LETTERS
Issn 0012-9976
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4 may 6, 2023
An Unscientific Exclusion
T he National Blood Transfusion Council
(NBTC) under the Ministry of Health
and Family Welfare governs the Indian
blood donation policy. The NBTC is the
apex body responsible for formulating
policies about collecting, storing, and
distributing blood and blood products in
India. The latest policy governing blood
transfusion is the “Guideline on Blood
Donor Selection and Blood Donor Referral,
2017,” which also determines the popu-
lation group eligible for donating blood,
as prescribed by the NBTC.
A member of the transgender commu-
nity has filed a public interest litigation
(PIL) challenging clauses 12 and 51 of the
prescribed guidelines. The said clauses
expressly prohibit transgender persons,
gay men, and female sex workers from
donating blood by classifying them as
a “high-risk” category for having HIV/
AIDS. In response, in its affidavit, the
union health ministry had submitted a
plethora of scientific evidence to justify
the need for a blanket exclusion. The
ministry proposes that the blood dona-
tion system being such an intrinsic part
of the Indian healthcare ecosystem, the
move was necessary to ensure people’s
faith in the integrity of the same. How-
ever, disqualifying an integral part of
the Indian population from donating
blood in the first place does not seem to
be a step in the right direction towards
achieving the goal of maintaining a safe
public health system.
The National AIDS Control Organisation
is responsible for releasing the annual
report on HIV estimates in India. Its latest
report detects a 46.3% decline in the
annual new infections at the national
level from 2010–21 and estimates the
number of people living with HIV at
around 2 million. This data clearly re-
flects the significant progress made in
India’s fight against HIV/AIDS. Now, to
evaluate the queer community’s pres-
ence in the “high-risk” category, com-
paring the LGBTQ+ statistics and the HIV
statistics, can bring clarity to the issue at
hand. The latest data on the queer com-
munity’s population in India estimates it
to be around 135 million, and comparing
it with the 2 million people living with HIV
clearly demonstrates the negligible pres-
ence of the community in the target group.
The NBTC has also prescribed that all
blood units collected from the blood do-
nors are to be tested for infectious dis-
eases before the transfusion. This hits a
nail in the coffin of the ministry’s argu-
ment that LGBTQ+ people and sex work-
ers may carry a relatively higher risk of
HIV/AIDS since the same get checked
before blood transfusion, nullifying the
risk prevalence. Hence, the blanket ex-
clusion from donating blood is an explic-
it violation of Article 14 of the Constitu-
tion, which specifies their right to equal-
ity and equal participation in essential
functions of social life. In response, the
ministry had submitted that owing to
the technological limitations of testing
in India, there is no alternative to their
outright exclusion to ensure the safety of
blood donation.
In the extension of Article 14, these
guidelines are also violative of Article
15, which prohibits discrimination on
the grounds of sex, and which also
includes a person’s gender identity and
sexual orientation in its purview. Addi-
tionally, blood donation being a signifi-
cant component of the overall health-
care system of the country, the exclusion
of a group of people from donating blood
also affects the right to life of the people
at large. Thus, it also violates Article 21
of the Constitution.
The Indian blood donation guidelines
can take some insights from the blood
donation rules of other countries, which
ensure inclusivity without compromis-
ing the safety standards. In the United
States, the Food and Drug Administra-
tion (FDA) in 2015 made transgender
people and gay men eligible for donating
blood, provided they adhere to the de-
ferral period of a year, during which
they should not have intercourse with
another man. In 2023, the FDA further
eliminated the time deferral restriction
of men having sex with men (MSM) and
women having sex with MSM. It made
the norms more queer-friendly by re-
quiring everyone who has had sex with
multiple partners to wait for three
months before donating blood.
vol lViii no 18 EPW Economic & Political Weekly

Similar is the gender-inclusive norms in
other countries. For instance, the United
Kingdom follows the FAIR approach to
donating blood, where FAIR means “for
the assessment of individualised risk.”
The aim here is to look out for an individu-
alised risk assessment approach for the se-
lection of blood donors without compro-
mising the safety of the process. Provided
adherence to the period of three months,
no one will be barred from donating
blood based on their sexual orientation.
Furthermore, countries like Israel and
France, which had previously banned the
queer community from donating blood,
have also removed this prohibition.
It is high time for the government to
take some lessons from the norms and
rules of other countries and lift the ban
on transgender people, gay men, and
female sex workers from donating blood.
An outright ban on a community from
being blood donors will do no good apart
from further stigmatising them.
According to data from the United
Nations Programme on HIV/AIDS, trans-
gender people who have experienced
stigma in healthcare based on their
sexual orientation are three times more
likely to avoid healthcare than those
who have not. To prevent this and fulfil
the aim of the fundamental rights out-
lined in the Constitution, removing the
ban and making transgender people, gay
men, and female sex workers as equally
eligible blood donors and valuable con-
tributors to society are of paramount
importance.
Shikhar Chauhan
Hyderabad
Voice of Subaltern
Historiography
T here was a time when we would just
define history as happenings in the
past and it got subsumed into our public
consciousness. The sources of historical
knowledge would simply be classified
into archival, documented, and some
other such historic–ethnographic prac-
tices. This brand of historiography was
mostly prominent in South Asia and was
prevalent in the West as well.
Born in West Bengal, Ranajit Guha
was faced with immediate political and
Economic & Political Weekly EPW may 6, 2023
historical events which needed reinter-
pretation and reimagining on the lines
of an axiomatic sense rather than through
the prism of imperial markers.
Guha was initially influenced by
Marxist historians in India, and attempt-
ed to engage with Antonio Gramsci and
Georg Hegel in building a historical con-
sciousness that represented the common
or “subaltern” masses. Later on, he would
delve into the study of “structures” based
on time-space and voices of the subal-
tern by infusing the methods derived from
Michel Foucault, Clifford Geertz, Claude
Lévi-Strauss, etc.
This new brand of history was termed
as “subaltern historiography.” The prev-
alent nationalist and elitist historiogra-
phy had divided historical subjects into
two different sets of ideas, with the sub-
altern having little agency in these ac-
counts. The time was to debunk and dis-
mantle such drawbacks calling for the
need of a “history from below.”
Guha gave emphasis on rejecting the
practice of atomising historical facts
while stressing on collective agency.
This insurgent consciousness was one
of the fascinating concepts that took a
departure from the regular code of his-
tory writing and stressed on the collec-
tive consciousness of historical subjects
like peasants.
Guha was a different kind of historian
whose work shaped the scholarship of so
many scholars from/of South Asia in
particular and the global South in gen-
eral. His original work, Elementary Aspects
of Peasant Insurgency in Colonial India
(1983), and his well-crafted historical
prose are still relevant and leaves one in
awe. His books like A Rule of Property for
Bengal: An Essay on the Idea of Permanent
Settlement (1963), Dominance without
Hegemony: History and Power in Colonial
India (1998), History at the Limit of World-
History (2002), among others are some
notable works which locate the multi-
farious and layered dimensions of his
historical writings and investigations.
EPW Engage
The following articles have been published in the past week in the EPW Engage section (www.epw.in/engage).
(1) Gendered Impact on Unemployment: A Case Study of India during COVID-19 — Ammu George,
Sumedha Gupta, Yuting Huang
(2) Challenging the Status Quo: IIMs and the NEP 2020 — Manish Thakur, R Rajesh Babu
vol lViii no 18
LETTERS
In later years, his attention turned
towards questions in historiography ask-
ing, in essence, what it might entail to
recover a past that was appropriated by
colonialism. History as a subject is being
weaponised across the world by appro-
priating and positioning it in line with
one’s political ideology. The onslaught of
deletions and insertions in history writ-
ing are being used to present alternate
historical facts by excluding the voice of
the subaltern from it. The current politi-
cal disorder and downgrading of demo-
cratic institutions make the project of
subaltern historiography, which was in-
augurated by Guha, even more relevant.
Mir Sajad
Srinagar
Errata
(1) In the article “Groundwater Irrigation and
Agricultural Output Nexus: An Analysis of
Indian Districts” (EPW, 1 April 2023), the ac-
knowledgements should have read as follows:
“The authors are thankful to an anonymous
referee for making very constructive comments
on the earlier version of the paper and the
Alagappa University, Karaikudi for providing
the financial support for completing this paper
from RUSA Phase 2.0 Scheme. However, the
views expressed in this paper are the authors’
own.” The authors’ bio should have read as
follows: “A Narayanamoorthy (narayana64@
gmail.com) is Senior Professor and Head.
K S Sujitha (sujithakiran861@gmail.com) is
Research Assistant, and G Karthiga Devi
(karthigagr1998@gmail.com) is a PhD scholar
with the Department of Economics and Rural
Development, Alagappa University, Karaikudi,
Tamil Nadu.”
(2) In the Editorial Comment titled “Techno-
cratic Subversion of MGNREGA” by Rajendra
Narayanan (EPW, 29 April 2023), “Aadhaar-
enabled payments systems (AePS)” on p 7
should have read as “Aadhaar-based payments
systems (ABPS).”
The errors have been corrected on the EPW website.
The errors are regretted —Ed.
Corrigendum
In the Letter titled “Amplifying Music with
Artificial Intelligence” (EPW, 29 April 2023),
the author credits should have been “Anuttama
Ghose, S M Aamir Ali.”
The error has been corrected on the EPW website.
5
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6 may 6, 2023 vol lViii no 18 EPW Economic & Political Weekly

COMMENT
Planned Incoherence
The so-called rationalisation is laying the foundation for a conceptually weak and burdensome curriculum.
Krishna Kumar writes:
R
ecent attempts to reduce the burden of the syllabus on
school students are likely to have the opposite effect,
that is, the sense of burden will intensify. This is because
crudely shortened school textbooks will be less comprehensible
than their original versions. The Yash Pal Committee (1993) was
appointed by the government to probe why children find school
life and learning so burdensome. The answer this committee gave
was that the sense of burden arises from incomprehensibility. A
radical change was needed, this committee said, in the manner in
which knowledge is perceived and presented to children. A change
in this direction was attempted under Yash Pal’s leadership in
2005. The National Curriculum Framework drafted that year
guided a massive process of change in syllabi and textbooks of
all subjects. The altered approach lasted for an appreciable length
of time: 17 years. Its time to fade away has arrived, and the union
government’s curricular policies are back to an old problem.
It has two dimensions—epistemic and political. The first re-
ceived a severe jolt during Covid-19. Interests vested in online edu-
cation fully availed the opportunity that the policy paralysis pro-
vided during the pandemic crisis. Prolonged school closures and
the decision to shift all teaching to the distance mode enabled the
Central Board of Secondary Education and National Council of
Educational Research and Training (NCERT) to opt for a sweeping
round of syllabus and textbook cuts. “Rationalisation” was the term
used to justify the shrinkage. Social science subjects were badly
affected. Despite criticism, the strategy to dilute examination
demands moved ahead. Even in this first round, the ideological
dimension was rather too apparent, but the recent alternations are
far more ambitious. They cover science as well as humanities. If
medieval history can be shortened, why not the lessons dealing
with basic concepts in geography? The strategy seems to be to cover
ideologically necessitated cuts with purer cuts. The scientific com-
munity has expressed its disapproval of the censoring of evolu-
tionism. But there are no matching voices to cry for the chopping of
Nirala and Muktibodh, inequality and protest movements.
We are back into a full-fledged textbook controversy. We can ex-
pect the same old pattern now: teachers will silently teach, coach-
ing children to negotiate conceptually injured lessons by cramming
exam-worthy information. Some private schools may opt to seek
affiliation with the board that takes the Indian Certificate of Sec-
ondary Education and uses textbooks produced by private publish-
ers. Among wealthier schools, the waitlist for entry into the Inter-
national Baccalaureate is already long. It will now get longer.
8 MAY 6, 2023
Schools linked to state boards can ignore the deletion spate, espe-
cially in opposition-governed states. That, however, may not suffice
to shield all of their students from the effects of a truncated sylla-
bus. Those applying for admission to central universities will have
to appear in the national admission test. Its items will, in all proba-
bility, reflect what remains of NCERT’s textbooks after their exten-
sive mutilation. Other centralised tests will bear similar, subtle con-
sequences of the deletion move. Its long-term effects may become
redundant for commentary because a new curricular framework
will soon pave the way for a brand new set of textbooks.
Once they arrive, researchers concerned about India’s education
will have the benefit of clarity. At present, they have no answer
for the question of why these textbooks were not touched much
earlier. The change of regime at the centre occurred in 2014,
and demands for change were quickly raised. No significant
changes in the overall structure or deletions occurred till the
pandemic provided an occasion. In fact, a committee that exam-
ined the history books and invited late historian Hari Vasude-
van (chief adviser for the social science syllabus) in 2016 found
nothing particularly problematic. The action taken now is on an
unprecedented scale. The flimsy scaffold of policy and a volumi-
nous draft of the new curriculum framework do not add up to
justify the so-called “rationalisation.” Perhaps it is an interim
action, to be completed next year. The new policy waxed eloquent
on critical thinking, and the deletions hit some of the sharpest
examples of critical enquiry. But terms like “critical thinking”
and “problem solving” have now mutated beyond recognition.
That is why the Social and Political Life series for Classes VI to
VIII has suffered so much surgery—not just in the main text, but
also in illustrations and instances provided to elucidate the text.
The new session has just begun, and the range of cuts, modifica-
tions, and strong-armed editing has not yet been fully assessed.
Teachers may not have the time and few have the liberty and incli-
nation to find out what all has been lost. As time passes, teachers
might get used to the new structure and substance of the curriculum
as represented by the truncated texts. Some of them will wonder
why evolution is no longer a part of either history or science. Per-
haps they will notice that references to caste and untouchability
have also disappeared. Some may stop to wonder how children will
make sense of geography with considerable details about land-
forms, climate, vegetation, wildlife, etc, removed from the book.
Krishna Kumar (anhsirk.kumar@gmail.com) is honorary professor of
education at Panjab University and a former director of NCERT, New Delhi.
vol lViii no 18 EPW Economic & Political Weekly
FROM THE EDITOR’S DESK
Making Classrooms Critical and Ethical
T
he textbook revisions that have been recently undertak-
en by the National Council of Educational Research and
Training (NCERT) have evoked mixed reactions among
educationists and commentators alike. For example, the edito-
rial comment by Krishna Kumar in the current issue of EPW has
raised many important issues that suggest an inadequacy of the
revisions in a vital sense. The comment rightly argues that the
claim to rationalise the syllabus and curriculum for reducing the
burden of the schoolchildren is only going to intensify another
kind of burden on them. Taking a cue from the editorial comment,
one could further argue that the deletion of certain topics from the
syllabi would make both students and teachers hamstrung. The
comment makes a reference to conceptual incomprehension as
being a cognitive burden; however, it is not the fault of these con-
cepts but of those who have made it their business to transact with
them. In other words, the knowledge in textbooks that is now
sought to be “rationalised” not only leads to a conceptual incom-
prehension but also creates a moral–social burden for those who
refuse to confront its source emanating from, say, their lack of
knowledge about caste, untouchability, and communalism.
It is an irony that the NCERT revisions would like to solve the
problem by removing such concepts and chapters that are perceived
to be burdensome on the students, intellectually as well as socially.
The collective consequence of such a conceptual incomprehension,
as has been pointed out in the comment, and the decision to drive
out some concepts and chapters from the classroom altogether,
tends to produce the same result in the name of rationalisation.
The deletion of certain topics pertaining to the freedom
struggle, social movements against caste and untouchability,
etc, would make it correspondingly non-compelling for the fram-
ers of the revisions of textbooks to take the concepts of justice
and equality on board for classroom discussions. Deletions would
make it unnecessary for the teachers to communicate these con-
cepts’ social significance through classroom discussions. Thus,
the deletion of such knowledge from the syllabi has far more seri-
ous consequences for not just the concepts and chapters being
deleted but, more importantly, for the project of shaping the
normative character of our society. The deletion of topics would
lead to the elimination of the discussion and/or persuasion
through deliberation of normative concepts such as justice,
equality, and secularism, which are all core constitutional values.
The acts of deletion render these concepts devoid of textual as well
Economic & Political Weekly EPW MAY 6, 2023 vol lViii no 18
as institutional context that are so necessary for making students
aware about the infirmities of society. It would effectively put to
rest such discussions where even confrontation with concepts
such as justice and equality would have positively inspired people,
both in the classroom as well as in the larger societal set-up.
Ironically, the curriculum content, which, on account of deletion,
is rendered dry, will provide a moral–ethical relief to those for
whom the inclusion of justice, equality, and secularism are unwel-
come ideas. Can we envisage a society without overcoming such
social infirmities which cannot even be subjected to classroom dis-
cussions? Without essential deliberation, how would these infirmi-
ties be eliminated in social relationships? It is in this sense that the
educational process has to acquire confidence to provide a deliber-
ative space so that a candid critique of social reality can be pro-
duced, which, to be sure, is conveyed through the concepts of
justice, equality, and secularism with a transcendental purpose.
One of the sources of critical thinking, arguably, is the study of
humanities and social sciences through which one could meaning-
fully transact with these concepts. Social theory, for example, would
help us discover the truth of caste embedded in the social reality and
humanities would enable us to seek to amplify it through its simpli-
fication in narratives that form the part of such activities comprising
music, painting, poetry, and autobiographies of the oppressed. Any
forward-looking revisions of the syllabi have to promote critical
thinking through their concepts, thus making the classroom into a
hospitable space where ethical narratives can be candidly produced.
The act of storytelling in the classroom that connects students’
experience with concepts becomes available only through the hu-
manities and the social sciences. Storytelling is fundamentally an
ethical practice. Its ethical appeal to justice and equality still has a
power to awaken a moral imagination and motivate people to look
at their society’s bad practices more critically, and ask how they can
make society more decent. The merit of revisions thus emerges
from the truth that is embodied in the discussion of inclusion and
not exclusion of the reality such as caste, untouchability, and com-
munalism. Following the thrust of the editorial comment, it can
be further argued that an attempt of so-called “rationalisation” of
the syllabi that is being justified in the name of fostering critical
thinking among the children, in fact, betrays the very claim of
any rationalisation or reasonability.
9
FROM THE EDITOR’S DESK
From 50 Years Ago policy planning was never explicitly felt. Nehru’s
towering personality and his keen interest in
foreign affairs made this largely a personal pre-
serve of the Prime Minister.
Vol VIII, No 18 MAY 5, 1973 If Nehru’s profound interest in foreign af-
fairs tended to give a personal content and
Foreign Policy: style to foreign policy making, the lack of a
Where Bureaucracy Thrives dominant political leadership in South Block
J A Naik since Nehru has tended to strengthen the hands
Foreign policy planning has remained by and of the bureaucracy of late and deprived India’s
large neglected in post-Independence India. Un- foreign policy management of imagination
der Nehru, the need to institutionalise foreign and initiative.
Economic & Political Weekly EPW MAY 6, 2023 vol lViii no 18
Foreign policy making suffers from want
of competence in both the Lok Sabha and the
External Affairs Ministry. Indeed, the Congress
Parliamentary Party is probably the weakest
link in the foreign policy formulation process. It
is difficult to find even one or two members in
the large Congress Parliamentary Party who
can speak with knowledgeability on foreign af-
fairs. In such a political milieu, the file-bound,
administration-running, and status-quo orient-
ed bureaucracy inevitably acquires the decisive
voice in policy making.
9
 MAY 6, 2023
Demography Is Not a Destiny
Changing population dynamics will throw up major challenges to the economy and society.
I
t is finally official: India is now the most populated nation in
the world, outpacing China, which held the number one posi-
tion for around two centuries. Last year, the United Nations
publication, World Population Prospects 2022, projected that
India’s population will surpass that of China in 2023. And earli-
er last month, the State of World Population report of the United
Nations Population Fund estimated India’s population to be
1.428 billion in 2023 as against 1.425 billion in China. The global
population is now 8.045 billion, of which 1.151 billion are in the
least developed countries, 6.769 million in the less developed
regions and 1.276 billion in the more developed regions.
That means global population grew almost eightfold over
the last two centuries. While it is estimated that it took almost
50,000 years for global population to touch 1 billion by around
1804, it then doubled to 2 billion by 1927, and further grew to
3 billion by 1960. Later, in another four decades, the global pop-
ulation again doubled to 6 billion in 2000. It then grew by an-
other 2 billion in a little more than two decades to touch 8 bil-
lion by 2023. It is now forecasted to reach 9 billion by the late
2030s. Estimates indicate that the global population will finally
peak at around 10.4 billion by the 2080s.
Even as early as the 18th century, the widely anticipated popu-
lation explosion had unleashed alarm. Economists like Thomas
Malthus warned that the exponential growth of the population
will far outstrip the linear growth of resources and cause famines
and poverty the world over. The scenario was particularly depress-
ing in the second half of the 20th century when large food short-
ages severely threatened the very survival of the fast-growing
populations in China and India, the two most populated nations.
However, while the predictions of a population explosion
proved to be chafing, the expected huge food shortages and the
fall in the living standards were not only averted but improved.
Thus, we find that despite dire predictions of the impact of the
population explosion, the global per capita incomes have more
than doubled since the second half of the 20th century. More-
over, life expectancy increased from 46 years to 73 years, which
is also very remarkable. Similarly, most countries achieved uni-
versal enrolment in primary education and improved overall
welfare during this period.
The important factors that facilitated these improvements in
income and life expectancy were the demographic transition
and the faster-than-expected growth in productivity. The birth
and death rates, which initially picked up sharply, soon slowed
Economic & Political Weekly EPW MAY 6, 2023 vol lViii no 18
down as the falling mortality rates, especially infant mortality,
had a lagged impact on fertility levels. In the last 70 years, global
fertility rates, or the number of children born per mother, have
halved to 2.3, which is only a few points over the replacement
level fertility rate of 2.1. Fertility rates in the more developed
countries have now gone down to 1.5, while the rates are 2.4 in
the less developed regions. However, fertility rates remain a
high 3.9 in the least developed regions. Overall global popula-
tion growth halved from 2% plus in the 1960s to below 1% now.
The accomplishments on the productivity front were also im-
pressive. Agriculture production has more than tripled since the
middle of the last century. This was facilitated by the new green
revolution technologies and the substantial expansion in the
use of natural resources, including land and water. Macro-
economic estimates show that total factor productivity gains ac-
count for more than half the growth of output in many major
advanced economies.
Though these historical accomplishments on the demographic
front brighten the prospects of tackling the new challenges in the
coming decades, there are no quick-fix solutions. The skewed fer-
tility levels will now ensure that the least developed countries will
double their populations at twice the pace of the less developed
regions. Thus, while population growth will remain a major issue
in the least developed regions, the challenge in the less developed
countries is about finding productive employment for the labour
force in the 15–64 age group, who constitute about two-thirds of
their population. In contrast, the challenge in the more developed
regions is to provide universal healthcare and old age pensions
for almost a fifth of their population, whose numbers are set to in-
crease sharply. Thus, generating employment for the productive
age group and ensuring the welfare of the ageing population are
the two main demographic challenges in the 21st century.
This scenario calls for multiple and differentiated approaches
to overcome these problems. A major implication of the growing
share of the ageing population is a slowdown in the growth of
income and savings. This will constrain growth rates, especially
in the more developed regions. Its consequence on government
finances will be severe given their huge debt burdens. The pos-
sibilities of accommodating the ballooning workforce in pro-
ductive employment in the less developed countries are even
more challenging. The emergence and evolution of new tech-
nologies like three-dimensional printing and the automation
and digitalisation of production, including the internet of things
7
COMMENT

