organised repression of the state. Time and again

the state has cracked down on the mass organisations in an effort to wipe them out. The Narmada Bachao

Andolan has had to repeatedly bear such onslaughts and has in the process lost much of its mass support.

However, the tremendous national and international public support that it has generated for its cause has

helped it to carry on its struggle despite such repression (Sangwai, 2001). This has had a spinoff effect on

the other mass organisations in the area too which have addressed the basic problems of lack of access to

forest resources for adivasis and the exploitation of the sahukars. The critical eyes of the whole world being

trained on the region, the state has not been able to crush these movements.

The influence of the Adivasi Mukti Sangathan had reached its peak in 1997 with the massive

public action following the murder of Gyansingh by the staff of the cooperative bank in Barwani. This was

the last straw on the camel’s back. the districts of West Nimar, East Nimar and Barwani where the

sangathan had its influence also happened to be the power base of Subhash Yadav. His men were not only

in a majority in the elected posts to the panchayats, mandis and cooperatives but he had misused his powers

27

to give his followers permanent jobs in these institutions as will be detailed later. Thus he exercised total

control over the activities of these institutions and also that of other government departments. He had been

viewing with concern for sometime the rising influence of the Sangathan and the regularisation of the

working of the mandi in Sendhwa was a major blow. When on top of this the activities of the Sangathan

began to expose the irregularities of the cooperative banks he thought it was time to act.

A local murderous skirmish between the Bhagwanpura block president of the INC and members

of the sangathan around a private dispute was taken as a pretext in August 1997 to launch a massive police

crackdown on the sangathan as a whole. False cases were registered against many members and activists

and they were arrested and jailed. Police terror was unleashed and in many areas adivasis had to flee into

the jungles to avoid getting arrested and beaten up by the police (NCW, 1998). Such was the ferocity of this

repression that subsequently the sangathan has not been able to recover the strength it had prior to it.

Fortunately support from fraternal organisations in the region and human rights organisations all over the

country helped the AMS to tide over this crackdown. Once again this flareup received attention in the press

with the focus being on the antipathy of the government and the bureaucracy towards the legitimate

demands being voiced by the mass organisations of the adivasis (Free Press, 1997).

The work of the adivasi mass organisations continued even after this and spread to Dewas and

Indore districts. The Adivasi Morcha Sangathan capitalised on the early work done by the IDSSS in Bagli

and Kannod tehsils of Dewas district to build up a strong mass base. Eventhough with the 73rd

Constitutional amendment Panchayat Raj has been formally established, its character is more that of an

appendage to the centralised and bureaucratised government that prevails than of an independent challenge

to its corrupt and anti-people character.

The political leaders at the village level are aligned to either the BJP or the INC and so prefer to

serve the narrow interests of these parties rather than the larger interests of the villagers. So much so that

the heads of these panchayats, the sarpanches, have invariably aligned with the sahukars and the state to try

and crush the mass organisations. The experiences of the mass organisations had convinced them that

unless a comprehensive mass challenge could be built up from the village level based on true self rule there

was little chance of a radical change in the policies of the state or locally the malpractices of the sahukars.

Thus the thrust of this new phase of mobilisation was towards the establishment of “Hamara gaon mein

hamara raj” or village self rule based on a strong adivasi self identity (Tadavla, 2001).

A longdrawn nationwide campaign for adivasi selfrule conducted under the aegis of the Bharat Jan

Andolan of which the Adivasi Mukti Sangathan was a constituent had resulted in a special provision being

made in article 243-M of the Constitution that fifth schedule areas would not come under the purview of

the general Panchayat Act and a special Act would have to be enacted to allow the adivasis to develop

systems of local government that accord with adivasi specificities. With the enactment of the Panchayat

Provisions (Extension to Scheduled Areas) Act 1996 by parliament and the subsequent amendment of the

Madhya Pradesh Act in 1997 the gram sabha or village council had been made the paramount decision

making body and so a special local government system to accord with adivasi lifestyle and culture had

28

become a legal possibility. Mobilisation proceeded all over western Madhya Pradesh so as to exert pressure

on the administration towards implementing these provisions.

Since 1999 there has been deficient rainfall in this region. Whereas some tehsils of Barwani and

Jhabua districts have been officially declared drought hit others have not been so fortunate as the harvest

there has not been less than the statutory level of 37% of the normal harvest required for declaring a district

or tehsil as being drought hit. Even after being declared drought hit paltry amounts of between Rs 3 and 4

crores each had been sanctioned for these two districts for relief works over and above the minimal

amounts that are normally available through various Central Government schemes. The rest of the region

had not even got these crumbs.The JMM launched a massive campaign for putting pressure on the

government to carry out sufficient relief works. Plans for soil and water conservation works were prepared

by the people and sanctioned by the gram sabhas and forwarded to the administration for action.

Subsequently rallies, dharnas and even blocking of roads was undertaken. The Adivasi Mukti Sangathan

organised a month long dharna in January 2000 in Barwani and later in Bhopal pressing for relief works to

be started but could get extra sanction of only Rs 1 crore for the district. Even the allocations of cheap

foodgrains for distribution to the BPL families through the public distribution system were not increased.

This failure on the part of the government to provide adequate relief work has resulted in more

number of adivasis having to migrate for work than is normally the case. The problem is that the whole

western Indian region has been groaning under drought conditions for the past three years or so. So even

the places that normally offer work to the adivasis like the towns and cities of Gujarat and Indore and the

intensive agricutural areas of the Malwa plateau and Gujarat have less work to offer. This combination of

less available work and a higher number of migrant workers has depressed wages to well below subsistence

levels all over the region.

The net result is that the sahukars are having a field day. The adivasis are forced to go to these

sahukars in the absence of any other support system and bear the burden of usurious interest rates that have

shot up to levels of 10% per month and more. In Alirajpur tehsil of Jhabua district when the adivasis do not

have even the money for the bus fare to migrate they go to the sahukar and borrow the money from him.

When they return after a fortnight or a month they pay back double the money borrowed. The government

announces support prices for soya bean, maize and wheat each year and orders the cooperative societies to

purchase the produce of the farmers. However, the finances of the cooperative societies being in a bad

shape these have adopted the policy of adjusting the payments due to the farmers for the crops bought from

them against their loan dues. Consequently the farmers who are in need of hard cash are not going to these

societies and selling their produce to the sahukars at the much lower prevailing market prices. Retiring the

high cost debt of the sahukars is more of a priority than repaying the cheaper loans taken from the

cooperative societies when it comes to a tradeoff.

The practice of charging usurious interest rates has become so pervasive that it has penetrated and

vitiated the traditional uchna self-help systems of the adivasis. Many adivasis seeing that usurious

moneylending is a profitable activity have embarked on it. The slightly more affluent among them have

29

taken up this practice and become sahukars and big landlords in their own right destroying the safety net of

the uchna totally in most villages.

The JMM reviewing the situation found that the only way in which things could be improved was

for the government to take action under the various laws at its disposal against the sahukars. Since this was

unlikely given the political power of the sahukars plans were finalised for launching a mass action

programme pressing for punitive action against them. This campaign was to piggy back on the other

ongoing campaigns for access to and control over the main natural resources of forests and water that were

already underway. Given the persistent drought conditions the pressure on these resources had increased

and so had the confrontation with the agencies of the state regarding their proper utilisation. The situation

had become very tense in the areas of influence of the mass organisations by December 2000. A delegation

of adivasi members of the JMM went to meet the deputy chief minister Jamuna Devi on 2nd December to

try and cool down matters. However, they were categorically told by the latter that they should give up

their agitational methods and distance themselves from the non-adivasi activists who she alleged were

foreign agensts out to destabilise the state. She advised them to disband their separate organisations and

join the INC instead !

The GOMP carries out a mass contact programme each year in the month of January called the Jan

Sampark Abhiyan ostensibly to take note of the problems being faced by the people. Led by the Chief

Minister all the ministers, secretaries and other government staff go to the villages in a week long

programme to record the grievances of the people. Apart from a few symbolic actions this charade does not

result in any widespread improvement in the quality of governance in the state and in the end becomes just

a publicity stunt.

In the cabinet meeting held in January 2001 to review the Jan Sampark Abhiyan the spreading

influence of the JMM was commented on and it was decided to crackdown on its various constituents.

Subsequently a highlevel meeting chaired by the Chief Secretary was held on February 17 th 2001 in Bhopal

to work out the modalities of this crackdown. It was admitted in this meeting that the lack of development

and the corruption in government services had led to rising disaffection among the adivasis which were

snowballing into organised protests. However, it was categorically stated that the might of the state

apparatus could not be allowed to weaken in the face of such protests even if they were spurred by valid

grievances and so force would have to be applied to crush these organisations and recourse should be taken

of such laws as the National Security Act and externment proceedings instituted if required to put a stop to

the activities of activists of these organisations (IPT, 2001).

The MLAs of the region held public meetings in various places along with the collectors,

superintendents of police and other officers. Open threats were given in these meetings that unless the

adivasi sangathans disbanded themselves, punitive action would be taken against their members. Following

this repressive action began from the month of March against the Narmada Bachao Andolan, the Adivasi

Morcha Sangathan, the Adivasi Mukti Sangathan and the Adivasi Shakti Sangathan involving raids by

police and forest forces. In the severest of such crackdowns a huge force of some four hundred armed

30

personnel led by the collector descended on the villages of Udainagar sub-tehsil in Dewas district in the last

week of March 2001 without any prior notice, destroying and looting the houses of the adivasi members of

the sangathans and firing on them when they protested leaving four people dead in police firing and many

others injured. As is usual in such cases many activists were jailed on trumped up charges (IPT, Op. Cit.).

Eventhough the state has not been able to achieve its objective of wiping out the adivasi mass

organisations through this latest repressive crackdown, primarily because of the national and international

opprobrium it has invited as a consequence of its grossly illegal acts and a pending enquiry by the National

Human Rights Commission, it has certainly set them back quite a bit. Most importantly the impending

campaign against the sahukars has had to be shelved for the time being in order to cope with the fallout of

this repression and to get the sangathans back on their feet. The sahukars of Udainagar who had reduced

their interest rates to 25% annually for fear of action by the sangathan have hiked them back up to the

previously high rates of 10-15% a month again seeing that it was in disarray. To cut a long story short this

is why Bondar of Hirapur village when he needed the money for the payment of his court fine did not have

the earlier support structure of a strong sangathan to fall back on and had to borrow at this exorbitant rate.

So despite the herculean efforts put in over the past decade and a half by the adivasi mass organisations,

sahukars continue to rule the roost in western Madhya Pradesh. An analysis of the various structural factors

that contribute to the perpetuation of this rule of the sahukars will reveal the deep roots of this problem.

An Unfettered Leviathan

The Indian economy, like many others of the third world, is an underdeveloped one situated on the

periphery of the international economy which is dominated by the group of developed economies known as

the G7 countries of United States of America (USA), Canada, United Kingdom, France, Italy, Germany

and Japan (Wallerstein, 1974). These have all been imperialist countries which have historically built up

their economies by direct or indirect colonial exploitation of hundreds of countries like India in south and

central America, Africa and Asia (Bagchi, 1982). Capitalist industrial development in the former set of

countries was fuelled by surpluses extracted from the latter set by their forced deindustrialisation and a

strengthening of precapitalist forms of exploitation in their agricultural sector leading to a rise in its share in

both employment and production in these countries in the nineteenth century. As we have seen in the case

of India, the imperialists built up an elaborate repressive state structure and created a class of collaborators

in the colonised countries to facilitate this process.

Inter-imperialist rivalry became a major feature of the world economy from the beginning of the

twentieth century. The discovery of crude oil and the invention of the internal combustion engine and

electricity resulting in massive increases in both industrial production and its transport led to a

corresponding increase in competitive world trade. It was no longer possible to hold on to the markets of

the colonised countries by imperialist preference alone. So in India to counter the threat from cheap

manufactures from USA and Japan the British were forced to introduce some capitalist industrial

development in basic infrastructural industries and in the production of cotton cloth. The more enterprising

among the trader-moneylender and princely classes mutated to become nascent capitalists in collaboration

31

with and in subordination to imperial capital and this process continued through and was enhanced by the

two inter-imperialist world wars and the intervening period of worlwide recession when production

nosedived in the imperialist countries (Ghosh Op. Cit.).

The USA emerged as the leader of the G7 group after the destructive second world war and it led

the group in setting up a more stable international economy under the supervision of the International

Monetary Fund and the International Bank for Reconstruction and Development (World Bank) which has

come to be called the Bretton Woods system after the venue of the conference held in 1944 to agree on

their formation (Clairmont, 1994). The huge surpluses that the USA had garnered from the war were

funnelled into the reconstruction of Europe and Japan so as to rebuild the core of the world economy and

the erstwhile colonies were relegated to its periphery to suffer the new system of neo-colonial exploitation

through adverse terms of trade and longterm debt, euphemistically called aid, that was put in place (George,

1988). This system of unequal exchange in world trade has entrenched itself over the years and has finally

led to the establishment of the World Trade Organisation (WTO) to try and smoothen this process and free

it from the inevitable hiccups that rock it from time to time. With the collapse of or de facto if not de jure

conversion of the erstwhile socialist economies to this system and the formalisation of the entry of China

into it recently, there now exists a truly globalised world economy.

The British transferred power in India at the time of independence to a ruling coalition consisting

of the nascent capitalists, the feudal classes and the bureaucracy (Bardhan, 1985). The capitalists looking

ahead to the situation that would prevail after independence came up with a national plan in 1944,

popularly known as the Bombay Plan, which spoke of both strengthening their ties with imperialist capital

and at the same time of protecting the Indian market from predatory penetration by the latter (Thakurdas et

al, 1944). The Bombay Plan also envisaged the rapid development of basic infrastrucure through heavy

state spending garnered from exploitation of the labour of the masses and the vast natural resources. It

specifically mentions that the state must intervene to maintain law and order and restrict individual

freedoms given the possibility of dissent from the masses against such a policy.

Thus the capitalists needed a strong state apparatus for their development and this suited the

interests of the higher bureaucracy and so they collaborated to put together the high quantitative and tarrif

barriers, the “license-permit raj” and the public sector industries all of which have come to be so maligned

since the decade of the nineties when their utility was over. Ideally both these sections of the ruling

coalition would have liked the third element of feudal classes to be eliminated to facilitate the capitalisation

of agriculture and greater monetisation and marketisation of the rural economy. However, this last class had

been such a solid mainstay of British rule in India that it exercised economic and extra-economic control

over a large section of the masses and had also penetrated the bureaucracy. Consequently they dominated

the formal democratic structure that was put in place after independence and so retained considerable

power within the coalition. Thus all over India they succeeded in nullifying or weaving their way around

legislation enacted to end their domination as we have seen in the case of western Madhya Pradesh.