and artificial intelligence, would severely constrain the employ-
ment potential of the global economy.
Though the historical experiences imply that the demo-
graphic challenges are not insurmountable, there are no im-
mediate solutions. However, one thing that is clear is that a
business-as-usual approach can be very catastrophic. Apart
from technological solutions, there is also an urgent need for
institutional and financial innovations to help smoothen the
demographic transition and to ensure a more equitable and
inclusive growth so that no nation is left behind.

8 MAY 6, 2023 vol lViii no 18 EPW Economic & Political Weekly

ALTERNATIVE STANDPOINT
Caste, Consumption, and
Dalit Resistance
Abdullah Al Mozahid
The politics of caste has
encompassed every aspect of
Indian social and cultural lives,
including quotidian food
preparation and consumption
practices. Because of their socially
inferior caste identities, Dalits are
mistreated in (and excluded from)
Indian dominant dining spaces,
and their food preparation and
eating habits are stigmatised by
upper-caste groups.
Abdullah Al Mozahid (mozahid.hstu@gmail.com)
is pursuing a master’s degree in sociology at
the South Asian University, New Delhi.
10
R
ajyashri Goody is a renowned
artist on the politics of food and
caste. Her artworks on Dalit food
preparation and eating practices enable
us to rethink the repercussion of caste
doctrines in the lives of Dalit people and
the everyday forms of resistance enacted
by Dalit food practices. Dalits are mar-
ginalised communities in India whose
social status are at the lower rung of the
caste hierarchy. Goody’s artwork called
“Writing Recipes” is a collection of poems/
recipes she retrieved from first-person
narratives and Dalit memories that unpack
the ground reality of the Dalit world.
The caste-based food politics in Indian
everyday dining spaces and Dalit resis-
tance to “food stratification” (Goody 2014:
ix) are explored in this article. How people
from lower caste or Dalit backgrounds
manage to interact with and are treated by
others within caste-based stratified food-
ways and what methods they embrace to
counteract the politics of food and caste
are discussed in this article. To do so,
the readers’ attention is invited as to
why Dalits often have to hide their caste
identity and how hiding one’s identity
can also be a form of Dalit resistance.
The Social Cost of (Caste) Identity
Identity, in its distinct character, is not
autonomous but instead is given from
the outside. It does not always bring
pride or privilege to all; instead, it con-
fers stigma and indignity to some people’s
fate (Mahanand 2021). The discourses of
intersectionality and the debates sur-
rounding the concealment of caste iden-
tity across Indian social settings (and
particularly the dining space) depict how
certain signposts, such as religious affili-
ations and flags of upper castes and lower
castes, the sacred and the polluted, play a
critical role in ordering, modelling, and
strengthening people’s social identity
may 6, 2023
and weighing the level of interaction
between people. The flame of caste
embraces every aspect of Indian social
life. Individuals’ social recognition, power,
and privilege revolve around their caste
identity. However, when caste dictates
one’s food practice (Staples 2014: 65),
that is, who will cater for whom, who
will allow sitting with whom in the dining
space, whose cooked food is pure, and
whose cooked food is polluted, hence,
abandoned, as social anthropologists,
we cannot and should not shake off our
hands in studying foodways merely
from the perspective of symbolic inter-
actions of caste-based practice. Instead,
we should look for critical reasoning
in studying everyday foodways and the
relationality of caste from historical
(Goody 2022) as well as materialist
grounds (Harris 1986).
Given that India’s everyday food con-
sumption practices are governed by caste
(Staples 2014: 65), showcasing caste
identities may be the pride for some
groups, while it may appear as a
“stigma” or existential crisis for others
(Mahanand 2021: 28). For instance, the
exclusive possession and preservation of
their own cuisine and cooking and con-
sumption norms and practices may be
considered as the pride of purity, sacred-
ness, and elitism to the upper-caste groups,
while they consider eating meat or gather-
ing leftovers as acts of impurity by lower-
caste groups or those who are labelled as
untouchables (Goody 2014: viii; Staples
2014: 65). Hence, food preparation and
distribution have also been stratified on
caste lines in India (Goody 2014: ix). The
doctrines of caste-based food politics
equally embrace the domestic and public
spaces: the controversy of juxtaposing
vegetarian and non-vegetarian eaters in
the same dining space, the hatred towards
beef and pork eaters, carrion meat eaters,
or garbage scavengers are evident across
Indian foodways (Goody 2022). If one’s
caste and ethnic identity appears as an
existential crisis rather than a matter of
pride in dining spaces and consumption
practices (Kikon 2021), then it is better
(and more convenient) to hide one’s
“repellent” caste identity. If hiding caste
vol lViII no 18 EPW Economic & Political Weekly

identity eschews the potential harassment
and brings some respect, why should one
carry the curse of caste? Instead, one
may accord with Goody (2022) when she
says, “Why do you have to tell the truth?
Lying might get you wonderful food and
respect.” If telling the truth brings scorn
and dishonour to a Dalit because of their
(so-called) inferior caste identity, hiding
caste identity might be performed as a
form of resistance.
Dalit Resistance/Recipes
The Indian caste system is notorious
for discrimination towards Dalits—an
“oppressed subaltern class” (RifatRah-
man et al 2021: 1; Zene 2011) working as
sanitation workers, scavengers, garbage
collectors, disposers of dead cattle, and
landless agrarian workers. Because of their
socially and historically underprivileged
positions, they live in extreme poverty and
hunger (Kikon 2022). In an interview
with Jaydeep Sarangi, Nakul Mallik—a
Bengali Dalit activist and writer—
remembered how Dalits were treated as
“Depressed classes, sometimes Oppressed
classes, or sometimes Downtrodden
people” in British India and present-day
India as well, Dalits were labelled as
“Backward classes ... whom Gandhiji has
called ‘harijan’” (Sarangi 2018: 6). They
are stigmatised for eating leftovers, beef,
and carrion meat and are regarded as
“untouchable” and “polluted” by the
upper-caste groups for their “polluting”
jobs (Nair 2016: 14). Dalits are infa-
mously mistreated and are deprived of
minimum self-respect in all spheres of
social life. Mallik, narrating his child-
hood memories with Sarangi, mentioned
how he had to make a distance between
himself and others while interacting
with his peers and Brahmin classmates:
I had to be very alert all the time since there
were several barriers that untouchables
were obligated to respect. I was not allowed
to set foot anywhere near the kitchen or the
temple. When everyone else was busy wor-
shipping amidst the sound of the conch and
the bells, I stood alone at a distance. I
accepted the prasad with both hands out-
stretched, trying my best to maintain that
distance. (Sarangi 2018: 2)
Gopal Guru (2000), in his paper titled
“Dalits from Margin to Margin,” noted
how Indian Dalits have been afflicted by
Economic & Political Weekly EPW may 6, 2023
“different kinds of marginalization,” and
among them, the most important one is,
as Guru (2000: 111) identified, “political
marginalization.” It is evidenced that Dalit
students are mistreated and mentally and
physically abused in educational institu-
tions (Chauhan 2022; Thirumal 2018;
Hossain 2016), and are deprived of quality
education (Guru 2000: 114). Dalit women
workers are often refused work as cooks
due to their caste location (Guru 2022: 7).
The Bollywood film Ajeeb Daastaans
(2021) beautifully documented caste-
based discrimination in the workplace
depicting how the main protagonist named
Bharti, in spite of her competence, was not
employed in the position she deserves,
which is later filled in by Priya, another
newly appointed worker belonging to a
Brahmin caste. Dalits are excluded from
the opportunity of getting respectable jobs
as well (Guru 2000: 113). In his ethno-
graphic account, Renny Thomas (2005:
10) documented the “underrepresentation
of Dalits and Other Backward Classes
(OBCs) in elite scientific research institutes”
and detailed how scientific research has
been monopolised and Sanskritised exclu-
sively for the upper-caste scientists. Dalits
are often not allowed to enter the restau-
rant and sit at the dining table, and they
were served food outside the dining
space or on the footpath, and they had to
to carry their own mug to drink water in
some spaces.1 In everyday food practices,
people from the upper castes maintain a
physical and social distance from them.
Dalits and OBCs experience such harsh
and dehumanised treatment from upper-
caste groups only because of their inferior
caste identity.
Moreover, caste identity empowers
upper-caste groups to perpetuate and
strengthen their superiority and domi-
nance over lower-caste groups and
deprives the latter of the opportunities to
change their living conditions, resulting in
the fate of destitute Dalits remaining
unchanged for decades. Caste identity
also assigns all the “polluting” jobs such
as scavengers, garbage collectors, and
disposers of dead cattle for generations.
Hence, what Dalits eat, according to Nair
(2016), is “marked by caste, poverty, and
memories of hunger.” Nair (2016: 14)
contends that since Dalits “subsisted on
vol lViII no 18
ALTERNATIVE STANDPOINT
the bare minimum, the meat from the
carrion was often welcomed, and the
protein was a necessity for ... [them
because their] work involved hard labour.”
We cannot understand the consumption
patterns of Dalits and their annoyance
towards caste doctrines without analys-
ing the practical reasons for what Dalits
and why they eat certain food (Harris
1986). Or, as Goody (2014: viii) writes:
One had to take into account the historical
background—in particular, the growth of
an “upper” group that possessed its own
cuisine, its own high status cooking, such as
existed in both the East and the West of
the Eurasian continent, qualifying many
views of the superiority and uniqueness of
European culture.
The impoverishment that embraces
Dalit life deters them from accessing
“rich” Brahminical food on their menu.
Moreover, their hard work pushes them
to not eat such food that, ironically, they
cannot afford to purchase from sacred
cattle like milk, ghee, etc. However, the
dead cattle they dispose of are an abun-
dant source of rich protein and nutrition.
If “eating animals,” as Harris (1986) evi-
denced, “bestows health and well-being
greater than mere survival”, then why
should Dalits not eat carrion beef, pork,
or dead animal meat as the cheapest
protein source?
Practically speaking, “good to eat” is
much more meaningful and important for
Dalits’ survival rather than paying atten-
tion to Claude Levi-Strauss’s meaningless
concern of “good to think” (Harris 1986).
Because practicality always precedes the
symbolic meaning (Harris 1986).
Hiding Caste Identity as Resistance
Central to this article are Goody’s (2022)
couple of poems titled “What Is Your
Caste?” and “Pork.” Goody is the master of
depicting everyday and historic instances
of Dalit resistance in her artworks. Goody’s
artworks on Dalits are extracted from
first-person narratives aiming to give a
voice to socially isolated groups against
caste-based discrimination in Indian din-
ing spaces. As Manoranjan Byapari notes,
“Dalit literature ... as a vehicle and reposi-
tory of underprivileged angst” showcase
an “awareness of movements for social
justice” (Byapari and Mukherjee 2007).
11
ALTERNATIVE STANDPOINT
So, Dalit memories and autobiographies
are not merely writings. These are Dalit
responses and/or resistance, and the slo-
gans of Dalit movements against the
unjust treatment towards them. There-
fore, these two poems convey a strong
message of Dalit resistance to caste-
based food politics. As human beings,
every single individual wishes to live
their life with honour and self-respect,
regardless of the identity they display.
However, the artificial imposition of
caste identity has deprived Dalits of
their right to live in self-respect. The
structural violence of the caste system
has “subjected them to deep humilia-
tion” (Nair 2016: 14; Rifat-Ur-Rahman et
al 2021; Daize 2018). A documentary
film titled Caste on the Menu Card explic-
itly demonstrates how caste plays a criti-
cal role in making food “a site of exclu-
sion” and how the elite designs of caste
doctrines favour the upper castes. In
that film, a Dalit resident’s testimony
clarifies how Dalits are treated in the
caste-based foodways.
Some people (lower caste), who eat dead
animals, are considered inferior, and then,
there are people, who eat other meat, yet
they refuse to admit that such people are
considered superior (the upper-caste) in
Mumbai. Everyone eats meat, but no one
admits it.
The film also documents how Indian
Brahmin professors eat beef in Europe
and America but look down upon Dalit
communities eating similar meat in
India. Referring to Girin Phukon’s (2010)
example, Dolly Kikon (2013) writes of
how “the Tai-Ahom rulers ... continued
to eat beef, pork, and buffaloes during
feasts and social functions,” yet they got
great honour from the masses. But when
a Dalit eats beef, they are stigmatised
and labelled as “polluted.”
So, should Dalits make their caste
identity public to save themselves of this
stigma? Given prevailing circumstances,
it might seem that they should not disclose
their caste identity publicly, because the
truth may not always be welcomed or
appreciated. Instead, hiding the caste
identity can also be performed as a form
of resistance. Sultana and Subedi (2015),
in their study “Caste System and Resist-
ance,” pictured how Brahmin priests
12
refused to allow Dalits to enter the temple
and how Dalits resisted the “imposed”
label of untouchability. The testimony of
a Dalit activist, “We are only allowed
into the temples when we are not recog-
nised,” unfolds this spirit of resistance
(Sultana and Subedi 2015: 27). Therefore,
it is evident that if a Dalit woman dis-
closes their caste identity, they might
not be allowed work as domestic workers
in elite households. If a Dalit cook reveals
their caste identity, upper-caste consum-
ers might not eat their cooked food, as
Paromita Vohra and T Jayashree’s directed
documentary film Annapurna (1995)
attests. At one point in the film Ajeeb
Daastaans (2021), when Bharti is invited
to participate in a party in Priya’s hus-
band’s house, Priya urges Bharti to hide
her caste identity and introduces her as
a Brahmin lady. Hence, if displaying one’s
caste identity brings discrimination and
biased judgment, why should Dalits tell
the truth? If Brahmins can eat beef sitting
in Europe and America, if upper-caste
people hide their caste identity to have
beef and pork without hesitation, and if
some upper castes eat pork and feel no
guilt, then why should Dalits feel guilty
when they consume carrion or beef or pork
as food? If their (imposed) caste identity
brings discrimination and humiliation,
then hiding one’s caste identity—as
resistance—may bring some respect.
Conclusions
To conclude, this article contends that if
“breaking food taboos is always scan-
dalous when a group’s identity is centred
on it” (Kikon 2013), then it is better in
some circumstances not to disclose one’s
troublemaking caste identity. Goody urges
Dalits not to get hurt or ashamed if others
scorn them for eating pork; instead, she
asks Dalits to remember those upper
castes who eat pork with them in a clan-
destine manner in the darkness of the
night and/or before giving them a loan
(Goody 2022).
Note
1 Star Multimedia, “Harizan sisura boste pare na
hotele, khete hoy mejhete bose!” (Harijan
children cannot sit in the hotel, have to eat sitting
on the floor!), 24 November 2022, Daily Star,
https://bangla.thedailystar.net/star-multimedia/
news-420621.
may 6, 2023
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vol lViII no 18 EPW Economic & Political Weekly

Karnataka in Election Mode
V K Natraj, G S Ganesh Prasad
Karnataka is the only state in
South India where the Bharatiya
Janata Party is in power. It is
now battling anti-incumbency
and the after-effects of its
recent interventions with
regard to reservations. It has
moved the Muslims into the
economically weaker sections
and has recommended
internal reservations among
the Scheduled Castes. These
strategies might add to confusion
among the electorate.
V K Natraj (profvk@gmail.com) is former
director at the Madras Institute of
Development Studies, Chennai. G S Ganesh
Prasad (gsganeshprasad@gmail.com) is
with the Abdul Nazir Sab State Institute of
Rural Development and Panchayat Raj, Mysuru.
Economic & Political Weekly EPW MAY 6, 2023
K
arnataka is in an election drive.
Apart from the stakes for the
presently ruling Bharatiya Janata
Party (BJP), there are other variables which
add to this poll’s importance. Karnataka
is the only state south of the Vindhyas
where the BJP is in power and, in a sense,
this election is seen as a pointer, not per-
haps a very strong one, to the likely trajec-
tory of the general elections due in 2024.
Quite predictably, the present government
has to battle the anti-incumbency factor,
but its problems are accentuated by an
inept handling of issues relating to the
hijab and the controversy over school text-
books (both are discussed in some detail
in an article titled “W(h)ither Karnataka?”
EPW, 6 August 2022). Further, woes have
resulted from reports of gross corrup-
tion in the award of government con-
tracts and the settlement of bills to con-
tractors. This is by no means new or re-
stricted to Karnataka but the disclosures
were quite electrifying. That the BJP lead-
ership regards the Karnataka elections as
being more than usually important is
easily deduced from the visits made by the
Prime Minister to the state and the hectic
inauguration of various schemes/facili-
ties, some of which are yet to be com-
pleted. Another sphere where the state
is active is with respect to reservations.
Tinkering with reservations is all too
common in most parts of the country but
Karnataka ranks somewhat higher than
many by virtue of its almost obsessive
appointment of committees and commis-
sions. The state has a permanent Back-
ward Classes Commission which has been
in existence since 1997. The government
conducted a socio-economic census which
was commissioned when the present
Congress leader of the opposition was
the chief minister in 2015. This, it was
expected, would provide reliable data with
respect to population figures of different
castes. To this day, the findings have not
been made public. The most likely cause
is that the figures relating to the popula-
tion of several castes, especially the
vol lViii no 18
COMMENTARY
dominant Lingayat and Vokkaliga castes,
do not reflect what have been touted as
their accurate population estimates. Ru-
mour has it that this has caused the report
to be kept under wraps. Yet political par-
ties as well as courts keep insisting on
reliable data being produced with re-
spect to population figures by caste. The
courts in particular continue to display
an innocent faith in the magical ability of
surveys to produce data which represent
“true social reality.” This is not the place
to dwell on how exaggerated this faith
is, but this is not meant as a dismissal of
the importance of caste in our society
and economy.
Complicating Reservations
A major development in the reservation
sphere took place in 2018 when there was
an attempt by interested parties to en-
courage a split in the Lingayat caste into
two groups, Veerashaivas and Lingay-
ats. Quite a few prominent figures took
positions on this issue with the follow-
ing perspectives being prominent.
First, Lingayats and Veerashaivas are
the same, and are part of the Hindu fold.
An important advocate of this view was
a scholar of distinction who was also a
great fighter for Kannada and its primacy.
Second, these two groups are the
same but should be recognised as a sepa-
rate religion. The Veerashaiva Mahasabha,
along with some well-known political
leaders, advance this view.
Third, there is a very vocal group
which argues that the two are different,
that the Lingayats predate the Veerashai-
vas and that Lingayats are not Hindus.
These differences make the controversy
analytically challenging but they can
also have effects on the state’s political
map and alliances and so forth.
However, even though the attempt to
catapult this into a major debate succeed-
ed for a while, it did not pay any long-
standing dividends to interested parties.
Possibly, the leaders in all the groups re-
alised the advantage of having large
numbers on their side. Incidentally, the
demand that the Lingayats are a separate
religion distinct from the Hindus and
should be recognised as such is long-stand-
ing, although it has not been accepted by
any government in Karnataka.
17
COMMENTARY
Related recent developments with re-
spect to reservations revolve around the
following issues. The state government
appointed a commission headed by a re-
tired high court judge to look into the
existing reservation for Scheduled Castes
(SCs) and Scheduled Tribes (STs). The com-
mission in its 2020 report recommended
an increased reservation for SCs from 15%
to 17% and that of STs from 3% to 7%. The
government has accepted the recommen-
dations of the commission. In passing, it
should be mentioned that the head of this
particular committee has displayed a high
degree of sensitivity in speaking about res-
ervations for SCs and STs and has done so
with a measured tone which invites respect.
There has also been a demand for
some time from a section of the Lingayat
caste called the Panchamasalis for a sep-
arate reservation quota for them. Some
heads of the mathas (monastic orders) of
the caste also applied severe pressure on
the state government. And predictably,
this was matched by the other dominant
caste, namely the Vokkaligas, who also
sought an increase in their share of the
reservation kitty. On occasion, such de-
mands, especially from the Lingayat
group, were quite vehement. The issue
was referred to the state’s permanent
Backward Classes Commission, known
as the Karnataka State Commission for
Backward Classes, which submitted an
interim report to the state government
recommending creating new categories,
namely 2C and 2D, for Vokkaligas and
Lingayats, respectively. The former cate-
gory was given 6% and the latter 7% res-
ervation, respectively. The earlier cate-
gories of 3A (4%) and 3B (5%) were
scrapped along with the 4% reservation
for Muslims. The 4% quota was distributed
equally among the newly created 2C and
2D categories, thus taking the reserva-
tion in these categories to 6% and 7%,
respectively. The Karnataka cabinet has
accepted the recommendations.
In the process, the reservation enjoyed
for decades by the Muslims was undone
by a single stroke. Muslims are now to
access reservation under the economi-
cally weaker sections (EWS), a category
which was brought into existence by virtue
of the 105th Constitutional Amendment,
which has been implemented by the
18
state only now. Hereafter, Muslims will
have to compete with several other cat-
egories, including the Brahmins and other
educationally advanced classes, for reser-
vation in Karnataka. Above all, the remov-
al of Muslims from their earlier status of a
backward group and the “gifting” of
their share of the reservation pool to the
Lingayats and the Vokkaligas conveys a
clear message, namely that of polaris-
ing the society along the Hindu–Muslim
axis. Attention may be drawn to another
interesting fact here. The L G Havanur
Commission appointed in 1975, which
produced arguably one of the best re-
ports on the question of protective dis-
crimination for backward classes, stat-
ed openly that Muslims could be given
reservation only as a religious minority.
This was of course not followed in the
government order issued while imple-
menting some of the Havanur Commis-
sion recommendations, but strangely,
no one has mentioned this factor in the
discussions on the current controversy.
Reservations and Their Impact
It is necessary to look into the possible
effects of these measures on reserva-
tions in the political field. The steps tak-
en so far may lead to demands for simi-
lar initiatives for political reservations in
rural and urban local bodies. It should
be noted that the legislation relating to
MAY 6, 2023
panchayati raj institutions stipulates an
upper limit of 50% for reserved seats
that are for SCs, STs, and the Other Back-
ward Classes (OBCs).
The state cabinet has taken a major
decision to provide internal reservations
among SCs and STs. A point to be noted
here is that the government constituted
a commission under the chairpersonship
of Justice Sadashiva in 2005, to look into
issues related to internal reservations
among the SCs and STs. A digression into
the backdrop of this commission is re-
quired in order to appreciate this prob-
lem in a nuanced way. The division of
the SCs into the right and left groups has
always been a contentious issue in the
state. This has become sharper in the past
few decades, possibly due to increasing
awareness among the left category due
again to their progress, albeit modest, in
relation to education. The situation is
further complicated by the presence of
at least four “touchable” castes among
the SCs. They are the Bhovi, Banjara/
Lamani, Koracha, and Korama castes.
These along with the “right” SCs are
thought to be enjoying the lion’s share of
the benefits of reservation available to
the SC category as a whole. And this has
led to a demand for “internal” reserva-
tion among the SCs. The Sadashiva Com-
mission gave its report in 2012 on which
the state government is yet to act. In a
vol lViii no 18 EPW Economic & Political Weekly

cabinet meeting, the state has recom-
mended 6% internal quota for SCs (left),
5.5% for SC (right), 4.5% for touchables
(Banjara, Bhovi, Korcha, Korama, etc)
and 1% for others. These recommenda-
tions will be sent to the union government
for approval. Matters are complicated
even more by the fact that the reserva-
tions for these groups—Lamani, Bovi,
Korama, and Korcha—were challenged in
the Supreme Court in May 2019 and the
Court had directed the National Com-
mission for Scheduled Castes to take a
decision to drop them from the SC reser-
vation list. The commission directed the
chief secretary of Karnataka to send the
final recommendations on dropping the
above castes from the list of SCs.
The other groups in this category have
been arguing that the present decision
of the government to include the four
touchable castes in the reservation list is
violative of the directions given by the
Supreme Court and the National Com-
mission for Scheduled Castes. There is
also an argument that this step of the
government is nothing more than an
eyewash since it cannot be implemented
without the approval of the union gov-
ernment. Already some groups, though
relatively smaller in numbers, within
the SCs and STs have started opposing
the new policy of internal reservations.
Similar views have been expressed by
the dominant caste groups who have
been provided reservation under the
two new categories of 2C and 2D, oppos-
ing the government’s move leading to
protests in various districts in the state.
These groups are demanding a higher
percentage of reservation for the group.
Perhaps the most vehement opposition
to the internal reservations has come
from the Lamani/Banjara community.
They are a touchable caste under the SC
category and apprehend that in time
they may be eased out of the category. In
several parts of the state, the protests
have taken a slightly violent turn.
From such recent occurrences, it
seems that the present BJP government
may have bitten off more than it can
chew when it comes to tinkering with
reservations. The chief minister is trying
to reassure the touchable SCs like the
Lamani/Banjara group, that their place
Economic & Political Weekly EPW MAY 6, 2023
in the category will not be disturbed, but
it is difficult to say how much weight this
will carry with them as also with the
other touchable groups in the list. There
is some speculation that this group
which voted for the BJP last time may al-
ter its preference this time around.
The exclusion of the Muslims from the
ambit of a separate quota and placing
them among the EWS will not help the
BJP, but then the Muslims were never in
support of the party. Therefore, the par-
ty is unlikely to suffer any serious dam-
age or even a jolt due to this. At worst,
some sections of the sensitive voting
population may disagree with this poli-
cy but it is difficult to see this making a
visible difference at the polls.
As for the increase in the quantum of
reservation for the Lingayats and Vokkali-
gas, this too may not make for any signifi-
cant impact. One reason is that, by and
large, the Lingayats are with the BJP. This
change is unlikely to make a noticeable
difference in terms of their votes. The
Vokkaligas are generally thought to be
followers of the Janata Dal (Secular) and
here too the impact is likely to be marginal.
Conclusions
The generous flow of reservation-related
benefits should be seen against the dwin-
dling employment scenario in the state.
As has been pointed out in several reports,
vol lViii no 18
COMMENTARY
the fight for spoils of the reservation is
over 2%–3% of all jobs. Yet, there are
strident demands from virtually every
section of society for inclusion in the list of
its beneficiaries. And the government has
duly obliged by granting some groups’
requests, at least partially. An interest-
ing development is that some pontiffs of
the Vokkaliga mathas have expressed
unhappiness that their increased share
in the reservation pool has come as a re-
sult of the removal of Muslims from the
list of beneficiaries. While too much
should not be read into this, it is a signif-
icant development nonetheless.
A major inference from this situation
is that the demands for a larger share in
the reservation pie indicates the success
that protective discrimination has
achieved. It is indicative of the relative
empowerment of very backward groups
that they are raising their voice seeking
larger shares. This is certainly true of
the highly backward sections but cannot
apply to categories such as the Brahmins
and, to a large extent, the dominant
castes. The SC category needs to tread
carefully so that in the quest for a more
just division of the benefits within itself,
the unity of the group as a whole is not
lost sight of.
Regardless of the outcome of the elec-
tion in Karnataka, it is quite likely to wit-
ness more churning in the reservation pot.
19
COMMENTARY
Ladakhi Politics since the
Formation of Union Territory
Rekha Chowdhary
In just three and a half years
after the formation of the union
territory, the political class of
Ladakh has given a new direction
to its identity politics. From being
fragmented on subregional and
sectarian lines, it has become
inclusive and seeks to represent
the whole of Ladakh. The framing
of demands has also taken a
pronounced federal turn.
Rekha Chowdhary (rekchowdhary@gmail.com)
is a fellow at the Indian Institute of Advanced
Study, Shimla.
Economic & Political Weekly EPW MAY 6, 2023
I
n February 2023, two Ladakh-based
bodies—Leh’s Apex Body of People’s
Movement for Sixth Schedule (LAB)
and Kargil Democratic Alliance (KDA)—
held protest demonstrations in Jantar
Mantar at Delhi in support of their dem-
ands, including those related to full
statehood for Ladakh, constitutional safe-
guard under the Sixth Schedule, increase
in the number of members of Parliament
(MPs) from Ladakh, etc. For a region
where much celebration took place after
the bifurcation of the state of Jammu
and Kashmir (J&K) and grant of union
territory status, such protest in Delhi
seems to be puzzling. What is specifical-
ly perplexing is the response of Leh’s
leadership. The political class here was
single-mindedly focused on the demand
for union territory status for a number of
decades. Even when there was opposi-
tion to this demand in Kargil, Leh per-
sisted with the demand. Now that this de-
mand has been met and Ladakh has
been reorganised as a union territory, dis-
content continues to be manifested not
only in Kargil but also in Leh. Interest-
ingly, overcoming their differences, po-
litical leadership both in Leh and Kargil
have come together to launch a common
struggle. Unprecedented development as
this is, it reflects a substantial change in
the response of the political class in
Ladakh. In fact, since the formation of
the union territory, one finds substantial
changes in the direction of Ladakhi poli-
tics and strategy. These changes can be
summarised in the following way.
One, there is a drastic change in the
very nature of Ladakhi identity politics.
This identity politics till 2019 was exclu-
sive and fragmented on subregional and
sectarian lines. The political demands of
the two districts of Ladakh were quite
divergent and reflected binary nature of
Leh-based Buddhist and Kargil-based
vol lViii no 18
Muslim identity politics. Now the Ladakhi
identity politics has become inclusive
and represents, for the first time, whole
of Ladakh. In terms of Ladakhi aspirations
and demands, a consensus has emerged
for the first time.
Second, the resolution of Ladakhi sense
of marginalisation, for the first time, is
being perceived in terms of empower-
ment of Ladakh within a federal frame-
work. The union territory demand that
was articulated till 2019 was much more
centralised—its logic being defined by
the desire of separation from Kashmir
rather than empowerment of Ladakh.
Third, the politics of Ladakh has bec-
ome much more meaningful with the
issues located in its specific situation
and questions related to ecology, herit-
age, culture and local needs.
In order to understand these recent
developments in Ladakh, it may be per-
tinent to explore the identity politics of
Ladakh and the demand for union territo-
ry that formed its central plank before
August 2019 and to elaborate and analyse
the change that took place in this identi-
ty politics in the post-2019 period after it
was granted the union territory status.
Ladakhi Identity Politics
before 2019
As stated above, the Ladakhi identity
politics till 2019 was internally fragmen-
ted on religious cum subregional basis.
The religious divide that existed bet-
ween Buddhists (forming 39.65% of
Ladakh’s population) and Muslims (for-
ming 48.40%) overlapped with Leh–
Kargil divide. With Leh being predomi-
nantly Buddhist district and Kargil be-
ing predominantly Muslim, the Ladakhi
identity politics, in fact, has been frag-
mented between the Leh-based Buddhist
Ladakhi identity politics and the Kargil-
based Muslim identity politics. As these
two strands of identity politics were tak-
ing divergent directions, Ladakh was of-
ten facing sectarian tensions.
The demand for union territory for
Ladakh, though clearly articulated in Leh
during the late 1980s, reflected a conti-
nuity of Buddhist politics since 1947.
This politics was mainly defined by a
13
COMMENTARY
sense of antagonism towards Kashmir.1
Right from the time of accession of the
state with India, the Buddhist leadership
of Leh had been demanding separation
from J&K state—mainly from Kashmir.
The Young Men’s Buddhist Association
(YMBA), the major Buddhist organisation
of Ladakh, had raised the demand im-
mediately after accession. Demanding
the right of self-determination on the
grounds that Ladakh was ‘‘a separate na-
tion by all the tests—race, language, re-
ligion, and culture determining nation-
ality,’’ this organisation submitted a
memorandum to Maharaja Hari Singh in
this regard presenting him with three
options vis-à-vis Ladakh—that the
maharaja could maintain direct rule over
Ladakh, or that Ladakh could be merged
with the Hindu-majority parts of Jammu
in a separate administrative unit, or that
it could be permitted to join East Punjab
(Van Beek 2004). On getting no re-
sponse from the ruler, the YMBA later ap-
proached Jawaharlal Nehru suggesting
that “Ladakh should straightaway merge
with India” (Bertelsen 1997: 148). Rather
than looking for empowerment of Ladakh,
the urge in Leh at that time was to be
under the direct control of the union.
The demand for bringing Ladakh under
the union control continued to be vocif-
erously raised in the decade of 1960s, es-
pecially after Ladakh was briefly adminis-
tered by the union after the Chinese
aggression (Van Beek 2004: 203). Though
the demand for union control over Ladakh
persisted throughout the next few decades,
it was in the late 1980s that the demand
for carving a separate union territory for
Ladakh was raised by the Ladakh Buddhist
Association (LBA), as the YMBA was
renamed in the post-1947 period.
The LBA controlled the narrative of
Leh’s politics in such a way that despite
being only a socio-religious organisa-
tion, it defined the logic of politics of this
district. That is the reason why for all
Leh-based political parties, regional au-
tonomy of Ladakh and the demand for
union territory status was the central
plank of their politics. Even the local
units of national parties like Congress
vociferously raised these demands irre-
spective of their national stance on the
issue. So dominant was the narrative of
14
union territory demand in Leh that at one
point of time the rival parties operating in
Leh decided to dissolve their local branch-
es and form a combined front, Ladakh
Union Territory Front (LUTF) for fighting
for the union territory status.2 Though
this front could not sustain itself for long,
the tendency of the political parties to
dissolve their differences to support the
demand for union territory continued.
This demand continued to be raised
throughout the last three decades. This
being so despite the fact that after the
1989 agitation, a large majority of Ladakhi
population was granted the ST status and
the region was granted two Autonomous
Hill Development Councils, one each for
Leh and Kargil.
The demand for union territory, how-
ever, was exclusive, raised only in Leh. It
did not receive support from Kargil which,
in fact, did not have a political voice for
a long time. Being relatively backward
and lacking political mobilisation, it did
not assert even its opposition to the Leh-
dominated politics of Ladakh till very
late. It was only after 1979 when the sin-
gle district of Ladakh (so far comprised
two tehsils of Leh and Kargil) was bifur-
cated and Kargil acquired the status of a
full-fledged district that Kargil’s political
response started taking shape.
Vociferous opposition to the demand
of union territory was one major compo-
nent of Kargil’s identity politics, the other
component being the issue of economic
and political dominance of Leh within
Ladakh. In fact, it was the lack of parity
between the two subregions that led the
Kargil leadership to oppose the union
territory status for Ladakh. There was
an apprehension that in case Ladakh is
granted the union territory status, Leh
would continue to dominate administra-
tion and economy and this might further
lead to the subordinate position of Kargil.
This apprehension also defined the
response of Kargil leadership towards
Kashmir. While Leh’s political class was
antagonistic to Kashmir’s leadership, Kar-
gil’s leadership was quite positively ori-
ented towards it and looked up to it for
political and administrative support. In
any case, Kargil being a predominantly
Muslim area, its leadership identified
with the Muslim majority character of
MAY 6, 2023
the state and Kashmiri discourse of the
special constitutional status.
The post-1979 politics of Ladakh there-
fore was internally quite fragmented with
Leh and Kargil following divergent and
rather altogether opposite directions.
How the political mobilisation in these
two districts was taking altogether dif-
ferent directions, could be seen during
the 1989 agitation in Ladakh. While the
LBA was raising the issue of “neglect” of
Ladakh by the state government and
demanding ‘‘an alternative administra-
tive set-up wherein the ethnic cultural
and traditional identity of Ladakhis is
safeguarded’’ in the form of union terri-
tory, Kargil leadership meanwhile was
voicing its own grievances vis-à-vis Leh
district and complaining about the neglect
of Kargil and exclusion of Muslims from
Ladakh’s politics. It was also blaming
the Buddhist leadership for vitiating the
traditional harmony between communi-
ties and polarising the politics of Ladakh.
Response to Union Territory
Declaration and After
It was due to the binary nature of identity
politics and the divergent political aspi-
rations that the response to the union
government’s decision to reorganise the
state and give Ladakh a union territory
status was also divergent. While there
was a sense of jubilation in Leh, a sense
of despondency was evident in Kargil.
As protests erupted in Kargil, an all
Party Action Committee comprising all
social, religious, and political parties
demanded reversal of the decision. Opp-
osing both the withdrawal of the special
constitutional status as well as bifurca-
tion of J&K state and formation of union
territory of Ladakh, the leadership iden-
tified with Kashmir-based leadership
and even supported the Kashmir-based
People’s Alliance for Gupkar Declaration
(PAGD). While demanding pre-August
status quo, it also made demands for
a separate union territory for Ladakh.
Alternatively, it demanded equal devel-
opment and representation of Kargil
along with Leh in the Ladakh union ter-
ritory. Very early in its response, the Kargil
leadership raised concerns about the po-
litical representation, land, employment
in the new set-up.
vol lViii no 18 EPW Economic & Political Weekly