32

As can well be imagined this concatenation of developments could only bode ill for the adivasis.

The presence of articulate adivasi leaders like Khan Abdul Ghaffar Khan and Jaipal Singh resulted in the

debates in the Constituent Assembly reverberating with eulogies for the inherently democratic and non-

exploitative nature of adivasi communities and the expression of concern about enabling them to negotiate

the process of integration into the modern economy to their advantage (GOI, 1954). Consequently

extensive provisions were made in the Constitution and many laws were passed for the protection and

betterment of the adivasis. Nevertheless, the imperatives of modern industrial development as enunciated in

the centralised planning process initiated from the early 1950s and the powerlessness of the adivasis in the

face of the ruling coalition of resulted in a policy of intrusion into adivasi areas being adopted to exploit

the vast natural resources that these held.

Thus the tone of the actual state policy that evolved for adivasi areas in Madhya Pradesh was

distinctly unfavourable to them - “ top priority has been given to a programme of rapid industrialisation and

extension of means of communication to the most interior regions in the State. Our firm view is that the

development of land and agriculture alone will not be adequate for the rehabilitation of the tribal

communities. Agricultural land is insufficient and cannot serve the needs of even half the tribal population

of the State. Fortunately, the tribal areas of the State are rich in industrial and power potential. There is no

reason why in the wider interest of the nation and in the long-term interest of the tribals themselves,

industries should not be developed and localised in tribal areas” (NCAER, 1963: vi).

The assumption that industrial development in adivasi areas is in the long-term beneficial to them

has been proved to be totally fallacious (Mahapatra, 1994). The industrial estate set up on adivasi lands in

Pithampur in Dhar district in the 1980s provided cheap land and other subsidised infrastructure to the

industrialists along with tax-holidays but the displaced adivasis were given only pittances as compensation.

Not being educated or skilled they did not get any of the permanent jobs that were created and are even

today working as casual labourers. Pithampur and Indore in fact draw in adivasis from the whole western

Madhya Pradesh region as casual labourers. This is because insufficient attention has been paid to

developing the productivity of dryland agriculture on sub-optimal soils on which the adivasis are dependent

following on the other fallacious assumption in the above policy statement that agricultural land was

insufficient at that point of time to provide suitable livelihoods to the adivasis. An assumption that forms

the basis of the destructive dam building activity of the Narmada Valley Developnment Authority

undertaken to give a fillip to green revolution agriculture and further inconvenience the adivasis.

The introduction of green revolution agricultural techniques in the region from 1964 onwards have

only served to compound matters. Despite initial gains in productivity this variety of agriculture has

become seriously problematical in recent times with the twin dilemma of escalating costs and declining

yields (Rahul & Nellithanam, 1998). HYV seeds, power, fertilisers and water supplied at state subsidised

rates and the assured sale of the higher amount of produce at government supported prices initially

provided the farmers with higher incomes and the state with higher agricultural production. However, the

worsening of public finances over the years, primarily due to retarded industrial development resulting

33

from India’s weak position in the world economy and the overall poor performance of the agricultural

sector apart from the few green revolution pockets, has led to the progressive withdrawal of these subsidies

and the reduction of state purchases at support prices. Simultaneously the deterioration of the soils through

continuous application of ever increasing doses of chemical fertilisers, the drastic lowering of the ground

water table, the salination of soils due to excessive flood irrigation and the erosion of indigenous landraces

of seeds have all created a severe environmental crisis in the region.

Locally the benefits of green revolution agriculture were cornered by the sahukars who traded,

often also providing credit to the farmers, in the inputs and also in the increased output. The large and

middle farmers too benefitted immensely by earning huge surpluses from low production costs due to

subsidised inputs and an assured sale of their produce at government supported prices. Their profits were

that much greater as they used their extra-economic powers over the landless or marginal adivasi and dalit

labourers and succeeded in keeping the wages depressed at minimal subsistence levels. Indeed with the

reduction in the acreage under coarser cereals and pulses and the greater monetisation of the rural economy,

the mostly landless and marginal farmer adivasis have had to buy their food from the market and this has

reduced their nutritional levels well below healthy standards (Khaparde, 2001). Thus they too have become

sufferers of the probkem of chronic hunger that today engulfs the poor in much of the third world (Dreze

&Sen, 1989).

The bureaucracy has tended to favour this dispensation. The attempts on the part of the JMM to

institute proceedings for the return of illegally usurped adivasi land under the provisions of section 170(b)

of the Madhya Pradesh Land Revenue Code 1959 have met with bureaucratic intransigence. In one such

notable case Dhansingh Ramsingh of Udainagar village and his brothers had lodged a complaint with the

SDM in Bagli against Gopal Maheshwari for the return of the land that the latter had forced them to

formally sell to him for a pittance as payment for a loan that their father had taken. They won the case in

Bagli but the sahukar went in appeal to the Collector in Dewas. There too the case went in favour of the

adivasis. The sahukar then appealed to the Commissioner in Ujjain. The Commissioner struck down the

Collector’s decision arguing a moot technical point that the Bhilala tribe had not been declared a scheduled

tribe in 1961 at the time of the purchase. The case is now pending in the court of the Revenue

Commissioner in Gwalior.

Similarly the struggles for the implementation of a minimum agricultural wage too have met with

the same bureaucratic antipathy. The adivasis of Katkut village in Khargone district launched a campaign

in 1998 for the payment of the statutory minimum wage and the end of the practice of bonded labour that

prevails in a hidden form in the Nimar region. At the height of the struggle the adivasis struck work in the

fields of the non-adivasi farmers just at the time when the cotton crop had to be harvested successfully

hiking up the wage rates for sometime. However, false cases were lodged against the leaders of this

struggle and they were arrested and beaten up in custody. Simultaneously labourers were brought in from

other areas to break the second follow up strike to protest this administrative highhandedness. So the

campaign eventually fizzled out. When a delegation of women labourers went to meet the Commissioner in

34

Indore to complain about this the latter admonished them for having caused a national loss by striking work

and letting the cotton crop get dispersed in the wind without being harvested!

Politically green revolution agriculture has led to the rise of the middle and big non-adivasi

farmers as the dominant class in the region superseding the sahukars and the erstwhile princes and thus

getting precedence in the misuse of state privileges which has been the hallmark of democratic politics in

this country. Subhash Yadav’s political career epitomises this as nothing else does. Beginning with being

elected to the mandi samitis and the cooperative societies Yadav soon graduated to the Vidhan Sabha and

Lok Sabha. He simultaneously progressed up the setup of the mandis and cooperative societies. When the

INC came to power in Madhya Pradesh in 1993 he became the deputy chief minister and also the chairman

of the Madhya Pradesh Mandi Board.

To buttress his position in Nimar, Yadav made a series of illegal recruitments in the Mandi Board

to accommodate his apparatchiks which were challenged by his opponents and led to an enquiry by the Lok

Ayukt in which he was indicted and on the latter’s recommendation he was removed from the chairmanship

of the Board (Lok Ayukt, 1997). He then became the chairman of the State Cooperative Bank of Madhya

Pradesh. Here too he indulged in similar malpractices that caused a loss of about Rs 3.5 crores to the Bank

and was once again indicted by the Lok Ayukt (VSS, 2000). After the reelection of the INC to power in

1998 Yadav was initially not given a ministership and excluded from the cabinet. He immediately launched

a campaign against the government regarding the malfunctioning of the mandis. This campaign gathered

considerable momentum because the farmers are indeed dissatisfied with the way the traders manipulate

the working of the mandis to their advantage. So the chief minister was forced to reinduct him once again

as the deputy chief minister in 1999 and immediately he stopped his campaign for the reform of mandi

administration.