It was altogether a different scenario
in Leh. For the political class here, the
grant of union territory status was an
unexpected but a welcome develop-
ment. For decades, the politics of this
district had revolved around the de-
mand for separation from Kashmir and
with the fulfilment of this demand there
was a sense of satisfaction. Even when it
was declared to be a union territory
without a legislature, there was a feeling
that the region would finally get a better
deal in terms of development and its lo-
cal needs that was denied to it by the
Kashmiri political elite.
Situation changed in both Leh and
Kargil, in less than a year. While Kargil
leadership withdrew from its pro-
Kashmir stance and started focusing on
its future equation with Leh and Kargil’s
empowerment, Leh’s leadership mean-
while started feeling disillusioned vis-à-
vis the existing union territory status. It
was realised that in mere separation
from Kashmir or J&K state, Ladakh was
not getting empowered. More impor-
tantly, a rethinking started taking place
about its earlier urge for direct union
control over Ladakh.
Ladakhi Concerns after
the Formation of Union Territory
In the post-2019 situation, a number of
concerns were commonly felt in Leh and
Kargil. Many of these concerns were rel-
ated to protection of rights enjoyed by
Ladakhis as part of J&K state—mostly
those related with the permanent resi-
dent status of Ladakhis. As part of the
state of J&K, they held the Permanent
Residence Certificate (PRC) which gave
them the exclusive right, along with oth-
er residents of J&K state, over land and
state jobs.3
With PRC becoming obsolete, Ladakhis
felt insecure not only about jobs but also
about their land. The fear that in the abs-
ence of any special constitutional provi-
sion to protect their land, there might be
an influx of outsiders and entry of land
mafia endangering not only the right of
the natives over land but also endangering
their culture, heritage, and environment.
In light of extensive processes of
centralisation and bureaucratisation of
Ladakh, there were also concerns about
Economic & Political Weekly EPW MAY 6, 2023
lack of political representation. Being a
union territory without legislature, it
meant that other than through a single
MP, Ladakhis would not be politically
represented at any level. As part of J&K
state, Ladakh was quite well politically
represented with four members of legis-
lative assembly and two members of leg-
islative council, one or two ministers in
government, and members of various
boards and bodies. The situation was
made worse with lack of clarity in the
new system about the Hill councils.
These councils which in any case did
not have legislative powers were seen
to be made irrelevant by the parallel
administrative system.
New Politics and New Strategy
It was in response to these concerns that
the Ladakhi politics started reshaping
itself. Protesting and making demands
on their own, the Leh and Kargil leader-
ship took some time to come out of the
mould of the traditional binary of Leh–
Kargil relationship and continued their
struggle independently. While the Leh
leadership under the banner of Apex
Body of Leh’s People’s Movement for Sixth
Schedule for Ladakh (Leh Apex Body)
started demanding constitutional protec-
tion for Ladakh under the Sixth Schedule
of Indian Constitution and Kargil Demo-
cratic Alliance (KDA) started demanding
vol lViii no 18
COMMENTARY
statehood for Ladakh. But soon these two
bodies decided to engage with each other
for common struggle. It was in this process
that both the bodies started moderating
their position and accommodating each
other’s viewpoint. Kargil’s leadership that
had so far been demanding restoration of
the pre-August 2019 status quo, especially
the restoration of Article 370, agreed to
drop this demand on the grounds that this
issue was sub judice. Leh’s leadership
that had been opposing Kargil’s demand
for statehood, agreed to make it a part of
the demands to be jointly made by Leh’s
Apex Body and KDA. A consensus was
therefore evolved around the demands
for full-fledged statehood with constitu-
tional safeguards; residential certificates
on the lines of PRC, two seats in Lok Sabha
and one in Rajya Sabha seat for Ladakh,
and immediate filling up of vacancies of
government jobs. It was also decided
that the two bodies will thereafter oper-
ate jointly and rather than projecting
their demands separately, will make a
common case as demands for Ladakh. It
was also decided that any negotiation
with the union will be done by a joint
delegation of Leh and Kargil.
On the whole, there is a change both
in the content of Ladakhi identity poli-
tics as well as the strategy. Content-wise,
the Ladakhi identity politics before 2019
was exclusive, fragmented, divisive and
15
COMMENTARY
sectarian. Whether it was the Buddhist
identity politics of Leh or Muslim identity
politics of Kargil, it was communal and
binary in nature, based on the process of
“othering”—Leh’s “othering” of “Kashmir”
and “Muslims” and Kargil’s “othering” of
“Leh” and “Buddhists.” The peak of such
an othering process could be seen during
the 1989 agitation in Ladakh when the
communication between Buddhists and
Muslims was completely halted. Having
started with the LBA’s call for boycott of
Kashmiri Muslims and later all Mus-
lims—this agitation resulted decimating
the centuries-old common cultural prac-
tices of Ladakh and creating a wide gulf
between these communities.
One can see as to how with the com-
ing together of Leh and Kargil’s political
bodies, for the first time, not only a con-
sensus has evolved over the common
issues faced by the Ladakhis but has led
to a unified Ladakhi identity politics. This
politics rather than focusing on issues
related to religious and regional divide,
is focused on issues related to empower-
ment of common Ladakhis—issues that
are related to their day-to-day existence.
More importantly, this politics has tak-
en a real federal turn. Though the demand
for union territory status was linked
with the concept of “regional autonomy”
for Ladakh, the logic of the demand was
much more rooted in the idea of separa-
tion from “Muslim-majority” Kashmir.
As already noted, throughout the history
of demand, the alternative to Kashmir-
centric control over Ladakh in the
Ladakhi imagination was the “direct rule
by the union.” For the first time, Ladakhi
demands are based on the idea of em-
powerment of Ladakh vis-à-vis the un-
ion. The new politics is actually based on
resistance against extreme centralisation
and administrative rule. The demand
that is made is to replace the rule of union
and central cadre of bureaucracy with a
locally representative system of govern-
ance. Demand is also made for local
control over resources.
Strategically also, the new politics is
much more forward-looking. Keeping in
view the background of divisive politics
of Ladakh and the apprehension that the
two subregions can be used against each
other, the political leadership of Leh and
16
Kargil has sought to overcome their tra-
ditional differences, accommodated each
other’s point of view and developed a
consensus in the larger interest of the
region. Meanwhile, with a long history
of inter-religious contestations, the pot-
ential of divisive issues coming up any
point of time and impacting the new-
found unity of the two regions, is reco-
gnised and dealt effectively.4
On the whole, even when one can see
a stalemate in Ladakh, there is a positive
orientation towards their struggle.5 While
the major demands like constitutional
protections for Ladakh under the Sixth
Schedule have not been met, the Ladakhis
have resisted major changes that could
have taken place in Ladakh after the for-
mation of union territory. Some of the
changes which the union government
succeeded in bringing about in the union
territory of J&K, for instance, the new
domicile law and the new land policy,
have not been introduced so far in
Ladakh.6 In view of the strong resistance
of Ladakhis, these changes have not been
introduced in Ladakh. On the contrary,
the Ladakhis have had a small victory in
terms of getting the relevance of PRC
recognised, at least for the non-gazetted
jobs. These jobs are now reserved for
Ladakh residents who were by definition
the holders of the PRC.7
In just three and a half years after the
formation of union territory of Ladakh, the
political class of Ladakh has given a new
direction to the identity politics of Ladakh.
In view of the long history of divisive ten-
dencies within, the question however
remains—will this politics sustain?
Notes
1 In giving a direction to Ladakh’s politics that
was antagonistic to Kashmir, the Buddhist
leadership of Leh was as much impacted by the
perception that Ladakh was being neglected
and discriminated against by the Kashmiri
elite at the helm of affairs, as they were per-
turbed by the context of conflict. There was lot
of apprehension in Leh about the uncertainties
linked with the accession, more importantly
the internationalisation of the Kashmir ques-
tion and the very question of plebiscite.
2 The Ladakh Union Territory Front that was
formed just before the 2002 assembly election,
contested the election and succeeded in win-
ning both the assembly seats from Leh.
3 There were comparatively greater opportuni-
ties for jobs for Ladakhis in J&K state. Being
the major ST group of the state (along with
the Gujjars), they also enjoyed the benefit of
reservation. A smaller region of Ladakh
MAY 6, 2023
would not give them as many opportunities
for employment.
4 For instance, a recent potentially divisive situa-
tion related to a long-standing Buddhist demand
to have a Buddhist monastery in Kargil which
was resisted by Muslims on the grounds that
there are not many Buddhists in this district,
was handled very effectively. In view of a provoca-
tive march by the Buddhist Monk Chokyong
Palga Rinpoche to Kargil, the issue was resolved
as with the intervention of KDA the district
magistrate assigned land to Buddhists to build
the monastery. The Buddhist leadership of Leh
meanwhile played its role in restraining the Leh
people from using provocative language.
5 Two years since the leadership of Leh and Kar-
gils have come together, they have found
strength in joint struggle. Common Ladakhis,
meanwhile, have responded positively to the
change and whenever a call for strike has been
given, there has been a tremendous response.
With the exception of the BJP, all other socio-
religious organisations and even the members
of the two hill councils have come out in sup-
port of the joint struggle.
6 For purposes of state jobs, a new category of
domiciles has been added in J&K—these in-
clude the central government employees, those
who have been the resident of the union terri-
tory for 15 years, those who have passed their
Class X and Class XII exams from the union ter-
ritory. Meanwhile, change has also been brought
in the land laws of J&K. While domiciles have
the right to hold agricultural land, non-agricul-
tural land has been made open to all Indians.
Provision has also been made for conversion of
agricultural land into non-agricultural one.
7 Ladakh Resident Certificate Order 2021 “tem-
porarily defines” as a resident of the Union Ter-
ritory of Ladakh as: “Any person who possesses
a Permanent Resident Certificate issued by the
competent authority in the district of Leh and
Kargil or belongs to a category of person who
would have been eligible to be issued PRC shall
be eligible to receive the “Resident Certificate.”
References
Bertelsen, Kristoffer Brix (1997): “Protestant Bud-
dhism and Social Identification in Ladakh,”
Archives de sciences sociales des religons, 42e
annee, No 99, July–September, pp 129–51.
Van Beek, Martijn (2004): “Dangerous Liasons:
Hindu Nationalism and Buddhist Radicalism in
Ladakh,” Religious Radicalism and Security in
South Asia, S Limaye, M Malik, R A Wirsing
(eds), Honolulu, HI: Asia-Pacific Center for
Security Studies, pp 193–218.
Permission for
Reproduction of Articles
Published in EPW
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should be reproduced in any form without
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should be sent to EPW.
In cases where the email address of the
author has not been published along with
the articles, EPW can be contacted for help.
vol lViii no 18 EPW Economic & Political Weekly
COMMENTARY
Critiquing ‘Component C’
The Health Parameter of
the Comprehensive Environmental
Pollution Index
Adithya Pradyumna
The comprehensive
environmental pollution index
has been applied to identify
and monitor industrially
polluted clusters in India. In the
calculation of the CEPI, there is a
health parameter (Component C),
which uses local health-related
data. The article draws attention
to the gaps in the design
and guidelines to calculate
Component C.
The author thanks Awanish Kumar, Shweta
Narayan, and an anonymous reviewer for their
valuable inputs on this article.
Adithya Pradyumna (adithya.pradyumna@
apu.edu.in) teaches at Azim Premji University,
Bengaluru.
26
T
he Bhopal gas tragedy occurred
over 35 years ago which was an
industrial “accident” and the con-
sequence was the loss of life and health
for thousands of people. On paper, les-
sons were learnt due to this tragedy,
with policy attention to industrial pollu-
tion in the form of the environment act
and various provisions under it. One
such provision was the Environmental
Impact Assessment (EIA) notification in
1994 (revised in 2006) that established
the need for prior environmental clear-
ance for industrial and large infrastruc-
tural projects.
This approach also incorporated con-
sideration for health and social risks at
the stage of project planning (EIA 2006).
Besides this, there are also air and water
quality standards, which provide cut-offs
for levels of air pollution and water pol-
lution in residential, industrial, and eco-
logically sensitive areas (CPCB 2009b).
The point that is often missed is that
the objective of these standards is to pro-
tect human health, though they are refe-
rred to as “environmental” standards.
These standards are primarily based on
the instrumental value of the environ-
ment for human health. Protection of
other life and property is also part of the
objective, but not the primary one. How-
ever, the pollution standards as defined
in India are lax in comparison to inter-
national standards. For instance, the air
pollution standards set by the World
Health Organization (WHO) for particu-
late matter or PM 2.5 is 10 parts per
million or PPM, as compared to that in
India which is 40 PPM in the National
Ambient Air Quality Standards (CPCB
2009b; WHO 2006). The difference in
standards is more ominous than it al-
ready looks, because health outcomes
MAY 6, 2023
are exponentially associated to a change
in pollution levels.
Hence, to begin with, even the legal
standard is not necessarily healthy. So,
theoretically, these standards are in
place for “health” but they compromise
to enable the continued use of polluting
technology. One might expect that ade-
quate pollution control efforts are made
to ensure that at least these lax stand-
ards are adhered to, if not the more
stringent international standards.
However, pollution, including indus-
trial pollution, is widespread in India.
Even within cities such as Bengaluru,
that are not considered as industrial
hubs, industrial pollution contributes to
the ambient air quality (TERI 2010). Ind-
ustrial “accidents” also occur regularly
at smaller scales and sometimes at a
scale that warrants media attention;
for instance, the recent incident from
Vishakhapatnam wherein the plant had
been set up even without prior environ-
mental clearance (Bhattacharjee 2020).
Of course, these “accidents” occur even
when all official permissions and checks
are in place; for instance, with the
Neyvelli boiler explosions in mid-2020,
the second one resulting in the death of
at least six persons (Rekhi 2020). In ef-
fect, industrial pollution and such acute
incidents are both contributing to death
and ill health in India.
The matter of industrial pollution
takes an altogether different scale and
scope in industrial clusters. In these areas,
industries are the primary source of pol-
lution. There are several industrial clus-
ters across the country. An exercise was
conducted in 2009 by researchers from
the Indian Institute of Technology Delhi
to identify and grade the level of pollu-
tion in industrial clusters. For this, they
developed the “comprehensive environ-
mental pollution index” (CEPI). This
index was revised in 2016. It is a quanti-
tative index calculated using data on
various predefined parameters from the
local area.
Estimates are made separately for air
pollution, water pollution, and land poll-
ution (sub-indices of the CEPI). Each of
these sub-indices are composed of the
following: (i) type of pollutants (Compo-
nent A1: presence of toxin), (ii) scale of
vol lViii no 18 EPW Economic & Political Weekly

industrial activities (Component A2:
presence of highly polluting industries
within 10 sq km), (iii) violation of pollu-
tion levels (Component B: level of expo-
sure), (iv) health effects (Component C:
receptor), and (v) measures that have
been undertaken to control pollution
within the industries and in the local
area (Component D: additional high-
risk element).
The scores are calculated for each
component of a sub-index, and then
combined using the prescribed weight-
ages to arrive at the final score for each
sub-index. The combination of the scores
of the three sub-indices gives the final
CEPI score for the industrial cluster, which
is then compared with the pre-defined
cut-offs to decide whether the local pol-
lution is of critical nature (CPCB 2016).
The initial application of this framework
unsurprisingly identified several (34) criti-
cally polluted areas across India, includ-
ing Vapi and Ankleshwar in Gujarat, and
Ghaziabad in Uttar Pradesh among the
top scorers (CPCB 2013). Other ap-
proaches to identify polluted industrial
clusters have been used since 1989
(Kanchan 2017).
The government took action based on
the results of the application of the CEPI
framework, through moratoriums against
further expansion of polluted clusters,
and also directed state pollution control
boards (SPCBs) to work with the indus-
trial clusters to address the identified
pollution challenges, so that the activi-
ties could resume (CSE 2015). But at this
juncture, it is worthwhile asking a few
questions, such as, what were the pollu-
tion control boards (PCBs) and industries
doing in the first place? Why did these
areas become critically polluted?
Anecdotally, it was heard that to con-
tinue situating new industries in already
polluted clusters was considered a better
option, simply because they are already
polluted. This is problematic because sev-
eral communities and schools are often
located in the vicinity of polluting indus-
tries and industrial clusters and these
pollutants contain various health hazards
depending on the type of the industries.
The EIA approach through prior envi-
ronmental clearance and the regular
pollution monitoring approach by PCBs
Economic & Political Weekly EPW MAY 6, 2023
COMMENTARY
are expected to serve as preventive Health Aspects of the CEPI
measures to industrial pollution. How- Component C of the revised CEPI guide-
ever, based on the existence of critically lines addresses the direct health con-
polluted industrial areas, it can be con- cerns in the polluted area. The score out
cluded that these have failed and the of 10 (which could be 0, 5, or 10) is based
existing guidelines and standards on on whether and to what extent there has
emissions, effluents, air and water qua- been a change in the prevalence of
lity have not been adequately enforced. health effects of air, water and soil pollu-
The EIAs are reduced to checkbox tion. The argument that the new ap-
exercises and technical fixes rather than proach for the health component of the
an opportunity for protecting and enha- CEPI is more objective—“overcome the
ncing environmental health (Pradyumna subjectivity” (CPCB 2016)—is on shaky
2015). So now the CEPI comes into the grounds. Rather it has moved from a
picture: a diagnostic test to identify areas more robust approach of triangulation
suffering from critical pollution—these of data through the consideration of var-
are places that need treatment and reha- ious data sources on the experience of
bilitation (Figure 1). It is a “post-mor- health effects locally—“news reports,
tem” type of approach (Kanchan 2017) magazines, journals, NGO studies, pub-
which may also be dying due to neglect lished literature etc” (CPCB 2016), which
and abuse. errs on the side of including public opin-
From the Central Pollution Control ion and precaution (CPCB 2009a)—to
Board (CPCB) website, one can down- fully relying on data from a few local
load the 2013 CEPI assessment report, hospitals (CPCB 2016).
which is the most recent one on the web- I also briefly examine in the next
site (CPCB 2021a). There has not been a section how this plays out in practice.
more recent comprehensive Figure 1: Preventing Industrial Pollution in India—Options for
assessment report from any Interventions
of the polluted clusters, but
Tertiary prevention [rehabilitation of areas
action plans from various that have become critically polluted]:
polluted clusters continue to Through CEPI, and follow-up actions—this
can identify critically polluted areas, where
be updated on the website
stringent measures and effective regulation
(CPCB 2021b). are needed to curb pollution
Interestingly, there was a ↓
revision in the CEPI method-
Secondary prevention [early diagnosis and
ology in 2016, which, among
treatment of the pollution problem]:
other things, was done to
Through EIA pollution monitoring and CEPI—
make the health parameter
each of these can identify areas where pollution
more “objective” (CPCB 2016). level have exceeded standards, and need to be
The weightage for the health reduced, and will require effective regulation
parameter (Component C) is ↓
just 10 out of the total score of
Primary prevention [prevention of pollution despite
100, but the inclusion serves
presence of industries]:
as a recognition that human
Through EIA pollution monitoring zoning policies—
health, which is eventually
these approaches have the potential to prevent pollution
impacted due to industrial in areas with existing industrial activity, through stringent
pollution, is being consid- regulation of sources ,optimal use of pollution control
ered. Irrespective of whether technologies, situation only clean industries, etc
the new or old CEPI method ↓
is used, it has even been not-
Primordial prevention [prevention of occurence of pollution sources]:
ed by observers that the CEPI
Through environmental impact assessment [EIA, zoning
exercises and temporary policies]—they have the potential to prevent the occurence
moratoriums have not abat- of pollution environmental degradation and ill health from
ed industrial pollution in industrial activity by influencing the siting of industries,
those clusters, indicating protecting vulnerable areas and communities, with suggestions
deeper problems in account- and alternatives, etc
ability (Kanchan 2017). Source: Author.
vol lViii no 18 27
COMMENTARY
However, it is important to also remem-
ber that the criteria are just one small
part of the puzzle in pollution abate-
ment, and this is not to say that the way
in which the index is calculated is the
main problem in solving the issue of pol-
lution in India.
The argument being made in this
comment is that the guidelines for Com-
ponent C are not specific, detailed, or
appropriate enough to ensure that the
score is a valid reflection of the health
problems being faced locally due to the
local industrial pollution. There are var-
ious issues:
The recommended use of disease data
from ‘three-five hospitals’: The guide-
lines suggest to use the data from three,
five, or more hospitals, but this is of less
concern. How these hospitals should be
selected is of greater importance. Ideally
they should be the ones that local people
use. This can only be found out based on
local studies on healthcare utilisation
for various relevant health problems, for
instance, by conducting a healthcare
services and opportunities mapping ex-
ercise. No such guideline on the selec-
tion of appropriate hospitals is men-
tioned in the CEPI guidelines, so it is
open to the interpretation of those con-
ducting the CEPI exercise, and is amena-
ble to be applied in a way that can show
the health situation in a positive light.
Local people may not even visit hospi-
tals due to high costs, and may visit
pharmacies. In one CEPI report that the
author came across, there was not a sin-
gle case of any communicable or non-
communicable disease (for example, dis-
eases such as tuberculosis and asthma)
recorded by the two included hospitals
over a five-year period in that industri-
ally polluted area. These data are un-
likely even in a pristine environment.
This guideline also makes the major
assumption that hospitals would system-
atically document data of their outpa-
tients and inpatients, and that it will be
done electronically to improve retrieval
and access. This is not the case on the
ground. So how can the reported num-
bers be verified? Have hospitals in these
areas been instructed to systematically
document the data of all persons that
28
utilise their services? This does not ap-
pear to be the case. In effect, just men-
tioning in the guidelines that health
data from three to five hospitals should
be used, does not in any way guarantee
valid information on local health status.
Criteria for scoring: Scores of 0, 5, and
10 (out of a maximum of 10) are given
based on whether there is a 5%, 5%–
10%, or more than 10% increase in the
relevant cases locally. However, this too
has issues: (i) as the criteria is based on
an “increase” in cases for a particular set
of diseases, what if the prevalence is al-
ready so high in the area that there is no
increase per se, but a significant propor-
tion of the population has been consist-
ently affected over years? This might
well be the case in industrial clusters
that have been around for over 10 years.
Besides this, the basis for the 5% and
10% increase as cut-offs is unclear and
seems arbitrary; (ii) another issue here
is about lack of clarity in identifying the
exposed population. This has not been
specified, and leaves scope for misinter-
pretation. What if ill people are forced to
leave the area to prevent further deterio-
ration of their health? How would that
be accounted for? All of these points
demonstrate that the criteria for the
scores are deficient in their conceptuali-
sation and guidance.
Types of cases that will be considered:
The guidelines mention that
For Air Environment, total number of cases
related to asthma, bronchitis, cancer, acute
respiratory infections, etc, are to be consid-
ered; For surface water/ground water envi-
ronment, cases related to gastroenteritis,
diarrhoea, renal (kidney) malfunction, can-
cer, etc, are to be considered. (CPCB 2016)
This is not a complete list, and some are
generic conditions (cancer) and sym-
ptoms (diarrhoea) and not diagnoses
or specific diseases per se. Here it will
depend on the interest and knowledge
of the CEPI applicants to incorporate
appropriate diseases based on the spe-
cific identified local hazards, which is
good in theory. However, without clear
guidelines on how the relevant con-
cerns should be identified and included,
this too provides a lot of scope for
MAY 6, 2023
misreporting, further denting the case
that this revised CEPI approach made
things more objective.
Overall score of ‘10’ for health: While
the weightage for health is small in the
index, it can influence the overall index,
and hence inappropriate or manipulated
health data from hospitals in the area
can lead to a score of 0 out of 10. About
the weightage itself (10 out of 100), the
author’s opinion is that this is adequate,
because of two reasons: (i) reducing pol-
lution is the main objective, which will
inevitably improve human health, and
(ii) it is easier to monitor pollution in a
systematic and transparent way, as com-
pared to monitoring health outcomes.
A general neglect of health: One paper
published on the revised CEPI formula
incorporated data and modelling for all
parameters except the health parame-
ter—making the assumption that it was
a score of 5, with reasoning that health
data “was not available” (Rajamani-
ckam and Nagan 2018). This indicates at
least two things. The first is that health
data availability and access is a chal-
lenge. Second, because the weightage for
health is small and accessing this data is
complicated, it can be neglected or as-
sumptions can be made. This kind of
thinking and practice tracks with the
general neglect of human health consider-
ations in the broader development sector.
Conclusions
The “critical” levels of air, water, and
soil pollution across several industrial
areas in India are potentially costing the
local people and public health systems
dearly. If COVID-19 has strongly reminded
us about anything, it is that good health
is an asset. Similarly, protecting the det-
erminants of health, such as air, water,
and soil is also an investment. There is a
need to strengthen preventive measures
available at
Gyan Deep
Near Firayalal Chowk,
Ranchi 834 001, Jharkhand
Ph: 09470564686
vol lViii no 18 EPW Economic & Political Weekly

against industrial pollution by stronger
environmental (and health) impact
assessment and pollution monitoring. In
addition, there is a need for more det-
ailed guidelines on the health compo-
nent of the CEPI, specifically to ensure
that (i) the hospitals are chosen appro-
priately in accordance with the pattern
of utilisation by the local population;
(ii) these hospitals document the rele-
vant data; and (iii) there should be alter-
natives to using only trends in disease
prevalence as that may not tell us ade-
quately about the role of local pollution
in contributing to it.
There is also a disconnect between
the policy intentions and ground reali-
ties. For instance, with the CEPI, the ca-
pacity of local pollution control and
health institutions to conduct the exer-
cise in letter and spirit was not consid-
ered. This indicates the need for capaci-
ty building in terms of systematic moni-
toring of pollution and health data, and
the access and utilisation of pollution
data by health officials. This would also
mean the need for stronger cross-de-
partmental collaborations, and, here,
the health ministry and national health
institutions can play an important role.
Finally, without the local voice, the
pursuit of objectivity in calculating the
index is hampered. As has been shown
from lay epidemiological processes world-
wide, the lived experience of local peo-
ple and their understanding of their exp-
osure to hazardous pollutants on a daily
basis can be of great value as compared
to just pollution monitoring and hospital
data (SIPCOT Area Community Environ-
mental Monitor 2004). And let us not
forget that irrespective of how the index
is calculated, the main failure remains
the “failure to penalise the polluting in-
dustries” (Kanchan 2017) and also the
lack of health-sensitive planning and ex-
pansion of industrial areas (Pradyumna
2015). There is a need to critically review
current practices to improve accounta-
bility for industrial pollution to protect
the population’s health.
References
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Leak: How Negligence and Violations Led to a
Deadly Disaster,” Hindu, 6 June, https://www.
thehindu.com/news/cities/Visakhapatnam/
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COMMENTARY
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violations-led-to-a-deadly-disaster/arti- ter-58292.
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EIA (2006): “Environment Impact Assessment WHO (2006): “WHO Air Quality Guidelines for
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to Earth, 18 July, https://www.downtoearth. World Health Organization, Geneva.
Call for Papers
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vol lViii no 18 29
COMMENTARY
India’s Toy Industry
Production and Trade since 2000
Abhishek Anand, R Nagaraj, Naveen Thomas
India has turned a net toy
exporter lately—claimed as an
evidence of the success of
“Make in India” and related
promotional policies. Analysing
a unique, unit-level data
set of formal and informal
manufacturing and trade since
2000, the official claims and
policy outcomes are assessed.
The authors thank Radhicka Kapoor for her
extremely valuable comments.
Abhishek Anand (abhishek_anand444@
yahoo.com) is a consultant with
PricewaterhouseCoopers, Dubai. R Nagaraj
(rayaprolu.nagaraj@gmail.com) is a former
professor of economics. Naveen Thomas
(naveenthomas@jgu.edu.in) teaches at the
Jindal School of Government and Public Policy,
O P Jindal Global University.
20
R
ecently, the toy trade figured in the
news headlines. Between 2018–19
and 2021–22, toy exports report-
edly rose from $109 million (`812 crore)
to $177 million (`1,237 crore); the imports
declined from $371 million (`2,593 crore)
to $110 million (`819 crore), the official
press release stated.1 Taking credit for
arresting rising imports, the government
sources claimed that it as the success of
“Make in India,” in response to the Prime
Minister’s clarion call given in his weekly
talk show, Mann ki Baat, in August 2020.
Inspired by the success, the government is
reportedly now spawning a similar strat-
egy for electrical fans and smart elec-
trical meters (Business Standard 2022).
The call to raise toy production and
exports is in line with Make in India—the
government’s flagship initiative launched
in October 2014. It aimed to boost manu-
facturing sector’s share in gross domestic
product (GDP) to 25% (from about 15% in
2014) and create 100 million additional
jobs by 2022.
Historically, many successfully indus-
trialising nations have targeted toy making
as one of the labour-intensive industries
for exports—starting with Japan about a
century ago (Lockwood 1974), recently in
China, and now in Vietnam (Cross and
Smits 2005). Such a route to industriali-
sation is seen as virtuous as it augments
unskilled labour demand, thus contrib-
uting to an equitable growth process.
China is currently the world’s largest toy
producer, and the United States (US) is its
biggest market. In 2021, China accounted
for 78% of the US toy imports (India’s ex-
ports are $0.3 billion, 0.5% of the US im-
ports). China’s exports to the US formed
36.4% of its total exports (Hindu 2023).
The policy environment: For employ-
ment promotion, India’s planning en-
couraged consumer goods production by
traditional methods—in “cottage indus-
try,” as in the early plan documents, by
MAY 6, 2023
fiscal incentives and physical controls—
best illustrated by the textile policy.
Considering export pessimism (the then
prevailing policy orthodoxy) the govern-
ment-imposed investment and output
restrictions on export-oriented compos-
ite (spinning and weaving) textile mills;
instead it prioritised labour-intensive
handloom weaving in the decentralised
sector for home consumption.
In 1967, the restrictive policy was
extended to about 800 labour-intensive
products for exclusive manufacture in
the small-scale sector (micro, small, and
medium enterprises [MSMEs] in current
parlance)—known as the “reservation
policy”—as per the Small-Scale Reserva-
tion Policy, 1967. However, to avoid supply
disruption, the running firms in the
large-scale sector were allowed to con-
tinue in business. They were also per-
mitted to expand capacity subject to the
export of at least 75% of their output
(Report of the Expert Committee on
Small Enterprises 1997).2
Toy manufacturing was one such
“reserved” item. Though negligible in size,
critics flagged its poor growth to argue
their case against the reservation policy.
Toy making remained traditional and
backward, confining itself to producing
shoddy goods (with poor quality and
safety standards) with fragmented pro-
duction and marketing structures, even
as modern, safe, and technically superior
toys of international brands got increas-
ingly imported.
In 1997, in the wake of the liberal eco-
nomic reforms, the reservation policy
was abolished, as recommended by the
Abid Hussain Committee (Government of
India 1997). The committee argued that
the policy was not sufficiently discrimi-
natory in favour of small-scale enterpris-
es, which showed a growth potential.
Recent reviews of the ‘de-reservation’
policy: What did “de-reservation” ac-
complish? The question has attracted
considerable academic attention. It rep-
resented a “policy experiment” amenable
to well-designed micro-econometric anal-
ysis given the availability of factory-level
(unit-level) production data from the
Annual Survey of Industries (ASI). Many
studies have claimed that the dismantling
vol lViii no 18 EPW Economic & Political Weekly

of reservation policy had positive out-
comes—vindicating the predictions of
the policy reforms. Martin et al (2017)
find that de-reservation led to the entry
of new firms and the expansion of output
and investment. Similarly, Garcia-Santa-
na et al (2014) show that lifting the
small-scale reservation laws increased
output by 6.8% in manufacturing and 2%
in the overall economy, and total factor
productivity (TFP) by 0.75%. Alfaro et al
(2014) find that deregulation led to a de-
cline in resource misallocation and in-
creased entry by small firms.
However, most of these academic
studies suffer from a major shortcoming:
they looked at only the organised or
factory sector. Such firms accounted for
a small fraction of toy-producing firms/
establishments and employment.3 They
ignored that a substantial share of the
industry lies outside the registered sector
in the unorganised (informal) sector. In-
ter-firm linkages in the two sectors could
make the two segments interdependent.
Hence, such studies’ findings remained
partial and for a modest number of years.
These studies appear like the proverbial
case of looking for the lost key under
the light and not where the key was
lost! The studies, focusing mainly on a
reduction in the entry barriers for new
firms, also fail to relate the purported
(efficiency) gains with industry-level
output expansion and its effects on net
imports (a vital outcome for policy).
Questions, Methodology, and Data
The questions: With the availability of
the unit-level data for the National Sample
Survey (NSS) of the unorganised manu-
facturing sector (though for select years),
it is now possible to combine the produc-
tion data from organised (ASI) and unor-
ganised sectors and relate them to the
(harmonised) trade data at the four-dig-
it level of disaggregation) to obtain a
Table 1: Toy Industry—Basic Facts (Combined for Registered and Unregistered Sectors)
Number of Factories/Enterprises
Year Registered Unregistered Total
2000–01 42 20,831 20,873
2005–06 176 9,357 9,533
2010–11 98 13,971 14,069
2015–16 151 14,658 14,809
Economic & Political Weekly EPW MAY 6, 2023
fuller statistical picture of toy produc-
tion and trade since 2000. Using the
comprehensive data set thus put togeth-
er, this study seeks to examine the out-
comes of the policy interventions. The
questions posed are the following:
(i) Did the clarion call given in 2020 really
boost the long-term trends in toy exports
and reduce imports during the last two
years, as officially claimed? Assuming the
reported outcomes are credible, their
sustainability would depend on how
policy initiatives such as Make in India
strengthened domestic production capaci-
ties to beat the rising imports. Therefore,
(ii) did Make in India have the desired ef-
fect on output and employment in toy
manufacturing on a trend basis?
(iii) What are the long-term effects of
de-reservation on the industry, both in
the organised and unorganised sectors?
Did the reforms boost the entry of new
firms leading to an expansion of invest-
ment, output, and employment and a re-
duction in net exports?
Methodology and its limitations: The
study has used, as mentioned, ASI unit-
level data since 1998–99 to obtain a lon-
gitudinal picture of organised or regis-
tered segments of the toy industry. NSS
data on unorganised manufacturing in-
dustries are used for 2000–01, 2005–06,
2010–11, and 2015–16 to build a complete
and consistent industry profile for these
years.4 And disaggregated trade data
from Directorate General of Commercial
Intelligence and Statistics (DGCI&S) are
used to complement the production
data. It, perhaps, is a first-of-its-kind at-
tempt to combine trade and industry data
sets—the latter spread across registered
and unregistered sectors.
Despite their complementarity, one of
the challenges in merging the data sets is
the divergences in the survey design and
questionnaires of ASI and NSS data sets.
This is understandable, considering the
Value of Products and By-products in Fixed Capital in Current Prices ( ` crore)
Current Prices (` crore)
Registered Unregistered Total Registered Unregistered Total
136 1,580 1,716 24 104 128
667 380 1,047 128 177 304
436 406 842 198 325 523
1290 398 1,688 393 233 626
vol lViii no 18
COMMENTARY
stark differences in the size and scale of
units in the two surveys. Moreover, while
the reference period for the ASI is the
financial year or account year of the
factory, the NSS surveys use a 30-day
reference period5 for most of the collected
data except for items such as net addi-
tions to fixed assets, number of months
operated, and number of other economic
activities taken up.6
To make the data comparable, the 30-
day reference period is multiplied by the
number of months operated. The other
divergence is in how the data for fixed
capital is calculated. The ASI follows the
book value method, while the NSS uses
fixed capital values at market price.
Hence, the valuation of fixed assets is
likely to be higher by the market value
method and can be considered as a high-
er estimate when compared to the book
value method. We further combine the
production data with the trade data
from the United Nations (UN) COMTRADE
and DGCI&S of HS Codes 9503, 9504, and
9505 which match with the National In-
dustrial Classification (NIC) 2008 classi-
fication code of 3240 (Code 3694 in NIC
1998 and NIC 2004).
If the preceding methodology is suita-
ble for the purpose, it offers an empirical
framework for conducting studies of
similarly fragmented industries. To that
extent, this study makes a methodological
contribution to undertaking industry and
trade analysis at a disaggregated level.
Findings
Toy production trends and structural
change: In 2015–16 (the latest available
figures for the organised and unorgan-
ised sectors combined), the toy industry
consisted of about 15,000 enterprises or
establishments, producing goods (value
of output) worth `1,688 crore using fixed
capital of `626 crore at current prices,
employing 35,000 workers. Registered
factories accounted for 1% of the total
number of factories and enterprises, em-
ployed 20% of workers, used 63% of fixed
capital, and produced 77% of the value
of output (Table 1).7
In real terms, however, the value of
output shrunk by half during the 15-year
period: from `1,716 crore in 2000–01 to
21
COMMENTARY

Figure 1: International Trade in Toys (` crore) Figure 2: Average Productivity Growth in Toy Sector, 2014–19
3,000 15
10
2,500 5

1FSDFOUBHF
2,000 0
-5
1,500
-10
1,000 -15

Vietnam

Sweden
Philippines
Bulgaria

Nam
Latvia
Cyprus
Croatia

Poland
Mexico

Sri Lanka
Czechia
Belgium

Finland
Colombia

Kazakhstan

Slovakia
Romania

Portugal
Ukraine

Hungary
Slovenia

Austria
Italy
Germany

France

Spain

Brazil

Türkiye
Uzbekistan

India

Greece
of America
States

Bosnia and Herzegovina

500

Viet

United
0

2014o15
1998o99

2000o01
2001o02
2002o03
2003o04
2004o05
2005o06
2006o07
2007o08
2008o09
2009o10
2010o11
2011o12
2012o13
2013o14

2015o16
2016o17
2017o18
2018o19
2019o20
2020o21
2021o2

United States
1999o00

Toy Fxports-India Toy Jmports-India China is missing in the graph, as the available data was incomplete.
Source: Trade Statistics, Ministry of Commerce and Industry, GoI. Source: INDSTAT 4 2022-ISIC Revision 4, UNIDO.