Thus India’s subordinate position in the world economy, the continuance of pre-capitalist forms of

exploitation in rural areas, the repressive and anti-people character of the bureaucracy inherited from

colonial times, macro-economic policies that have favoured the non-adivasi ruling classes at the expense of

the adivasis and the near total domination of the state apparatus by the former has created a situation

wherein by and large adivasis are doomed to living in poverty and perpetual debt bondage in conditions

that can at best be described as being internally colonial despite the operation of more than fifty years of

formal centralised democracy in India and almost a decade of grassroots democracy through Panchayat Raj

in Madhya Pradesh.

Since any organised mobilisation challenging this Leviathan of an unholy alliance threatens its

hegemony, the state has come down heavily to crush any such mobilisation even if it is wholly within the

limits prescribed by the Constitution and prevent it from snowballing into a major movement that can break

this hegemony. Apart from the Lal Topi Andolan of the Socialist Party, the Communist Party of India too

had carried out anti-feudal struggles in the region in the 1950s and 1960s only to meet the same fate as the

former. The elected adivasi representatives and also those adivasis who are a part of the bureaucracy and

constitute the elite among the adivasis have considered prudence to be the better part of valour and

35

participated enthusiastically in the exploitation and repression of their brethren as is evident from the

actions of Jamuna Devi. No wonder then that despite the tremendous fight being put up by the various

constituents of the JMM, this Leviathan continues to devastate the adivasis largely unfettered. Nowhere is

this more evident than in the abject failure of the institutions set up to protect the adivasis in western

Madhya Pradesh.

Protectors as Predators

The World Bank in its latest development report has stated that the efficient working of markets

depends crucially on the transparent functioning of regulatory or support institutions (World Bank, 2001).

According to the Bank tangled laws, corrupt courts and bureaucracies and deeply biased credit systems all

end up hurting poor people as we have seen so vividly in the case of western Madhya Pradesh. Here we

shall restrict ourselves to reviewing the functioning of the three institutions of commercial banks, rural

credit cooperative societies and self help groups which have the potential to play a crucial role in the

elimination of the rule of the sahukars in western Madhya Pradesh.

Commercial Banks

According to the results of the All India Debt and Investment Survey 1991-92 conducted by the

NSSO in collaboration with the RBI, the share of the commercial banks and cooperative societies in the

loans disbursed to rural households had gone up from 22.3% in 1971 to 55.3% in 1991. Simultaneously the

share of moneylenders and traders had gone down from 55.6% in 1971 to 20.1% in 1991 (RBI, 1999b). As

mentioned earlier these data do not shed light on the extent to which institutional finance has succeeded in

reaching the adivasis. Thus it is impossible to make any quantitative assessment of the performance of the

commercial banks with respect to the adivasis of western Madhya Pradesh. However, the survey does

reveal the inability of these banks and even the regional rural banks sponsored by them to adequately

service the needs of marginal farmers and landless people throughout the country and this applies to the

adivasis of the region too.

The banks have in fact done nothing for the adivasis on their own initiative. As mentioned earlier

they have only acted as conduits for channelising central government funds under various poverty

alleviation and community development programmes. Political interference and corruption in the

disbursements of these funds along with the practice of mass writing off of small loans at election time and

the unviability of most shcemes has meant that neither has poverty been reduced nor has a sound rural

banking sector developed as a result of these policies (RBI, 1993). Often assets have either not been created

or already created assets have been shown to have been acquired with these loans and the money used for

other purposes. Though this is rampant all over the region in the case of adivasis the leakage is much

greater on account of their powerlessness.

An example of this kind of waste of scarce resources is the distribution of diesel pumpsets to

adivasis in Petlawad tehsil of Jhabua district in the fiscal year 2001-02. This area has been suffering under

drought conditions for the past three years and so except for the few villages in which the NGO Sampark

has done water conservation works wells in other villages have dried up. Nevertheless the Block officials,

36

the bank managers and the traders who are also the political leaders have colluded to supply the adivasis

with diesel pumpsets on loans that have been sanctioned in a jiffy. Since there is no water available the

adivasi beneficiaries of these loans have not even opened the packing of these pumpsets and they are lying

idle! The government data will show that there has been an increase in capital formation while the reality is

quite different altogether.

The change in scenario with the onset of economic liberalisation policies from the decade of the

1990s and the insistence on prudential norms has prompted the banks to jettison this load of social

obligations with adverse consequences for the availability of credit to the agricultural sector. The rural

credit-deposit ratio of commercial banks which was 43.08% in 1971 and rose to a high of 65.73% in 1986

has since declined to 44.98% by 1998 (RBI, 1998) indicating an enhanced drain of savings from the rural

areas. Similarly the share of small borrowal accounts, which have a high proportion of marginal rural

borrowers among them, which was as high as 20.5% of the amount of all loans outstanding of commercial

banks in 1984 had come down to 14.2% by 1996 (RBI,1999a). The net result has been that whereas the

decline in capital formation in agriculture through public expenditure during the 1970s and 1980s was

partly offset by private capital formation financed by bank credit during that period, there has been a sharp

decline in this in the decade of the 1990s seriously affecting the viability and productivity of agriculture in

the last decade all over the country (Majumdar, 1997). This is even more starkly evident in the adivasi

areas of western Madhya Pradesh which, having been outside the pale of the green revolution thrust, had

been neglected even during the heyday of rural banking.

Credit Cooperatives

The evolution of the cooperative movement in India dates back to the enactment of the

Cooperative Credit Societies Act of 1904 (Craig, 1992). It grew out of the need to break the vicious circle

of poverty of farmers accentuated by famines, low productivity and perpetual dependence on usurious

moneylenders. Subsequent to this the cooperative sector bloomed and much more legislation was enacted

during British rule to support this development. The cooperative credit societies and banks were the sole

institutional agencies for mobilising savings and providing credit in rural areas at the time of independence.

Thereafter the Reserve Bank of India formed an All India Rural Credit Survey Committee (AIRCSC) to

review the operation of the credit cooperatives and suggest ways to consolidate the sector so as to help it to

more effectively foster agricultural development. The committee recommended the reorganisation of the

sector based on state participation for its rapid expansion, coordination with cooperative institutions

involved in the important activities of marketing and processing of agricultural produce and the

management of these cooperatives by adequately trained professional staff (RBI, 1954).

Following on this there was a massive expansion of the cooperative sector in rural areas primarily

under state patronage as a quasi-government department. In Madhya Pradesh there is a three tier system in

operation with primary agricultural credit societies with service area of a few villages federated with the

district credit cooperative banks which in turn are federated with the State Cooperative Bank at the state

level and these are bound by the provisions of the Madhya Pradesh Cooperative Societies Act 1960. Apart

37

from these there are also the Land Development Banks which provide longterm loans for capital

investments in agriculture. In adivasi areas this set up takes on a totally bureaucratic character as the

adivasi members of these societies and their elected representatives have little knowledge of its functioning.

So as we have seen in the tragic case of Gyansingh in Barwani district, the adivasis’ relationship with the

cooperative banks is little better than that with their sahukars. Moreover, as mentioned earlier, due to the

process of mutation of title to lands on the death of the owner to his heirs does not take place easily because

of corruption and sloth in the revenue department, many adivasi landholders are officially not recorded as

so and are unable to avail of the services of the primary cooperative societies.