`861 crore in 2015–16 (Table 2). Employ- which reduced the entry barrier for Table 4: Toy’s Export and Import (at current
prices in ` crore) and Trade Ratios (%)
ment shrank from 59,000 workers to unorganised sector enterprises to expand Year Exports Imports Export/ Import/
35,000 workers during the same period. the scale of production and get into the Production Production
The number of factories/enterprises fell registered or formal sector. Alternatively, 2000–01 66.7 116.4 3.9 6.8
from about 20,800 to 14,800. In other newer enterprises entered the industry 2005–06 115.0 248.5 11.0 23.7
words, toy production is a shrinking in- with the abolition of the entry barriers, 2010–11 161.0 923.6 19.1 109.7
dustry. However, the contraction in do- and establishments in the unorganised 2015–16 824.8 2,373.4 48.9 140.6
Production represents the sum of value of products and by
mestic production is made up of rising sector were edged out, given their lower products of registered and unregistered sectors, using the
imports (as will be shown later). productivity. Hence, the de-reservation ASI and the NSS unorganised manufacturing sector survey
estimates.
However, the industry has moved policy may claim success, but it failed to
towards the registered sector. The expand output and employment and has except during the last three years since
number of registered factories rose from become an import-dependent industry. 2018–19. The rising import-to-domestic
42 in 2000–01 to 151 in 2015–16; fixed production ratio can be squared with
capital went up from `24,00,00,000 to Trends in trade: In 2015–16, toy imports the fact that India’s average productivi-
`3,93,00,00,000, and the value of output were $362.4 million (`2,373 crore), ty growth in the industry is negative
from `1,36,00,00,000 to `12,90,00,00,000 nearly three times the exports at $125.5 compared to most toy-exporting nations
at current prices. Correspondingly, un- million (`825 crore). Imports were higher which witnessed positive labour produc-
organised sector enterprises shrank, than domestic production by 41% at tivity growth (Figure 2).
though in terms of employment—particu- current prices. Understandably, India is a negligible
larly on account of employment in own- In 2000–01, imports were a mere 7% of player in the global toy market, account-
account enterprises—it continues to domestic production. Fifteen years later, ing for a mere 0.25% of global exports in
have a dominant share (Table 3). the ratio shot up to 141% (Table 4). The 2021–22 (Figure 3)—albeit its share has
These structural changes could be as- corresponding export-to-production ra- increased from near zero in 2008.
sociated with the de-reservation policy, tio rose from 4% to 49%. These trends In light of the preceding, we examine
could mean that the import of the policy outcomes. Did the recent pro-
Table 2: Value of Products and By-products and Fixed Capital intermediate inputs and the motional efforts boost exports after 2020?
at Constant 2000–01 Prices
final sales of toys have in- As claimed, India’s toy exports have surged
Year Value of Products and Fixed Capital at Constant
By-products at Constant 2000–01 Prices creased rapidly. These ratios since 2018–19, and imports have declined
2000–01 Prices (` crore) (` crore) are significant as they show sharply. However, import contraction
Registered Unregistered Total Registered Unregistered Total
rising import dependence on appears to be the result of a rise in basic
2000–01 136 1,580 1,716 24 104 128 production and consumption. customs duty on toys (HS Code 9503)—
2005–06 607 346 953 116 161 277 Figure 1 shows trends in from 20% to 60% in February 2020.
2010–11 327 304 631 149 244 392 the toy trade from 1998–99 to Moreover, many non-tariff barriers were
2015–16 658 203 861 200 119 319 2021–22. India’s imports are also imposed such as the imposition of
CPI-IW is used to generate the deflators. growing faster than its exports, production registration orders and safety
regulation codes (Press Information
Table 3: Toy Industry—Employment Statistics Bureau [PIB] release 5 July 2022).8
Year Registered/ Unregistered Total
Organised Sector
Further, during the pandemic, as the
Persons Employed Hired workers (Workers in Registered
(Hired Workers)
Own Account Establishments Total in Establishments Sector+ Persons Employed in Indian economy contracted, naturally,
Enterprises Unregistered Sector) toy imports declined. However, exports
2000–01 2,624 32,529 24,007 56,536 15,045 59,160 did increase somewhat during the pan-
2005–06 8,244 9,027 24,733 33,760 17,557 42,004 demic, as the US toy imports rose sharp-
2010–11 2,495 15,681 22,031 37,712 13,177 40,207 ly, and India’s exports are mainly to the
2015–16 7,016 17,478 10,511 27,989 7,385 35,005 US (as reported in the Hindu data story
22 MAY 6, 2023 vol lViii no 18 EPW Economic & Political Weekly
 COMMENTARY
Figure 3: India’s Share in World Toy Exports Figure 5: Employment and Fixed Capital in Toy Production at Constant
 Prices
250 12

Number of Workers
 200 10

Fixed Capital
8
150
 6
100
1FSDFOUBHF

4
 50 2
0 0

1998o99

2004o05
1999o2000
2000o01
2001o02
2002o03
2003o04

2005o06
2006o07
2007o08
2008o09
2009 o10
2010o11
2011o12
2012o13
2013o14
2014o15
2015o16
2016o17
2017o18
2018o19
2019o20




 Fixed capital ( ` crore in constant 1998–99 prices)

           Number of workers (1,000 workers)

Figure 4: Number of Factories and Value of Output in Toy Sector at Constant Figure 6: Output Per 1,000 Workers and Fixed Capital per 1,000 Workers,
Prices at Constant Prices
1,600 700

Output per 1000 Workers

Fixed Capital per 100 Workers

1 000 200 1,400 600
800 1,200 500
150

No of Factories
1,000 400
600
Output

800
100 600 300
400 200
400
200 50 200 100
0 0
0 0

1998o99
1999o2000
2000o01
2001o02
2002o03
2003o04
2004o05
2005o06
2006o07
2007o08
2008o09
2009o10
2010o11
2011o12
2012o13
2013o14
2014o15
2015o16
2016o17
2017o18
2018 o19
2019o20
1998o99

2017o18
1999o2000
2000o01
2001 o02
2002 o03
2003 o04
2004o05
2005o06
2006 o07
2007 o08
2008 o09
2009 o10
2010o11
2011o12
2012 o13
2013o14
2014 o15
2015o16
2016 o17

2018 o19
2019o20

Output per 1,000 workers (constant 1998–99 prices)

Output (value of products and by-products in ` crore - constant 1998–99 prices)
Number of factories Fixed capital per 1,000 workers (constant 1998–99 prices)

referred to earlier). Hence, the govern-
ment’s claim that the toy trade turned
around is mainly the short-term effect of
rising import barriers. The true success
of the policy can be gauged if domestic
production and investments show sus-
tained improvement.
While tariff and non-tariff barriers
immediately affect import quantities,
policy incentives take a while to augment
supply. Hence one should look at how the
policy framework created by Make in India
since 2014 and the earlier de-reservation
in 1997 may have contributed to augment
investment and output potential. To dis-
cern the longer-term changes in industrial
capabilities, we analyse toy manufactur-
ing in the registered sector. It should pro-
vide a fair representation of the total toy
manufacturing since (as noted earlier) the
industry’s structure has moved towards
the registered sector.
Figure 4 reports the number of regis-
tered factories and the value of output at
constant prices since 1998–99, for two
decades.9 Between 2000–01 and 2007–08,
the number of factories and their output
rose steadily—perhaps showing the
effect of the de-reservation in the late
1990s. However, the upward trend was
not sustained. A cyclical pattern is evi-
dent: a steady rise during 1999–2000 to
Economic & Political Weekly EPW
2007–08, a decline until 2013–14, and a While it is clear that the de-reservation
modest reversal until 2019–20. policy provided a short-lived impetus to
Over the two decades, trends in the the factory sector, the unorganised sector
number of factories and output are closely lost an estimated 7,660 jobs.10 In compari-
associated. Comparing the endpoints, son, only 4,392 jobs were created in the
there is a fair rise in the number of facto- organised sector establishments between
ries but very little positive trend in real 2000 and 2016. This period also witnessed
output growth. Though the policy reforms a marginalisation of own-account enter-
have formalised the industry, they did prises in the unorganised sector, whose
not contribute to sustained output ex- output share fell from 41% to 29%. At the
pansion but resulted in job losses. There same time, they went from accounting for
is practically no growth but considerable 76% to 85% of all unorganised sector en-
yearly investment fluctuation (Figure 5). terprises. In other words, the foregoing
Output and fixed capital per 1,000 changes represent accentuation of the
workers, measured in constant 1998–99 dualism: output is increasingly originating
prices, for the same time period, steadily from the registered sector and employ-
rose until 2012–13 but fell steeply after ment, mostly consisting of self-employed
that and a slight reversal after 2017–18 workers, is concentrated in the unorgan-
(Figure 6). All these long-term trends for ised sector—even as the industry output
the factory sector do not show strengthen- has shrunk.
ing of the toy manufacturing capabilities.
Was the preceding pattern of expansion Discussions of the findings: Two dec-
and its reversal unique to the toy industry? ades is a reasonable duration of time to
Probably not. They are similar to those assess the policy reform. Our data set, first
found in “other manufacturing” (that is, of its kind, uniquely combines produc-
heterogeneous industries), that is, “NIC tion and trade statistics at the four-digit
32.” Thus, it seems reasonable to infer product level. The findings are startling,
that the de-reservation policy had little and the inferences drawn are reasonable.
sustained impact on output and employ- Ignoring the short-term considerations,
ment, contrary to the expectation and the industry/product level analysis raises
early results reported in academic writings interesting and intriguing questions. Both
(Martin et al 2017). the reservation policy under planning and
MAY 6, 2023 vol lViii no 18 23
COMMENTARY
its repeal under the liberal reforms have
failed in equal measure to boost output
and employment in toy industry. Make
in India did not improve the matters.
It is perhaps true that simple reserva-
tion policy promoted rent-seeking by in-
cumbent firms, offering “double protec-
tion”—from international trade as well as
from large-scale domestic producers—
resulting in a sellers’ market. Such a
market structure was undone after liber-
alisation when imports quickly overtook
domestic production. Rising imports
suggest that lack of demand was not the
problem. Supply failed not because of a
lack of protection but perhaps the indus-
try required different, more nuanced
policy support, such as technology, infra-
structure, marketing, and linkages to
foreign markets and brands.
For an industry to become domesti-
cally competitive and grow its access to
external market, more policy support was
needed than mere reservation. Likewise,
mere de-reservation may win many
brownie points among the faithful.
Without carefully tailored policy support
24
to encourage foreign firms to indigenise
production and support domestic enter-
prises, the industry may fail to grow.11
Conclusions
Since 2018–19, India’s toy exports report-
edly turned a corner: net exports have shot
up to much jubilation in the media and
the government. The turnaround is being
showcased as the success of Make in India
and other policy measures. This study
closely examines the toy production and
trade from 1998–99 to examine the
veracity of the trends and explanations.
Surely, the short-term turnaround is
in response to the tripling of tariffs from
20% to 60% and the imposition of non-
tariff barriers. Therefore, a more mean-
ingful question to ask is whether policies,
such as Make in India, augmented domes-
tic capabilities for sustaining the turna-
round noted recently to reduce the chronic
trade deficit that has existed for decades.
Over a longer period, did the abolition of
the much-discredited “reservation” policy
in 1997 for labour-intensive products,
such as toys, augment investment and
MAY 6, 2023
employment to retake the domestic mar-
ket and expand exports?
We examine these propositions using
a new data set created by combing four-
digit product-level trade data with unit-
level production data of factories and
establishments belonging to organised
and unorganised sectors. Such a data set
is needed to realistically assess the poli-
cy reforms in an industry such as toy
production that is spread across regis-
tered and unregistered sectors. The fol-
lowing are the study’s main findings.
The reported turnaround in toy exports
based on two-three years’ data, that too
mostly during the COVID-19 pandemic, is
perhaps premature to claim the policy suc-
cess. The industry facts are stark: toy im-
ports are greater than domestic production
for most years; their net imports have risen
steadily between 1998 and 2015. During
2000–01 and 2015–16, domestic production
shrank by half in real terms. Over the two
decades, toy production and investment in
the factory sector have shown a cyclical
pattern without a discernible positive trend
in output growth, but with job losses.
vol lViii no 18 EPW Economic & Political Weekly

De-reservation of toy manufacturer
policy over two decades ago did lead to
the entry of new firms in registered man-
ufacturing and output expansion, but just
for a few years—with modest improve-
ment in fixed investment—only with
cyclical variations. There is no evidence of
a positive impact of Make in India on
output and employment.
After the abolition of the reservation
policy (or de-reservation, in 1997), the
toy industry got formalised with a rise in
the share of the factory sector. However,
despite the abolition of entry barriers,
unorganised or unregistered sector con-
tinues to have a greater share of estab-
lishments and employment.
Neither reservation policy during the
much-discredited “licence raj” nor its
undoing during much vaunted “econom-
ic liberalisation” made a material differ-
ence to toy industry’s fortunes.
Though minuscule, the industry con-
tinues to have an outsized role in policy
discourse. The study seems to offer
meaningful lessons in policy design.
One should perhaps look beyond the
simplistic binaries—such as state versus
market or planning versus reforms—
and examine the ground reality of in-
dustrial locations and clusters to tailor
the policies to promote labour-intensive
industrialisation (Nagaraj 2021).
Notes
1 In the text, all rupee–dollar conversions re-
ported are at current exchange rates.
2 The exception, in this case, was the ready-
made garment sector, where the existing me-
dium and large firms were allowed to expand
their capacity if they were exporting a mini-
mum of 50% of their production.
3 Registered sector refers to factories registered
under the Factories Act, 1948 employing 10 or
more workers regularly using power. The un-
registered sector refers to workshops employing
less than 10 workers or household/own-account
enterprises employing family labour. In Indian
literature, registered, organised, or formal sectors
are used synonymously. Likewise, unregis-
tered, unorganised or informal sectors are
used synonymously.
4 These are the Unorganised Manufacturing En-
terprise Surveys for 2000–01 and 2005–06 and
the Unincorporated Non-Agricultural Enter-
prise Surveys for 2010–11 and 2015–16.
5 The Unorganised Manufacturing Enterprise
Survey for 2005–06 is unique as it collects
data using a 30-day and one-year reference peri-
od. The one-year reference period is used
when the data for a unit is collected from its
book of accounts.
6 This is necessary as very few unorganised sector
units maintain a book of accounts. In 2015–16,
Economic & Political Weekly EPW MAY 6, 2023
COMMENTARY
only 5.68% of the units in the manufacturing India,” Journal of Law and Economics, Vol 57,
sector reported maintaining a book of accounts. No 4, pp 897–936.
7 While organised toy manufacturing is mostly Business Standard (2022): “World’s Play Store: India
in Rajasthan, unorganised manufacturing is Scripts a Local Toy Story,” 13 December.
concentrated in West Bengal (maps not reported Cross, G and G Smits (2005): “Japan, the US and the
for brevity). Globalization of Children’s Consumer Culture,”
8 For instance, government has brought imported Journal of Social History, pp 873–90.
toys under compulsory Bureau of Industrial Safety
(BIS) standards, a non-tariff barrier. See https:// Garcia-Santana, Manuel and Josep Pijoan-Mas
alephindia.in/bis-certificate-for-toys.php. (2014): “The Reservation Laws in India and the
9 Value added is surely a better measure of do- Misallocation of Production Factors,” Journal
mestic production. However, since trade data is of Monetary Economics, Vol 66, pp 193–209.
available in terms of the value of output, we Government of India (1997): “Report of the Expert
have sought to maintain consistency by report- Committee on Small Enterprises,” Department
ing domestic production in terms of output of Small Scale Industries, Agro and Rural
value measured by the value of products and Industries, New Delhi.
by-products. However, domestic production is Hindu (2023): “India’s Toy Exports Surge But Still 200
also reported at constant prices. Times Smaller Than China’s,” Data Story, 5
10 The unorganised sector units can be catego- January, https://www.thehindu.com/news/na-
rised as own-account enterprises and establish-
ments. Own-account enterprises are run with-
tional/data-indias-toy-exports-surge-but-still-200-
times-smaller-than-chinas/article66338667.ece.
out hiring workers regularly, while establish-
Lockwood, William (1974): Economic Development
ments hire at least one worker fairly regularly.
11 The government has approved 19 toy clusters
of Japan: Growth and Structural Change, New
to promote traditional toys under the Scheme Jersey: Princeton University Press.
of the Fund for Regeneration of Traditional Martin, Leslie A, Shanthi Nataraj and Ann E Harri-
Industries (SFURTI) but only provided assis- son (2017): “In with the Big, Out with the
tance of `55.65 crore. The cluster development Small: Removing Small-scale Reservations in
approach is worth mentioning but the focus India,” American Economic Review, Vol 107,
should also be on developing sub-contracting No 2, pp 354–86.
capacities for foreign firms that set up bases in Mohan, Rakesh (2002): “Small-Scale Industry Policy
India, particularly to supply domestic markets. in India: A Critical Evaluation,” Economic Policy
A structure along the lines of automotive in- Reforms and the Indian Economy, Anne O Krue-
dustries could be the way to go (Keiretsu system).
ger (ed), Chicago: University of Chicago Press.
Nagaraj, R (2021): Industrialisation for Employ-
References ment and Growth in India: Lessons from Small
Alfaro, Laura and Anusha Chari (2014): “Deregula- Firm Clusters and Beyond (eds), Delhi: Cam-
tion, Misallocation, and Size: Evidence from bridge University Press.
N EPWRF India Time Series
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vol lViii no 18 25
BOOK REVIEW
Quest for Development and
Challenges in Bangladesh
Sujay Ghosh
T
his ambitious work intends to
bring three apparently different
themes under a broad frame-
work: development, neo-liberalism, and
Islamic politics. The author, a young
scholar associated with the Universi-
ties of British Columbia and Toronto at
different points of his career, develops
the book out of his doctoral thesis.
Overall, the book is divided into seven
chapters, including the introduction
and conclusion. The work begins with
a brief introduction of the concepts
and presents an overview of Bangla-
desh’s class structure, particularly the
socio-economic formation of elites.
Chapter 2, “Development, Political
Economy, and Neoliberalism,” begins
with a brief but crisp survey of the evolu-
tion of liberal thinking in political econ-
omy since early capitalism, through the
Bretton Woods Conference of 1944 to
the present times. Very succinctly, it
traces the emergence of neoliberalism as
a dominant economic and policymaking
paradigm at contemporary times, with
proactive roles by organisations such as
the World Bank. He also explains the
failure of neoliberalism in developing
countries. In tune with these arguments,
the author presents a diagram (p 27),
depicting the architecture of aid-flow in
developing countries across the world.
With diagrams and figures, a book can
reach the readers rather easily, because
the complex phenomena and arguments
are explained in brief and neat formats.
However, despite the chapter being well-
referenced, the author fails to mention
the experiences of successful econo-
mies of Southeast Asia under neo-liberal
capitalism and also why the dominant
counter-paradigms to neo-liberalism,
such as socialism and mixed economy
have, by and large, been proved unsuc-
cessful in developing countries. A nu-
anced discussion on this issue would
have enriched the work significantly.
32
Development, Neoliberalism, and Islamism in
South Asia: The Case of Bangladesh by Mustahid
M Husain, Cham, Switzerland: Palgrave Macmillan, 2022;
pp xvii + 146, ¤117.69 (eBook).
Chapter 3, “Neoliberalism, Class Struc-
tures and Politics of Development in
Bangladesh,” introduces us to a socio-
political history of Bangladesh since its
inception in 1971. It vividly depicts the
composition of the elite class, mainly
drawn from the political, military, and
bureaucratic circles; and also records the
transition of Bangladeshi economy from
a mild pro-socialist to a liberalised regime
in the 1980s. The author’s rather appar-
ent uncritical acceptance of certain in-
fluential writers’ implicitly derogatory
views on the newly rich class, which
has acquired the status of middle class,
is, however, problematic. He should have
offered a critique of such strong value-
laden characterisations. Otherwise, the
chapter is rich in offering the various
dimensions of the socio-economic class
structure of Bangladesh. In addition,
this chapter locates the emergence of
increasing religiosity in Bangladesh’s
sociopolitical discourse and practices.
The funding from the Gulf countries,
especially Saudi Arabia, has accelerated
the process: these countries are seen as
benefactors, particularly when they offer
employment opportunities on their soil.
Such opportunities are desperately needed
by the underprivileged section of the
population. In addition, the remittance
money forms the backbone of Bangla-
deshi economy. This is the background
of rising Islamism in Bangladesh. Finally,
the author ends the chapter with a brief,
but extremely useful, discussion on the
political causes of poverty.
Chapter 4, “Neoliberalism, Infrastruc-
ture and Philosophical Poverty” is par-
tially based on field studies. I shall discuss
the shortcomings first, because we should
not lose sight of the valuable contributions
may 6, 2023
and potential of this chapter. First, the
author studies the cases of the Bangladesh
Road Transport Authority (BRTA) and the
political economy of higher education
sector. However, the rationale is not clearly
explained in the beginning, nor are the
linkages established clearly and the author
rambles from one case to another rather
abruptly. In the main text, we find the ra-
tionale for the selection of BRTA: it should
have appeared earlier. Also, the author
does not mention the time period when the
field study was conducted. As a young
scholar, the author needs to realise the
necessity for a methodologically informed
and coherent work. Such a work is valued
for many reasons: the study rests upon
clearly established scientific and empirical
foundations. In addition, readers benefit
by learning the essential details of the ap-
plication of methodology, which are some-
times overlooked during our methodology
coursework; or when we read the texts on
methodology.
Second, the title promises some in-
tensive theoretical engagement, but the
content is quite inadequate to match that
expectation. The theoretical framework
had to be explained in the beginning,
but it is referred to passingly in the main
text. For example, the following sen-
tence is explained inadequately: “a dis-
juncture between moral philosophy and
the blind application of right-wing eco-
nomic prescriptions in Bangladesh’s
higher education sector” (p 67). Third,
while outlining the crises in Bangla-
desh’s privately offered higher education
sector, the author uses terms like “rick-
shaw faculty” (p 74) and “zombie gradu-
ates” (p 78). Of course, the situation is
alarming, but these terms appear quite
derogatory—the ill-paid, over-worked
teachers who rush from one university
to the nearby another in cycle rickshaws,
for earning a decent livelihood; or the
students who are offered poor quality of
education—are also the helpless victims
of circumstances. Once again, as a young
scholar, the author needs to choose the
words and terms carefully, because in
social sciences, every word matters.
Finally, the book promises to establish a
relationship bet ween neo-liberal capital-
ism and politically motivated religious
mobilisation, but in the present form, it
vol lViii no 18 EPW Economic & Political Weekly

is, at best, implicit. The relationship needs
to be established much more clearly and
explicitly. In the present form, it appears
like an account of social and political his-
tory of contemporary Bangladesh, where
Islamic religiosity and economic neoliber-
alism appear to coincide in a given time
frame. The elite classes are identified as
being the beneficiaries.
These visible lacunae, however, must
not blur our vision from many positive
inputs. The author does a meticulous study
of BRTA and points out the vicious cycle
of patronage, corruption, and inefficiency,
which unnecessarily escalates the cost
for the end users—the common citizens,
most of who are from under-privileged
backgrounds. He uses both political
and anthropological methodology. The
way Mustahid M Husain interprets a tel-
ephonic conversation between an appar-
ently corrupt official and his son, pre-
sumably settled abroad, is truly exem-
plary. This can only happen by having a
sound familiarity with the field. Next, he
points out in detail the political economy
of privatised higher education in Bangla-
desh, where the influential people, drawn
mostly from political and military back-
grounds, own and sustain a perverse
system marked by low quality, high cost
and exploitation. Sadly, the students are
largely socialised to flaunt the glamour
of expensive private education, often
used as a means for credit transfer to enter
universities in the affluent countries of
Europe, North America, and Australia.
This stands in stark contrast to some of
the public-funded universities, which
offer relatively affordable and a reason-
ably good standard of education.
I hope that the author would use the
material presented in this chapter with
greater rigour, for building up more sub-
stantial contributions. Though implicit,
at least two important lessons are readi-
ly available. One, financial aid decided
by global agencies like the World Bank
would have limited impact, unless seri-
ous political and structural reforms are
initiated. Two, these examples debunk
the long-standing myth that private par-
ticipation enhances the quality of goods
and services. The book clearly points out
that privatisation does not necessarily
mean that end users would be provided
Economic & Political Weekly EPW may 6, 2023
BOOK REVIEW
with a superior value for their invest- valuable. We have to, a certain extent,
ments. The larger sociocultural and politi- depend on the evidences that are availa-
cal context must be considered. ble, however inadequate. Yet, if reason-
Chapter 5, “Neoliberalism, Islam and ably credible and persuasive, such initia-
Intolerance” is also well-written. It locates tives would provoke us to think about
the growth of Islamism in Bangladesh these issues that may initiate further
in the broader socio-historical context. research and enquiry in the long run.
However, this chapter could have been The shortcomings of the book have
richer had the author based it on a field been discussed earlier. In a nutshell, it
study. The way some radical clerics try requires a better organising; for example,
to mobilise common people with aggres- a clearly demarcated concluding section
sive and inciting speeches in public is missing in many chapters. The book is
meetings are often portrayed both in the quite well referenced, refers to the
mainstream and social media. This phe- works of some leading theorists in the
nomenon needs to be studied in detail. field, but reference to the seminal schol-
In Chapter 6, “Neoliberalism and the arship of Ayesha Jalal and Maidul Islam
Political Economy of Bangladesh Mili- would have added to its value. In addi-
tary,” Husain candidly informs us about tion, careful copy-editing was neces-
the problems of obtaining field data from sary, to avoid a few mistakes that looked
ex-military officials, but his bold effort awkward. I hope the author continues
of venturing beyond the established doing research in this field because this
framework of civilian–military relation- is an underexplored phenomenon. He has
ships and addressing the military’s role enough room to build a solid framework,
in Bangladesh’s liberalising political given the ambitious nature of the project.
economy are particularly praiseworthy. In the present form, the book would be
Given the complex sociopolitical cir- a nice introductory reading for students
cumstances and significant opacities in and researchers studying development
public institutions in most of the third studies and South Asia, in general, and
world countries, we cannot expect every Bangladesh, in particular.
claim to be substantiated by solid and
Sujay Ghosh (sujay69@gmail.com) teaches
foolproof evidence, but raising these is- political science at Vidyasagar University,
sues in social science forums are no less Midnapore.
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vol lViii no 18 33
Politics, Poetics and Pedagogy of Hope
Translation, Learning and Refusal
Sneha Gole
H
ungry Translations: Relearning
the World through Radical Vul-
nerability is written by Richa
Nagar, who has been writing and re-
searching on issues of power, position-
ality, knowledge production and pedago-
gy for a long time. It can be a daunting
book to take on, especially for a reader
who has been coached in the certainties
of academic reading, which are geared
towards “making sense” of a book and
contextualising it. But this is a book that
confounds all protocols, all conventions,
and still makes a compelling case for
what feminist theorisation can or should
look like. It is a difficult book to read and
imbibe, precisely because it is written so
simply, almost in the forms of vignettes,
of moments captured while doing poli-
tics and theatre, movement and writing.
This is the great strength, and also an
important methodological intervention
of this work.
Stories, Translations, and Politics
The book is divided into five sections.
Part I called “Staging Stories” lays out
the ideas that animate the book. Here,
Nagar talks about the need for transla-
tion and what makes a translation hun-
gry? She argues that translations would
always be imperfect and assuming that
one can perfectly translate emotions,
politics and subjectivities amounts to
epistemic violence. The acknowledge-
ment of this imperfection is what keeps
the translation hungry, because there is
a continuous need then to grapple with
fluidity. This, for Nagar, is crucial to the
act of radical vulnerability, which can be
built only through relational and collec-
tive engagement. Part II is titled “Move-
ment as Theatre” and tells the stories
from SKMS, a grassroots political organi-
sation. It is largely populated by Dalit
women and men, which sprang out of
30
book reviewS
Hungry Translations: Relearning the World
through Radical Vulnerability by Richa Nagar,
Urbana, Chicago, Springfield: University of Illinois Press,
2019; pp 299, $28.
the conversations that followed the pub-
lication of Sangtin Yatra.1 Central to
many of the questions that this section
raises is the relationship between the
likkhad (the one who can write) and the
sathi (comrade in struggle). Nagar asks,
what does it mean to research and write
with those in struggle and who deter-
mines which stories can be shared or
translated, included and excluded? The
section also centres the issue of the rela-
tionship between the hunger of the body
and the hunger of the soul. It shows how
mainstream ways of producing knowl-
edges often presume hungry bodies as
incapable of producing reflexive acc-
ounts of their own lives and what could
be ways of disrupting these assump-
tions, through the stories of the bodies
in struggle and how they engage in a
complex, reflexive, collective politics.
Part III—Living in Characters—fol-
lows the process by which Premchand’s
famous story Kafan was transformed
into a play, Hansa, Karo Puratan Baat by
Parakh Theatre, through the collective
labour of 20 people coming from diverse
locations in the city of Mumbai. It argues
how embodied praxis involves creativi-
ty, ethics, aesthetics and politics in an
inseparable relationship with each oth-
er. Part IV of the book titled “Stories, Bod-
ies, Movements” shares the syllabus of a
course conducted with students at the
University of Minnesota. This syllabus
was a result of the thinking and rethink-
ing around questions of storytelling. The
final section called “Closing Notes” is a
reflection on the process of learning
may 6, 2023
through the semester-long course, co-
written, along with Nagar, by Siddharth
Bharath and Sara Musaifer. This section
brings together what the process of unl-
earning and relearning meant for the
collective. It offers ways of thinking
about a feminist, decolonial pedagogy
which invites students to be co-travellers,
not just passive recipients making con-
nections with the bodies and stories they
are reading and performing.
Taking Risks:
Radical Vulnerability
It is a book which is much needed. There
has been a lot of well-placed critique of
the discourses of developmentalism and
engagement of scholars and researchers
with those who are seen to be needing
intervention, namely the poor and the
marginalised. These critiques have fo-
cused on the politics of knowledge, of
voice and positionality, of power and
privilege and have constituted a very
important intervention. They have alert-
ed us to the unevenness of power rela-
tions between poor and marginalised
bodies and those researching them.
However, there is a tendency to with-
draw from active engagements with
marginalised communities rather than
push for more open dialogue and con-
versations about how we produce just
and emancipatory knowledge. Instead
of taking the challenges of how we
translate our positionalities into the
knowledge that we make head-on, it has
led to keeping a safe distance from
transnational and border-crossing work
of any kind. Nagar in this book addresses
this impasse, by inviting researchers to
reinvent themselves as co-travellers or
sathis with the people they research, by
being “radically vulnerable.” One of the
moments from the book that moved me
to tears was when Nagar and Mumtaz
practise a scene of dying together; the
intimacy of that scene allows the reader
to understand what Nagar really means
by radical vulnerability.
Nagar argues that bodies which are
hungry, seen to be incapable of producing
reflective, imaginative accounts, often
produce the most unexpected and
vol lViii no 18 EPW Economic & Political Weekly

emancipatory politics, rising above the
penury and helplessness of being impov-
erished. It is therefore an invitation to
share epistemic agency with those we
work with, in producing knowledges
and politics that is just. The decisions
therefore of which stories are to be
included or excluded from the book are
collective decisions, interpretations are
shared and contested and Nagar as the
author does not have ultimate authority
over the text. Even as she is engaged in
the process of translating some of these
experiences and stories for the reader,
there is an awareness of the always par-
tial and incomplete nature of the trans-
lation, with the refusal to translate and
be translated seen to be central to the
act of translation itself. The book thus
presents a politics of refusal, whether
symbolic or material, as central to trans-
formational processes. It poses the ques-
tion of translation as going beyond the
questions of authenticity and transference.
In a world where it is becoming incre-
asingly difficult to hold on to hope and a
politics of transformation, whether due
to fatigue in the face of neo-liberalism
and right-wing resurgence or the push
for profit within educational institu-
tions, this book offers a way of thinking
about what politics and pedagogy can
mean. By bringing together what seem
like disparate worlds of movements, the-
atre, classrooms and drawing on the
connections between them, it allows us
to see how radical acts of refusal, perfor-
mance, advocacy, writing and transla-
tion can allow for a politics that is life-
affirming and transformative, even as it
is exhausting. Humility and radical vul-
nerability then emerge as the mainstays
of this methodology. The strength of the
book is that it does not romanticise col-
lectivity, but rather offers insights into
the difficult and uneven process of form-
ing one, the tensions and contradictions
inherent in it and the always contingent
nature of the process. It does not shy
away from the messiness of actualising
this collectivity, the ways in which inhe-
rently unequal relationships of power in
the real world affect these processes.
That is probably also the book’s main
strength; it is, above all, honest in its
efforts to translate the stories it wants to
Economic & Political Weekly EPW may 6, 2023
BOOK REVIEW
tell, even as they are difficult, treache- As a teacher and student of women’s
rous and messy. and gender studies, I have been deeply
concerned with questions of how we see
Of Relatedness and our pedagogy, research and writing as
Knowledge Production connected to wider questions of social
The book takes an anti-oppositional per- justice, and how can we use the space of
spective, choosing to underline the rela- the academy, knowing fully well its limi-
tedness of individuals, of seeing stories, tations but also its possibilities to be allies
geographies, and histories as intercon- in the true sense to movements directly
nected, of relational networks that bind confronting these questions. Hungry Trans-
us all. So even as it grapples with ques- lations then allows for an engagement
tions of power and privilege, it offers with these questions, not to provide
ways of thinking with interconnected- answers but signal ways of thinking,
ness and through conversations, albeit questioning and doing that will allow us
extremely difficult ones. It does not to chart our own journeys, of trying to
come up with a prescriptive model of be sathis in this neo-liberal, deeply une-
how to do politics, but rather is written qual world, of making new meanings
in a mode of open, reflective thinking. and continuing to unlearn and relearn.
This allows for the reader to travel with
the ideas in the book and see where they Note
can go in their own context, rather than 1 Sangtin Yatra, which literally means the jour-
ney of co-travellers; sangtin a term used to
merely follow a template. In fact, one of denote close comradeship and solidarity bet-
the most important lessons of the book ween women, was the name of the book which
culminated from a process of writing their lives
is that templates take away from the undertaken by nine women in Sitapur district
creative labour required for a transfor- of Uttar Pradesh in 2002. The publication of
this book led to many conversations and con-
mational politics. This is a book that troversies since it raised crucial questions
would be useful to a range of readers— around power and knowledge making, NGOs
and their agendas of women’s empowerment.
for students and researchers interested This was the beginning of the formation of
in social movements, activism, social SKMS—Sangtin Kisan Mazdoor Sanghatan or
the Sangtin farmers and labourers’ organisation.
transformation, as it would be of interest
to those involved in theatre, teaching,
and research. It is an excellent resource Sneha Gole (gole.sneha@gmail.com) teaches
at the Department of Women’s and Gender
for anyone interested in the question
Studies at the Savitribai Phule Pune University.
of pedagogies, collaborative research, She is currently on a Fulbright postdoctoral
ethical knowledge production and cre- fellowship at the Five Colleges Women’s
ating a just world. Studies Research Centre, Amherst, US.
EPW E-books
Select EPW books are now available as e-books in Kindle and iBook (Apple) formats.
The titles are
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vol lViii no 18 31
INSIGHT
Jharkhand’s New Sthaniyata
(Local Resident) Policy
The 1932 Khatiyan, Sociocultural
Fabric, and Land Rights
Dayamani Barla, Varsha Bhagat-Ganguly, Rashmi Katyayan,
Antony Puthumattathil, Lotika Singha
The history of “1932 Khatiyan”
and the debate about “Who can be
a local resident in Jharkhand?” is
traced. In answering this
question, several terms are used
that unfold historical and
contemporary development
paradigms, in-migration flows and
the process of industrialisation,
and political economy, employment
and electoral politics in Jharkhand.
The article also argues that it is
problematic to think in terms of
binaries, when considering
sthaniyata, such as Adivasis versus
Dikus, original settlers versus more
recent in-migrants, and cities built
by industries versus Fifth Schedule
Areas and legal safeguards.
The authors are grateful to Joseph Bara for his
invaluable comments on the discussions and
previous drafts of this article.
Dayamani Barla (dayamanib@gmail.com) is a
social activist and founder of the Adivasi-Mulvasi
Astitva Rakshak Manch, Jharkhand.
Varsha Bhagat-Ganguly (varshaganguly9@gmail.
com) is with the Institute of Law, Nirma
University, Ahmedabad. Rashmi Katyayan
(katyayanrashmi@gmail.com) is a lawyer at the
Civil Court and Jharkhand High Court,
Ranchi. Antony Puthumattathil (pmantony@
gmail.com) is independent researcher, Ranchi,
Jharkhand. Lotika Singha (lsingha@proton.me)
is independent researcher and writer,
Staffordshire, United Kingdom.
34
T
he Forest, Environment and Climate
Change Department of Jharkhand
on its website introduces the state
as, “Jharkhand has a unique relation with
forests since ancient times. The word
‘Jharkhand’ connotes area of land covered
with forests. Therefore, literally as well
as symbolically, Jharkhand is associated
with forests.”1 The state is rich in natural
resources—minerals, forests, waters, flora
and fauna, biodiversity, etc. It has 29.76%
forest cover, spread over 23,721 sq km;
32 indigenous communities classified as
Scheduled Tribes (STs) make up one-fourth
(26%) of the state’s population; 13 dis-
tricts are fully covered and three are
partially covered under the Fifth Sched-
ule Areas (FSAs). A third of Jharkhand’s
population (31.6%) is urban, nearly half
of which is concentrated in four cities—
Bokaro, Dhanbad, Jamshedpur, and
Ranchi (Census 2011).
The Jharkhand Definition of Local
Persons and for Extending the Consequen-
tial Social, Cultural and Other Benefits
Bill, 2022 (henceforth the bill) was passed
on 11 November 2022, by the coalition
government, the Mahagathbandhan,
which includes Jharkhand Mukti Morcha
and Indian National Congress. As per the
bill, a person can claim sthaniyata (local
residence)2 of Jharkhand, if they can link
their ancestry to the “1932 Khatiyan.”
Khatiyan is a record of rights, including
land rights. Although all states have a
specific resident domicile policy that aims
to protect certain interests of local popu-
lations, most of them are not based on a
historical “sense of belonging” in which
land is central to the sociocultural fabric
of the community, although this could
may 6, 2023
underpin the understandings of “local”
for many citizen groups. The new bill
empowers gram sabhas to grant sthaniyata
for landless non-Khatiyanis as per the
Provisions of the Panchayats (Extension
to Scheduled Areas) (PESA) Act, 1996.
The bill has been intensely debated by
different, yet intersecting socio-demo-
graphic categories of Jharkhand (Munda
and Bosu Mullick 2003)—the urban and
rural, Adivasis, Moolvasis3 and Dikus
(in-migrants from different states of India).
Social activists, community-based organi-
sations (CBOs), and civil society organisa-
tions (CSOs) have expressed their opinions
through the media, memoranda and
grey literature.
The Context
Khatiyan is a system of recording com-
munity and private land tenure rights (in-
cluding plot number, area, quality, and
possession of land), simultaneously with
land record-keeping. It derives from the
Chota Nagpur Tenancy Act (CNTA), 1908
and Santal Parganas Settlement Regu-
lation (SPSR), 1872, and was operation-
alised by the British through survey and
settlement operations completed at dif-
ferent time points in parts of Bihar, such as
in Santal Parganas in 1873–1910, and in
the Chota Nagpur region over 1869–1935.
The contentious debate on the question
of sthaniyata in contemporary Jharkhand
is inextricably linked to the historical
and more recent development paradigms
adopted by the state and the subsequent
processes of in-migrant flows and indus-
trialisation, the political economy and
the electoral politics that have favoured
a neo-liberal development approach,
and the resultant public service and pri-
vate employment patterns in Jharkhand4
(Lorduswamy 1997; BIRSA 2002; Munda
and Bosu Mallick 2003). Hence, there
has been an ongoing movement—the
Jharkhand movement—one of the largest
people’s movement in modern history
that not only campaigned for a separate
state for Adivasis and Moolvasis, but also
for a development paradigm that is inclu-
sive of all (Munda and Bosu Mullick 2003;
Pingali 2023). This includes having a just
sthaniyata policy based on 1932 Khatiyan,
vol lViII no 18 EPW Economic & Political Weekly
 INSIGHT