This overbureaucratisation and the excessive dependence on borrowed funds from the state

government, RBI and NABARD have meant that independent deposit mobilisation by the cooperatives

themselves has been very low. The state government while strengthening the capital base of the

cooperatives through share participation actually draws more out of these cooperatives through the

stipulation that a certain percentage of the latter’s funds must be kept with it in the form of government

securities. Thus the rural credit cooperatives in Madhya Pradesh have become heavily dependent on

refinance from NABARD for continuing their operations. The primary cooperatives which do the bulk of

the lending to the adivasis do not have direct access to the cheap NABARD funds but have to get them

through the mediation of the state and district cooperative banks which substantially increases the cost of

their funds. Various inefficiencies in operation too hike up transaction costs. This combined with bad loan

appraisal processes and low recovery levels have meant that the proportion of non-performing assets (NPA)

has gone up as a percentage of the total loan portfolio continually. Some statistics regarding the NPAs of

the district credit cooperative banks (DCCB) of the region and the Madhya Pradesh State Cooperative

(MPSCB) and Madhya Pradesh Land Development Banks (MPLDB) are given in Table 4.

A significant fact to come out of this data of non-performance is that the adivasi dominated

districts of Jhabua and West Nimar are the only ones with respectable NPA ratios. Eventhough Dhar

district too has a majority adivasi population nevertheless the powerful non-adivasis here are former

princes and feudal lords and so are able to bend the system to their advantage at will. An analysis of the bad

accounts for Dhar DCCB if data were available would reveal the extent to which adivasis are responsible

for them. This confirms the easily observable fact that the adivasi debtors of the cooperative banks

generally are forced to repay their loans on time by the use of extra economic pressure. The DCCBs of

Dewas, Dhar and East Nimar have suffered heavy erosion of their assets and accumulated considerable

losses and are not complying with the provisions of the Banking Regulation Act 1949. Incidentally the

NPAs of the State Cooperative Bank include funds loaned out to the sick Nimar Cotton Mill in West Nimar

district, which is run by a cooperative society formed by Subhash Yadav, flouting all norms of loan

appraisal.

38

Table 4: NPAs of MPSCB, MPLDB & DCCBs of Western M. P. as on 31.3.2000 (Rs lakhs).

Name of Bank

Total Loan Outstanding

Standard Sub- Standard

Doubtful Loss Asset

Depreciation in Investments

Total NPAs

NPA/ Total Loan Outst. %

MPSCB 141718.50 119125.14 15729.74 366.13 0.04 - 16095.91 11.36MPSLDB 62755.00 51364.47 9221.14 2189.39 - - 11410.53 18.18Jhabua DCCB 3762.41 3563.75 113.79 85.87 - 7.58 207.24 5.51W.Nimar DCCB* 19693.43 16353.60 278.45 253.89 79.49 1.00 612.83 3.11Dhar DCCB 7080.74 5731.30 554.82 798.28 325.82 - 1678.92 23.71E.Nimar DCCB 13127.11 10939.79 1442.25 745.07 - - 2187.32 16.66Ratlam DCCB 3822.50 3375.30 249.74 197.11 - - 446.85 11.69Dewas DCCB 6096.58 4378.11 1092.56 611.16 14.75 - 1718.47 28.19Indore DCCB 11346.30 9423.17 1450.31 465.61 7.21 - 1923.13 16.95* Includes Barwani district which was created in 1998 but which did not have a separate DCCB at the time of this audit report.

Source : Registrar of Cooperative Societies, Madhya Pradesh.

The AIRCSC all of fifty years ago had found that the cooperative movement had failed to curb the

influence of moneylenders in the rural financial markets and had suggested measures to strengthen it. Since

then there have been innumerable other committees from time to time that have reviewed the augean stable

of graft and inefficiency that the rural credit cooperative system has become, the two latest being the Task

Force formed by the Government of India to suggest measures to strengthen the cooperative credit system

which submitted its report in August 2000 and the committee formed by NABARD to suggest means to

revitalise the rural credit system which submitted its report in July 2001 (Das, 2001). The common points

that have emerged from these are as follows. Excessive state control and the resultant bureaucratisation has

killed the spirit of participation among members of the cooperatives and they have become passive

onlookers. This state interference has resulted in atrocious loan appraisal systems and consequent on them,

poor loan recoveries and excessive transaction and administrative costs. Dependence on refinance from

NABARD and RBI has led to poor deposit mobilisation on the one hand and mounting overdues on the

other. A low capital base combined with an inability to provide a variety of financial services at the

grassroots level has impaired their growth prospects. Thus the rural cooperative banks are at present neither

cooperatives nor banks in the true senses of those terms but just inefficient quasi-governmental entities.

The situation prevailing in western Madhya Pradesh reflects all these ills in full measure.

NABARD has set down clear criteria for the refinance of rural cooperative banks. These are that

the purposes for which loans are advanced should be technically feasible and the organisations or

individuals undertaking them should be financially viable and there should be arrangements to ensure close

supervision of their performance (http:\\www.NABARD.org). Despite the cooperative banks in Madhya

Pradesh violating some or all of these criteria and as many as 32 of the 38 DCCBs including the three from

western Madhya Pradesh not complying with the provisions of the Banking Regulation Act 1949,

NABARD as the regulatory agency has not been able to improve the state of affairs indicating that the

problems are deeply structural in nature and do not afford easy solutions.

39

Micro-finance

This failure of the elaborate network of commercial banks, regional rural banks and the rural

credit cooperatives to address the credit needs of those living below the poverty line has led to the search

for alternatives resulting in the micro-finance boom of the 1990s. The deleterious effects on the livelihoods

of the poor of structural adjustment policies adopted by Latin American and African countries in the 1980s

had also become evident by the end of that decade (Zuckerman, 1991). This prompted the World Bank to

review these policies and search for ways in which “growth with equity” could be ensured and poverty

“attacked” (World Bank, 2000). The initial success of some NGO initiatives in providing easy access to

credit to the poor in Bangladesh and Indonesia and a consequent reduction in their economic vulnerability,

was picked up and modified by the World Bank and formalised into a model to be replicated worldwide.

When the World Bank puts its imprimatur on any development innovation it becomes a buzzword as has

happened with Joint Forest Management (JFM) earlier and now micro-finance. Unfortunately like in the

case of JFM (Samata & CRY-Net, 2001) the more famous early experiments in micro-finance too have

begun to come asunder as will be detailed by and by.

Micro-finance in fact is nothing new as various informal community credit support mechanisms

have existed in western Madhya Pradesh since pre-colonial times. The traditional uchna system prevalent

among Bhil adivasis of the region has already been mentioned. There is also the “bisi” system that

originated in Maharashtra and was introduced into western Madhya Pradesh by the Maharashtrians who

came and settled there after the establishment of the Holkar state there. The basic way in which a bisi

operates is that all its members deposit an agreed amount each month. Those among the members desirous

of borrowing the total amount thus collected have to give in writing the premium from this amount that

they are prepared to forego for the privilege of using the money. The person who is prepared to forego the

highest amount gets the total money less the premium, which is kept as deposit with the coordinator of the

bisi. Those withdrawing money at the beginning of a bisi cycle obviously have to pay a higher premium

because bidding is fierce while those borrowing towards the end pay less for having waited so long. At the

end of a cycle the total amount of premiums left in the bisi is distributed equally among its members and a

new cycle started. Thus the bisi is basically a rotating savings and credit association without any

accumulative component. On an average the cost of funds is very much less than the amounts that would

have had to be paid as interest for borrowing from sahukars.

Both the uchna and the bisi are effective systems for meeting the short term credit needs of the

poor. However, they cannot build up a continually increasing fund that can over time address the heavier

longterm credit needs and so obviate the need to go to the sahukar. In this respect the self help groups

(SHG) are definitely an improvement as they have an accumulative component. Moreover, by linking up

with banks these groups can access greater amounts of credit than would have been possible on the strength

of their own savings. This linking up with banks and the consequent reduction in the transaction costs of

credit delivery by financial institutions to a marginal clientele and better loan recovery through the use of

group pressure has been publicised as the distinguishing feature of the micro-finance movement of the

40

1990s (http:\\www.cgap.org). However, unlike as in the case of the uchna or the bisi the operation of SHGs

requires formal rules and paperwork which increases with time as do the legal requirements. So while the

former can easily be run on their own by communities of people who are illiterate or semi-literate the

successful operation of the latter by such groups and especially by adivasis requires the intermediation of

NGOs with adequate socially oriented financial expertise.

Given the weakness of the economic foundation of their poor participants all these systems of

micro-finance are plagued with the ever present problem of moral hazard described earlier. The uchna has

collapsed almost totally given the high levels of deprivation that the adivasis face. The bisi too is not

always successful as midway through a cycle some or all of those who have already withdrawn money may

decide to desert the group and bring about its collapse. In the case of SHGs only strict monitoring by the

NGOs which have promoted them can ensure that the repayments of loans and the regular monthly deposits

take place on time as group pressure does not always succeed. But without larger macro-economic policies

that increase income opportunities for the rural poor through large investments in agricultural infrastructure

that can promote sustainable livelihoods any small or large shock like a serious illness or a drought or a

flood can upset the precarious balance between the income and expenditure of poor households that has

been achieved through the SHGs. The Grameen Bank of Bangladesh which kicked off the micro-finance

boom has become the victim of this basic economic weakness of the poor and has had to resort to

rescheduling of loans by cross lending across various schemes to stay afloat

(http://nt1.ids.ac.uk/cgap/html/gramhl.htm).

The rural SHGs since they are not operating in a political vacuum cannot be sanitised from politics

and kept restricted to the financial sphere only. Invariably they have sooner or later to contend with local

political pressures. Given the competitive electoral system of the panchayats it is only to be expected that

the more successful SHGs will want to control these institutions so as to have control of the development

funds that are being channelled through them. If several SHGs in a particular area are being organised

through the intermediation of the same NGO then the opportunities for united political action are even

greater. This will bring them in conflict with the interests of the established political parites which in turn

will try to break their unity through fair means or foul. The developments leading to the murder of sister

Maria described earlier bear gruesome testimony of such a possibility.

A considerably more disturbing phenomenon is that of the misuse of the SHGs by multinational

companies (MNC) for providing access to markets that had previously been unapproached by them. The

Grameen Bank of Bangladesh introduced a scheme of pay-phones to be run on mobile phones by rural

women to augment their incomes. This provided the Motorola company with access to a rural market that it

could never have dreamed of. It is not clear as to how much this scheme has benefitted the women who

have incurred a debt to set it up in terms of additional earnings but Motorola has definitely earned windfall

profits. Similarly Hindustan Lever Limited is leveraging its control over the women members of SHGs

sponsored by it in Nalgonda district of Andhra Pradesh under Project Shakti to use them to push sales of its

soaps and shampoos. Digvijay Singh, the chief minister of Madhya Pradesh, in his invitation to MNCs to

41

set up production units in the state, has mentioned the increase in the purchasing power of the rural poor

due to the successful operation of the Swashakti Yojana as an incentive (Sharma, S, 2002, Corporatisation

of SHGs, http:\\www.panchayats.org/dnrm_maillist.htm).

The experience of the operation of micro-finance worldwide has shown that with proper

intermediation by NGOs this paradigm does improve the access of previously deprived poor populations to

institutionalised credit with the reduction of transaction costs (NABARD, 1999) and so reduces their

economic vulnerability. However, if the costs of this crucial intermediation by NGOs in the formation and

operation of SHGs, which is at present being met by outright grants or by the supply of subsidised credit

from funding agencies, are factored in, then the economics of micro-finance begins to wobble. Thus

without grant support the longterm viability of micro-finance is in doubt. As we have seen the cooperative

movement in this country too was sought to be spread through state support to make it more broadbased.

But in the end such support killed the spirit of cooperation and converted it into a government department.

Micro-finance too stands in danger of being overwhelmed by such self defeating bureaucratisation through

its institutionalisation. At least in the case of cooperatives the members do have the right to control the

affairs if they show enough awareness and gumption. In the case of micro-finance, however, the SHG

members have little control over the actions of the NGOs and their sponsors. Without proper regulation

there is the danger of the funds saved by the poor from their meagre earnings being misappropriated by

unscrupulous operators among NGOs as has happened in the case of non-banking financial companies.

In 1999-2000 the state cooperative banks and regional rural banks all over India cumulatively

received Rs 7086 crores as refinance funds from NABARD while 114755 SHGs linked to banks

cumulatively got only Rs 195 crores upto March 2000 (http:\\www.nabard.org/oper/oper.htm). The

governments at the centre and in the states faced with a funds crunch are trying to extricate themselves

from the mess that has been created in the cooperative sector by urging it to become more businesslike as is

being done with the nationalised scheduled banks and so it is not likely to support the SHGs with hard cash

to the same extent as it has supported the cooperatives and banks in the past. This is why MNCs like

Hindustan Lever are having to be approached to fund SHGs. At present there are only a very few SHGs in

western Madhya Pradesh and even fewer which are running well. Consequently there is little chance of

micro-finance emerging as a major challenge to the rule of the sahukars in the informal rural financial

markets of the region and there is the danger instead of it being used as a handy tool by MNCs for widening

their market outreach. Indeed if the institutional funds routed through micro-finance begin to increase, there

is every likelihood of sahukars forming NGOs and using their political power to misappropriate them on

the pretext of routing them to SHGs as they have done with other development schemes.

We see, therefore, that unless the structural obstacles to the removal of poverty and the

empowerment of the poor that have been previously described are removed, extending institutionalised

credit delivery to the poor alone does not suffice in improving their lot. Invariably the functioning of these

institutions are distorted by the powerful in their favour at the expense of the poor. Moreover, efficient and

cheap financial intermediation is not an end in itself but only a cog in the wheel of rural development.

42

Unless effective steps are taken to promote egalitarian and sustainable rural development on a large scale

there cannot be a successful attack on poverty just on the strength of superficial initiatives in the financial

sphere alone.

Towards a Green India

There is universal agreement that one of the important factors behind the strong economic

performance of the states in east Asia and their success in the reduction of poverty is their implementation

of drastic reforms in the rural sector to free it from feudal control and modernise it and bring it in line with

the industrial sector which resulted in dynamic growth in both sectors in those countries (World Bank,

1993). A dynamic rural sector with increased incomes for the rural poor results in increased demand for

wage, consumer durable and capital goods produced by industry. This was not possible in India because of

the considerable power that the feudal classes wielded at the time of independence. This in fact is also the

reason why the expectation of our early planners that heavy investments in basic infrastructure creation

would trickle down to the deprived masses in the form of greater employment and increased incomes did

not materialise (Chaudhury, 1978).

A more serious lacuna with planning so far has been that the infrastructural investments that were

made in the agricultural sector were themselves misconceived. The vast majority of farmers in India

cultivate small plots of land on terrain that is unsuitable for flood irrigation and they have traditionally been

driven by the desire to produce for subsistence rather than for profit. They have over thousands of years

developed a system of agriculture that makes the most of the locally available resources in terms of seeds,

organic fertilisers, soil moisture and natural pest management. This led Sir Albert Howard, the pioneer of

modern organic farming who did most of his work in Indore, to remark some sixty years ago, “What is

happening today in the small fields of India ... took place many centuries ago. The agricultural practices of

the orient have passed the supreme test, they are as permanent as those of the primeval forest, of the prairie,

or of the ocean” (Howard, 1940). The clever use of rotation of a bewildering variety of crops ensured that

despite flood and drought some part of the harvest was always saved. Famines occurred not because of the

failure of agriculture but because of socio-economic factors such as excessive levies by kings and colonial

rulers or due to usury and hoarding by sahukars (Patnaik, 1991).

Thus what was necessary after independence was to remove the obstacles in the path of

development of this traditional agriculture and strengthen it with further research and credit support.

Studies have shown that the indigenous agricultural practices of India, which have been honed by farmers

over the centuries, are as productive as the HYV seeds and artificial input based green revolution

agriculture (Richharia & Govindaswamy, 1990). Nevertheless, at the behest of the research foundations set

up by American MNCs and with financial support provided by the World Bank, green revolution

agriculture was promoted in a few pockets leaving the other areas literally high and dry. This form of

agriculture has become problematical throughout the world and can be continued only through the

provision of massive state subsidies to the farmers and the MNCs that produce its inputs and trade in its

outputs (Gorelick, 1998). The direct government subsidy to agriculture in the USA in 2000 amounted to

43

US$ 22.9 billion and constituted about 40% of the net cash income derived by it. The biggest 10% of the

recipients of these state subsidies which are mostly MNCs cornered 66% of this huge amount (http:\\

www.wtowatch.org/library/admin/uploadedfiles/WTO_Agreement_on_Agriculture_Dvstate_US.htm) In

this way the comparative advantage that the third world countries have in the agricultural sector is not only

sought to be neutralised but the excess production thus achieved is dumped in those countries devastating

their agricultural sector. In fact the recent Doha summit of the WTO brought out as never before the

hollowness and hypocrisy of the WTO’s claims of promoting “free trade” (Thamarajakshi, 2002).

According to an estimate the input subsidies in India’s case had reached the unsustainable level of

164.02% of the central government’s planned annual expenditure on agriculture by 1992 (Gulati & Sharma,

1995). When we also count the subsidy that is being given by the government to procure the produce of the

farmers at artificially supported high prices which has created the absurd situation of an unmanageably

huge stock of foodgrains with it, the unsustainability of this kind of agriculture becomes even more

pronounced. Over and above there are tremendous social and environmental costs associated with this kind

of agriculture which have been externalised but which have now begun threatening the whole world’s

social and food security and bio-diversity (Shiva, 1991).

The tremendous economic and political power that the MNCs like Monsanto have, which are in

control of the input industries, the agricultural processing industry and marketing entities, has meant that

instead of turning to more sustainable agricultural practices this crisis in modern agriculture is being sought

to be solved through the application of even higher and far more costly bio-technology. This involves

further state subsidies given the higher levels of funding required for the expensive research and application

techniques involved. Consequently a fierce subsidy and tarrif war is raging among the developed nations

which are home to these MNCs that has become an embarrassing stumbling block in the further

liberalisation of world trade in agricultural produce under the auspices of the WTO (http:\\

www.wtowatch.org. USEU_still_blocking_a_dev_round_at_the_WTO.htm). Unfortunately the government

in India too has embarked on this process despite the fact that it does not have the means to finance such

further development on its own and can do so only by mortgaging the agricultural sector to the MNCs and

the international development finance institutions.

Thus eventhough disturbed by the fall in the share of public expenditure in the growth of capital

formation in agriculture, which has gone down sharply from 33% in 1993-94 to 23.6% in 1998-99,

NABARD has substantially increased the funding made available under the Rural Infrastructure

Development Fund (RIDF) set up by it in 1995 (http:\\www.nabard.org/oper/oper.htm), nevertheless, it too

has continued in the same rut and in the case of western Madhya Pradesh it has funded the economically,

environmentally and socially unsuitable Man dam project in Manawar tehsil of Dhar district with a loan of

Rs 44 crores to GOMP in 1997. The project is ill-planned as it proposes unsuitable surface canal irrigation

in a command area dominated by hilly terrain and shallow soils which already falls in the command areas

of the Onkareshwar and Indira Sagar Projects and has considerable alternatively developed sources of

irrigation. It has also violated the conditions imposed on it at the time of getting environmental clearance in

44

1984 for environmental treatment and rehabilitation of the oustees who are mostly adivasis and so had been

blacklisted by the Ministry of Environment and Forests in 1995 (http:\\www.narmada.org/nvdp.dams/

man/man.index.html). Consequently NABARD has been at the receiving end of protests against the dam by

the Narmada Bachao Andolan for its folly in not scrutinising the false documents presented to it by the

GOMP at the time of sanctioning the loan.

Dams, which are the environmentally and socially most harmful component of the green

revolution package, have come in for serious criticism in recent years and dam construction has been totally

halted in the developed countries with some dams even having been broken to limit environmental damage.

The World Bank, which has been a major funder of dams worldwide, was forced to constitute a World

Commission on Dams to review their performance, which has submitted a comprehensive report (WCD,

2000). The report brings out the fact that the benefits in terms of irrigation and power gained from dam

construction have been at an unacceptable and unnecessary higher cost in terms of environmental

destruction and human displacement. There has been lack of equity in both the distribution of benefits and

costs with the poor having lost out on both counts. Considering the increasing importance of conservation

and harvesting of water resources the WCD has recommended that in future people’s participation in these

processes should be made mandatory so that more effective and less harmful solutions to the problems in

this sphere can be worked out.

Worldwide there is a burgeoning movement in ecological farming and local area watershed

development that has come up as a reaction to the deleterious effects of modern agriculture which has

theoretical underpinnings in the green ideology of development in harmony with nature. This movement

has thrown up viable solutions to the intransigent problems of unsustainable agricultural production and

inequity in the distribution of benefits and costs of water resource development (TWN, 1990). In the

western Madhya Pradesh region too, as we have seen, there have been successful localised experiments in

this sphere. The NGO Samaj Pragati Sahayog has in fact published a comprehensive critique of modern

agricultural development and the principles of neo-classical economics on which it is based and has

formulated a blueprint for the development of dryland agriculture through local area watershed

development involving the poor in project formulation and implementation (Shah et al, 1998). Such a

policy would also successfully address the persistent problem of rural unemployment and

underemployment and low rural incomes that has held back the Indian economy by depressing effective

demand and so is the need of the hour.

Thus the comprehensive decentralised solutions to the problems of underdevekopment and

poverty are there waiting to be adopted on a large scale. The World Bank has recognised this and

sanctioned a loan of US $ 110.1 million to the GOMP for the Madhya Pradesh District Poverty Initiatives

Programme in 2000 (http:\\www.wds.worldbank.org/servlet/wdsservlet?

pcont=details&eid=00009496_00102405574782). This project stresses the empowerment of women

through the formation of village groups of disadvantaged people and intends to increase income security by

carrying out development of micro-irrigation, rural infrastructure and micro-enterprises to be supported by

45

micro-finance through the involvement of NGOs. The GOMP had in fact embarked on such local area

development since the mid 1990s by pooling in and directing the resources being made available to it for

rural development under various central government schemes through the Rajeev Gandhi Missions for

watershed development and food security with varying amounts of success (TARU Leading Edge, 2001).

These investments in watershed development, however, are paltry in comparison to what is

required. For instance the actual expenditures by the GOMP through the Rajeev Gandhi Missions in 1999-

2000 were only Rs 177.3 crores (GOMP, 2001). The worthwhile NGO investments in this regard from

various other sources would not have been more than a few crores of rupees in the same period. This is

primarily because in government circles decentralised watershed management and organic farming are seen

as adjuncts to modern agriculture and not as central programmes that will replace it. Moreover, the state of

the finances of the GOMP have created a situation where it is not in a position to make any substantial

capital investments on its own. The statement of actual incomes and expenditures of the GOMP for 1999-

2000 show a revenue deficit of Rs 4610.11 crores after excluding the central government grant of Rs

1677.85 crores. This necessitated the incurring of a public debt of Rs 2912.77 crores resulting in the total

outstanding public debt mounting to a massive Rs 20, 498.86 crores which is estimated to go up to Rs

27,124 crores by March 2002. The interest payments on this debt amounted to Rs 2138.66 crores. The

capital expenditures were only 7.2 % of the total expenditure and were met mostly with central government

funds, the revenue earned by the GOMP being spent on maintaining its vast bureaucratic setup (GOMP,

2001). The GOMP is leading a hand to mouth existence at present on the strength of overdrafts from the

RBI which it somehow pays back within the fourteen day limit and then borrows again. Thus the GOMP

has neither the inclination nor the resources to promote watershed development on a large scale.

Considering that the World Bank itself sees decentralised natural resource management only as a

tool for the mitigation of the harmful effects of globalisation and participatory group formation as a means

of deflecting the discontent arising from this and given its near total hegemony over development thinking

it is not surprising that governments and institutions in the third world follow its lead in not questioning the

centrality of capitalist development (World Bank, 1996). Though capitalist development has become

universal today it has not been able to overcome two of its fundamental contradictions. The first

contradiction is the appropriation of the social product by private persons which by reducing the incomes of

the masses leads to contraction of effective demand and resultant periodic crises of market realisation of the

value of production manifested in recessionary slumps (Sweezy, 1970). Thus despite all that the WTO

could do, growth in world trade dropped from 13% in 2000 to only 1% in 2001 with the major economies

of USA and Japan recording negative rates (http:\\www.worldbank.org/prospects/gep2002/index.htm). The

other fundamental contradiction is that continuous growth, which is a sine qua non for capitalist

development, destroys the environment through pollution and over extraction of non-renewable resources

creating a crisis that threatens the creation of value itself (O’Connor, 1988).

The reaction of the hardliners among the developed nations to this new environmental crisis was

to blame it on the population explosion in the third world countries and suggest that the poor in these

46

countries living at subsistence levels degraded the environment as they did not have sufficient monetary

incomes and this degradation further increased their poverty thus creating a vicious circle and so strict laws

must be enforced to sequester environmental niches (Hardin, 1968). This thinking was reflected in India in

the enactment of the Wildlife (Protection) Act of 1972 which totally dispossesses the forestdwellers who

are mostly adivasis from the rights to the forests in which they have lived for centuries by the formation of

national parks and sanctuaries. As we have seen, the adivasis in western Madhya Pradesh have in fact faced

such a mindset right from the time of independence.

Since such a policy did not yield the desired results and instead increased social conflicts, the

rhetoric of participatory decentralised development for the marginalised poor within the overall framework

of extensive centralised capitalist development began to be peddled from the mid 1970s onwards. The

urgency for this increased after the oil-price shock of 1974 which aggravated the recessionary trends visible

in the developed economies since the late 1960s and brought on the first serious slump after the prolonged

boom of the post war years. Thus we have seen the twin thrusts consisting of the very real processes of

globalisation which began with the structural adjustment policies beginning in the mid 1970s and

culminated in the formation of the WTO in 1994 to increase the access of the MNCs to the markets of the

developing countries and the superficial policies of participation and empowerment of the poor in

peripheral development programmes for the management of the critical natural resources of land, water and

forests.

Invariably these two thrusts have come into conflict when poor people have taken the rhetoric of

participation and empowerment seriously and overstepping the Lakshman Rekha that has been prescribed

for them begun to challenge entrenched national and international power structures as we have seen in the

case of the mass organisations of western Madhya Pradesh. Thus if the exemplary work done by the NGO

Sampark in a few villages of Jhabua district with funds from foreign funding agencies has to be replicated

throughout western Madhya Pradesh then the revenue expenditures of the GOMP as also of the

Government of India on their vast and inefficient bureaucracies will have to be cut so as to provide the

funding needed for this. There is little possibility of this happening considering that the GOMP is

borrowing funds from various sources like the World Bank, the Asian Development Bank, Department for

International Development, DANIDA, NABARD (as many as 17 projects of the Narmada Valley

Development Authority have been funded to the tune of Rs 334.27 crores through the RIDF), and MNCs

to pursue the creation of infrastructure like roads, dams, power- plants, telecom networks, governance and

even school buildings. Thus there is no alternative for the JMM but to intensify public action to bring about

the fundamental changes in policy and power structures required for genuine rural development and

freedom of adivasis from the rule of sahukars in western Madhya Pradesh.

The public action undertaken so far by the JMM and historically by other mass movements has, as

described earlier, brought about the creation of a legal framework not only for the limited goal of control of

the sahukars but for the larger aim of establishing grassroots democracy in both the political and economic

spheres. Thus theoretically it is possible to proceed towards an “economy of permanence” (Kumarappa,

47

1945) which respects both nature and the human being, that can provide the adivasis of western Madhya

Pradesh with sustainable livelihood opportunities for wholesome living. However, what is being done in

reality by the GOI is that statistics are being fudged to show that the number of people living below the

poverty line have decreased (Mehta & Venkatraman, 2000) and so try and mask the fact that a decade of

economic liberalisation has had adverse effects on the livelihoods of the poor (Kabra, 2000). A heavy

publicity blitz is being carried out by the GOMP to trot out more false statistics that Madhya Pradesh has

achieved significant progress in human development indicators on the strength of a few successful village

experiments under the Rajeev Gandhi Missions while the reality is that overall the living conditions of the

poor in the state have deteriorated in the 1990s (Mahendra Dev, 2000).

The importance of organised public action in liberal democratic societies to bring about changes in

local power relations and also in state policies in favour of the poor and deprived sections has come to be

universally recognised (Dreze & Sen, Op. Cit.; Bauman & Sinha, 2001). Considering that no single

ideology, whether of the left or of the right, can provide all encompassing solutions to the problems of

underdevelopment and poverty that plague the world and that consequently all actually existing nation

states today function by mixing aspects of both kinds in their public practice, the need for greater public

action to introduce the comparatively more recent green ideology, which has shown that it has solutions to

both the problems of environmental destruction and human deprivation, into the practice of development

and governance assumes greater importance. One can only hope that the efforts of the JMM in this

direction will bear fruit in the future and more such movements will emerge nationwide despite the

repression that is inevitably unleashed on them, so as to make possible the emergence of a genuinely green

India.

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