which would enable Jharkhandis to and acceptance of the capitalist develop- To understand this debate, we need
assert their dignity, solidarity, historical ment policy regime. to appreciate the significance of FSAs,
discrimination and marginalisation by Jharkhand’s land laws as historic safe-
those who have in-migrated with the Distinct Land Rights guards for Khatiyani residents. Two signi-
specific purpose of exploiting the state’s On 8 December 2022, Chief Minister ficant legislations—the CNTA and the
natural resources (the outsider-exploiters Hemant Soren embarked on the Khatiyani Santal Parganas Tenancy Act, 1876—
or Dikus). Hence, the attempts of succes- Johar Yatra, reaffirming his government’s contain special provisions for Adivasi
sive governments to bring in a “domicile” commitment to realise the vision that had (STs) and Moolvasi (comprised of Sched-
policy from different perspectives (social led to the formation of the state in 2000 uled Castes [SCs], Backward Castes [BCs]
justice versus political and corporate in- (Bisoiee 2022). The yatra responded to and others) landholders in the FSA s,
terests) has been a point of contention the question, “Who can be a resident of that is, they can sell their land only to
between the Jharkhandis (BIRSA 2002) Jharkhand?” by echoing the answer of another person from these sections, af-
and the Dikus and led to tussles and most Jharkhandis, those who are Khati- ter gaining the deputy commissioner’s
unrest in both the political and public yanis/Khatiyan-holders (almost 90% of permission (Katyayan 2015). Land held
spheres (Sengupta 2014; Venktesh 2016; the population). Why then is the remain- by those “other” Khatiyanis can be
Minj 2022). ing 10% of the population opposing the transferred without permission.
Some major events that were the bill? Is the resistance being expressed only The earliest Khatiyans were derived
turning points in making Jharkhand’s by public figures and political leaders? from the cadastral survey settlements
sthaniyata policy a question of Jharkhandi Table 1: Timeline of Survey Settlements in Jharkhand
identity are: the people’s movement District Pre-cadastral Cadastral* First Second Law under Which the Operation Was
behind the slogan “1932 ka Khatiyan, Survey and (CS) Revisional Revisional Carried On
Bhuinhari (RS) (RRS)
Jharkhand ki pehchan” (Jharkhandi iden- Survey
tity is the “1932 Khatiyan”); Chief Minister Ranchi 1869–80 1902–10 1927–35 1975– Chapter X of Bengal Tenancy Act,
Hemant Soren-led Khatiyani Johar Yatra; Khunti 1869–80 1902–10 1927–35 1975– till 10 November 1908, and
thereafter under Chapters XII to XV
Jharkhand High Court’s scrapping of Simdega 1869–80 1902–10 1927–35 1975– of the Chota Nagpur Tenancy Act,
recent changes to the Jharkhand Staff Gumla 1869–80 1902–10 1927–35 1975– 1908 (Act VI of 1908)
Selection Commission (JSSC) examination Lohardaga 1869–80 1902–10 1927–35 1975–94
for state government jobs, and reprimand Hazaribagh 1908–15 1995– Act VI of 1908
to Rajendra Institute of Medical Sciences Chatra 1908–15 1995– Act VI of 1908
(RIMS) for mentioning “only the citizens Kodarma 1908–15 1995– Act VI of 1908
of Jharkhand can apply” as a criterion Giridih 1908–15 1995– Act VI of 1908
for Class III/IV jobs in their advertise- Ramgarh 1908–15 1995– Act VI of 1908
ment as the court believed that citizen- East Singhbum 1906–11 1934–38 1958–95 Chapter X of Bengal Tenancy Act,
ship is of the country, not a state. (Dhalbhum) till 10 November 1908, and
thereafter under Act VI of 1908
While keeping land rights at the centre,
West Singhbum 1833 1897 1913–19 1958–95 Chota Nagpur Landlord and Tenant
this article traces the history of “1932
(Kolhan) Procedure Act, 1879, Act VIII of
Khatiyan” as used in the sthaniyata 1879 and thereafter Act VI of 1908
movement slogans, and narrates the dif- (Porahat) 1900–07 1928–32 1958–95
ferent perspectives and ensuing criss- Saraikela- 1925–28 1958–95 Chota Nagpur Landlord and Tenant
crossing arguments about “who can be a Kharsawan Procedure Act, 1879, Revisional
Settlement under Act VI of 1908
local resident in Jharkhand.”
(Barabhum) 1907–12 1958–95 Act VI of 1908
The multiple perspectives related to
(Patkum) 1907–12 1958–95 Act VI of 1908
land and underpinning the arguments are
Dhanbad 1918–25 1981– Act VI of 1908
that of a distinct traditional land rights
Bokaro 1918–25 1981– Act VI of 1908
system in Jharkhand’s FSAs and the ques-
Palamu 1896–98 1913–20 1977– Act VI of 1908
tion of Jharkhandi identity as a local
Garhwa 1896–98 1913–20 1977– Act VI of 1908
resident based on “sense of belonging.”
The emphasis on land rights is also Latehar 1896–98 1913–20 1976– Act VI of 1908

anchored to the question of social justice. Sahebganj 1898–1910 1976– Santal Parganas Settlement
Regulation, 1872 and Santal
The article further argues that the pro- Dumka 1873–79 1976–
Parganas Rent Regulation, 1886,
cesses of development and industriali- Pakur 1888–94 1976– Santal Parganas Tenancy
sation affect traditional Adivasi and (Supplementary Provisions) Act,
Jamtara 1888–94 1976– 1949
Moolvasi cultures and ethos and there-
Godda 1873–79 1976–
fore the mixed responses of these com-
Deoghar 1898–1910 1976–
munities are seen in the form of self- *Cadastre is a Latin word meaning “to register.”
assertion and rejection, and assimilation Source: Adapted from Survey Settlement Table, Jharkhand Land Manual (2015: 266).

Economic & Political Weekly EPW may 6, 2023 vol lViII no 18 35

INSIGHT
conducted in the Santal Parganas in
1873–1910, and in the Chota Nagpur re-
gion in 1869–1935. Revisional survey
settlements were done between 1927 and
1935 only in the Chota Nagpur region.
Post 1947, another round of revisional
settlements was initiated but only com-
pleted in some districts (Table 1, p 35).
Upadhya (2009) includes a detailed ac-
count of manipulations in the revisional
surveys in Singhbhum in 1958–65 and
Lohardaga in 1994, which enabled the
state to appropriate common lands.
More recently, some districts have seen
digitisation of land records, but these
are considered less reliable.
The use of “1932 Khatiyan” in the move-
ment’s slogans is thus significant on two
counts. First, the pre-1947 Khatiyans are
considered more reliable compared with
the more recent ones, and second, the
three parts of the Khatiyan recognise
communitarian rights, and “resource
rights” in a distinct manner (Table 2).
Table 2: Parts of a Khatiyan
Khatiyan Part 1 Khatiyan Part 2
Record of the order of Record of communitarian/
rights of the raiyat for each customary rights in the name of
plot of land the village
The parts of the Khatiyan have been listed in tabular form for convenience. See also Upadhya (2005: 4435).
In Part 1 of the Khatiyan, column 2
records the name of the raiyat (cultiva-
tor of the land), and column 17, the re-
marks column, lists all the trees on the
land with the popular saying phal phul
bakbke kul mauja, lakdi bakabje malik,
which means the fruits and flowers of
these trees are possessions of the entire
village, only the timber is the posses-
sion of the named landowner.5 This
dynamic understanding of land-based
communitarian and resource rights of
the Adivasi–Moolvasi communities are
enshrined in the legislations and opera-
tionalised in the Khatiyan. While tradi-
tionally inheritance passes through the
male line in Adivasis, many female
names appear in the Khatiyans, parti-
cularly unmarried women and widows.
The Communist Party of India (Marxist)
state secretary G K Bakshi has noted
that “the historical background and
land-laws of Jharkhand are distinctly
different from other states.”6
A counter-question then arises about
the non-Adivasi–Moolvasi communities of
36
Jharkhand. When the British introduced
the concept of private property and the
“rule of law,” dominant-caste people from
Bihar, Uttar Pradesh, and Bengal used the
opportunity to become “named” land-
owners. The Adivasis, whose land records
were represented by their burial stones,
found their lands usurped and “their
traditions and habitats pushed to the
periphery” (BIRSA 2004; Hebbar 2003).
With these developments alongside in-
creasing in-migration, the meaning of the
term Diku, which etymologically stands
for “the other people” shifted to specifi-
cally imply “outsider-exploiter” (Munda
and Bosu Mullick 2003: vii; Sengupta
1982), the dikkat dene vaale (Hindi) out-
siders implying those giving trouble for
Adivasi–Moolvasi communities’ tradi-
tional, sustainable Khatiyani way of life.
Post the 1950s, various development pro-
jects and industries encouraged employ-
ment of people from outside Bihar, and
for whom townships were developed by
Khatiyan Part 3 the Village Note
Record of the intricate details of the
administrative history, customary usage
and practices of a village
the government and the industries. These
highly educated, urbanised, technology
savvy, and economically well-off in-
migrants started dominating Jharkhand’s
economy, bureaucracy, and polity.
Thus, today, Dikus include such em-
ployees as well as industrialists, traders
and merchants, and bureaucrats who came
to the state primarily to acquire its material
resources through advancing industriali-
sation and mining, occupy influential
administrative posts, and placed power
in the hands of those who share the ideo-
logy of the wealth aggrandisement over
sustainable living for all (Lorduswamy
1997; Munda and Bosu Mullick 2003;
Puthumattathil 2014: 218; Sengupta 1982,
2014). They settled by buying land and
housing mostly in the urban areas of
Jharkhand, which was sanctioned by
the ruling political party that has been
maintaining the hegemony of the Dikus.
For example, private development project
employees who are given accommodation
by the company during their tenure after
retirement may purchase land outside of
may 6, 2023
the land leased by the company to settle
permanently, but these purchases can
flout the provisions of the CNTA and SPTA
as explained earlier.
A pertinent illustration of hostility be-
tween the Dikus and the Adivasi–Moolvasi
Jharkhandis is the political upheaval
that resulted in the resignation of the
first chief minister, Babulal Marandi, of
the Bharatiya Janata Party (BJP). Marandi,
an Adivasi himself, brought in a local
resident policy in 2001, which replicated
the 1982 circular of the Bihar government
that linked local resident status in Bihar
to the last land survey at the district level.
Jharkhandi Adivasis and Moolvasis wel-
comed Marandi’s policy as it linked
sthaniyata with the land records, but
Dikus (more recent settlers/in-migrants,
primarily people from Bihar and Bengal)
mostly opposed because it entailed that
they would not be able to avail certain
state benefits that are only meant for the
sthaniya people; for instance, the eligi-
bility to apply for Classes III/IV public
service jobs. Violent clashes followed
this event. Marandi resigned following a
constitutional bench striking down the
notification after hearing a public interest
litigation (PIL) filed in the high court
against the policy.7
In 2014, BJP’s Raghubar Das, Jharkhand’s
first non-Adivasi chief minister, originally
hailing from Chhattisgarh, announced
another “domicile policy,” which stated
that
those who have been living in Jharkhand
in pursuance of their business or jobs and
have acquired immovable assets in the
last 30 years (1985), or their children, would
be considered local residents of the state.
(Pandey 2016)
Furthermore, the employees of the
Jharkhand government or state-controlled
institutions, or other such entities and their
children, were also eligible for domicile.
This policy was reviewed and revised by
the current Hemant Soren government.
Veteran political observer, Manthan, in a
recent interview, explained that alongside
the practice of declaring all seats in the
state public services as open seats, Das’s
policy notification reduced employment
opportunities for “the sons/daughters
of the soil,” that is, the local Adivasis
and Moolvasis (Vimarsh News 2022).
vol lViII no 18 EPW Economic & Political Weekly

Dikus have often had better educational
opportunities or were purposefully re-
cruited by disregarding rules (Singh 1994;
cited in Sengupta 2014: 25). Also, colonies
for employees were set up on the acquired
lands and as people retired, they were
able to “buy” their properties, which was
not what the Adivasis had intended when
giving up their land (Sengupta 1982).
Das’s policy aimed to protect the interests
of the middle and elite classes employed
by the development project authorities
and the administration, and who were
more likely to support his government’s
policies for economic growth through
industrialisation.
Agrarian Struggles and Sthaniyata
The Jharkhandi Adivasi–Moolvasi demand
to use a record of land tenure rights from
the British era as the basis for determin-
ing sthaniyata today may seem paradox-
ical; this stance, however, elaborates a
social justice perspective.
The Adivasi struggle against the British
and post-1947 Indian state–corporate
nexus is mainly for resource rights that are
intricately bound to the traditional socio-
cultural fabric of their lives (Hoffmann
and Lister 1904), and has a long and
distinguished history in the Jharkhand
region. The state was a part of the Chota
Nagpur plateau, which was adminis-
tered by the British colonial government
from Bengal. The earliest Adivasi agrarian
movement in the modern history of the
region was led by Tilka Manjhi in the
Santal Parganas in 1784. It culminated in
the Kol Vidroh (Kol Insurrection) of 1831–
32, with categorisation of the Jharkhand
region as a “non-regulation province,”
that is, legislations proposed for the en-
tire province would not apply here unless
they were agreeable to the people of this
region. These collective struggles com-
pelled the British to draft Wilkinson’s
Rules (1833) and the first record of
rights, the hukuknama8 recognising the
communitarian agrarian rights and local
self-governance of the Adivasis. Such
recognitions were followed by continu-
ous agrarian movements, which were
contained by the British by re-categoris-
ing Jharkhand in 1874 as a “scheduled
district,” then as “backward tract” in
1919, and “partially excluded area” in
Economic & Political Weekly EPW may 6, 2023
1935, alongside the enactment of more
land laws. The Chota Nagpur (Chutia
Nagpur) Tenures Act, 1869, SPSR, 1872,
and Chota Nagpur Landlord and Tenant
Procedure Act, 1879 were passed. Follow-
ing Birsa Munda’s Ulgulan9 of 1874–1901,
the British passed the CNTA, 1908 for the
Chota Nagpur region, and post 1947, the
Santal Parganas Tenancy Act (SPTA),
1949 was passed for the Santal Parganas
(Bara 2022; Katyayan 2015; Singh 2019;
Sundar 2005, 2009).
Post 1947, Jharkhand became a part
of Bihar, when states were recognised on
the basis of language. Several predomi-
nantly Adivasi districts of Bengal, Orissa,
and Madhya Pradesh were separated
from the Jharkhand region with the
intention that the Adivasis population
remained less than the total population
of these states as well as for the redistri-
bution of the rich natural resources
and mineral belt, rain forests and water
resources of the Chota Nagpur plateau
area across different states for economic
reasons.10 In 1950, the Constitution of
the newly formed India inscribed the
demand by the Adivasi peoples for self-
governance and continuance of communi-
tarian rights by re-designating “partially
excluded areas” and “excluded areas” as
special legislative zones: the Fifth and
Sixth Schedule Areas of the Indian Con-
stitution (Katyayan 2015; Sundar 2009).
The more recent people’s struggles against
the state-corporate model of so-called
development, including the 2017 Pathal-
gadi movement and the current ongoing
resistance against implementation of the
Survey of Villages Abadi and Mapping
with Improvised Technology in Village
Areas (SVAMTIVA) Yojana, draw strongly
on Adivasi–Moolvasi identity question as
well as self-governance (Khatiyan-Jameen
Bachao Sangharsh Morcha 2022; Khabar
Aaj Ki 2022). The SVAMITVA Yojana is
the union government’s “one nation,
one software” scheme claiming to end
conflicts over land by ensuring conclu-
sive titling of residential (abadi) land in
rural areas, which will be recorded on a
plastic “property card.” However, field
observations in Khunti district revealed
that drone mapping was also being
done of non-abadi land and flouting of
the government’s standard operating
vol lViII no 18
INSIGHT
procedure for implementing the scheme,
and the process, as of now, remains halted
in Jharkhand. Land policy and legislation
experts and the experiences in other states
also highlight several concerns around
the scheme, including wrongly recorded
names of title holders (Property Rights
Research Consortium 2020; Rupavath
2021; Thara 2022).
One of the central arguments in the
people’s struggles is that the CNTA and
SPTA, the PESA and the Schedules Tribes
and Other Traditional Forest Dwellers
(Recognition of Forest Rights) Act, 2006
(also known as the Forest Rights Act
[FRA]) represent the state’s response to
Adivasi demands to protect the values
of and to ethically develop the socio-
cultural-economic fabric (taana baana)
of Jharkhandi communitarian life, both
of which are closely connected with the
judicious use and preservation of natural
resources—jal, jangal, jamin (waters,
forests, lands).11 This is reflected in the
Mundari saying, “Sen-ge susun, kaji-ge
durang,” which means “to walk is to
dance and to speak is to sing.” It implies
life is to be celebrated and enjoyed in
joyful freedom.
The digital Adhikar Abhilekh (Records
of Rights [RoR]) uploaded into the recent
online land record system under the Na-
tional Land Records Modernisation Pro-
gramme (NLRMP), 2008 and Digital In-
dia Land Records Modernisation Pro-
gramme (DILRMP), 2014 also reveal that
each digital land record is turning revenue
land into a private property regime,
overlooking the traditional/Khatiyani
system of recording community land
tenure rights granted under the CNTA.
Our experience in the field, interac-
tions with villagers in Khunti district of
Jharkhand since the SVAMITVA Yojana
property card scheme was introduced in
2020, and examination of the digital land
records and litigation work in court-
rooms has revealed several discrepancies
between the digital Adhikar Abhilekh and
the paper Khatiyan. Incorrect entries
were found for khata or plot number, the
acreage, and names and tribes/castes
of the owners of the land have been
changed or ignored. Villagers have been
running from pillar to post to have the
online records corrected and updated
37
INSIGHT
but to no avail. They are also unable to
pay relevant taxes online because the
land is now under someone else’s name.
Since Khatiyan Part 2 is not yet digit-
ised, it is feared that community rights
will eventually become non-existent,
which is a real question of social justice.
In areas where pre-1947 Khatiyans are
not available or do not exist, the last
Khatiyan, however recent, will be used
for purposes of determining sthaniyata.
Singh (2020: 183) notes that
[I]n the absence of literary traditions, the
Adivasi communities normally seek legiti-
macy from the [British] colonial documents,
where their customs and traditions are re-
corded in various documents.
Compared to other Khatiyans, most
Jharkhandis consider the Khatiyans from
around “1932” more trustworthy than
those from after 1947. This is because
the British survey settlements were more
meticulous and reflected the ground re-
ality than post-1947 attempts, including
revisions.12 For example, many discrep-
ancies have been noted, particularly in
connection with connection with the
common lands which were recorded as
government lands, in the revisional set-
tlement surveys done in Singhbum and
Loherdarga (Upadhaya 2005; Vasan 2005).
More recently, in Latehar, the govern-
ment ordered a revision of the revisional
survey settlement under Section 98 of the
CNTA owing to irregularities in that survey
(Government of Jharkhand 2019).13
In sum, the digitisation of land records
reduces the record of rights to simply
a land record of a private property, thus,
separating and not recognising the re-
source rights regime in a holistic, cohe-
sive manner that is jal, jangal jamin, all
together. Such development policy deci-
sions and paradigms can bring Khatiyanis
at loggerheads with each other, for exam-
ple, in matters of accuracy of the online
records, employment of the Khatiyanis
and non-Khatiyanis as well as original
settlers versus in-migrants in Jharkhand.
Moreover, the process of digitisation also
creates ambiguities regarding different
categories and types of land; some are
covered under government programmes,
some as policy enforcement, and some
have been enforced under legislation.
For instance, forestlands under the
38
FRA, 2006; revenue land under DILRMP;
commons/common property resources
or public lands are covered sometimes
under “government land.”14
A Singh’s (2019: 28, 2020) observation
on the 2017 Pathalgadi movement as a site
of deep linkages between the “political,
ethnic and ecological” can be applied more
broadly to contemporary land struggles
in Jharkhand, and also to the question
of Jharkhandi identity, sthaniyata, and
social justice today, although not ahis-
torically. The linkages are not immuta-
ble, they are open to negotiations with
the contemporary world in which the
Adivasis are located and seek benefits,
however, not at the cost of the taana
baana of Jharkhandi village life and
destruction of the environment. Hence,
while demanding a sthaniyata policy as
has been done in other Indian states, the
Adivasi concern about the exploitative
use of jal, jangal and jamin underlies the
emphasis on legalisation of Jharkhandi
sthaniyata through the medium of land
tenure rights, which in turn are enshrined
in the CNTA and SPTA and operational-
ised through the survey settlement and
its documentary evidence, the Khatiyan.
The recognition of the symbolic “1932
Khatiyan” in the bill of 2022 is thus not
paradoxical but in line with the enduring
legal pluralism that is characteristic of
the Indian subcontinent (Sundar 2009).
The concept of sthaniyata thus merges the
different social, demographic categories,
which Singh (2009) calls a strategy of
“double deployment” to counter the vulne-
rability imposed on Adivasis–Moolvasis
by the lack of appropriate implementa-
tion of those very laws by the British and
Indian pro-capitalist/pro-corporate state
(Munda and Bosu Mullick 2003).
Social and Legal Pluralism
Some social activists and CSOs upheld
the slogan “Battees [1932] ka Khatiyan,
Jharkhand ki Pehchan” after the passing of
the 2022 bill. Many expressed their con-
cerns around Adivasis’ linking sthaniyata
and identity of Jharkhandis to land
records and rights, especially the “1932
Khatiyan.” They noted that “domicile”
connotes a “sense of belonging” to a
place that is grounded in historical inter-
generational association with land and
may 6, 2023
forests as a source of livelihood as well
as a place of shelter, and the place-based
culture that this relation nurtured.
The drafting of FRA, 2006 and its
implementation in Jharkhand is a unique
episode in Indian history. Four different
categories from the FRA, 2006 legislation
are distinctly applied here: STs, OTFDs
(Other Traditional Forest Dwellers), forest
rights on individual and community bases,
and recognition of forest rights. The
term “Khatiyani” not only includes all
four categories, but also conveys multiple
meanings, such as different castes and
communities; forest dwellers’ enjoying
land rights; rights to fruits and flowers on
the trees and shrubs (minor forest pro-
duce); separate rights to timber as well as
non-timber products; and rights to nat-
ural resources. The OTFDs were settled
in Jharkhand for generations. Largely,
Moolvasis comprise the category of OTFDs,
they are Khatiyanis, the traditional land-
holders, and include persons belonging
to SCs, BCs, and those from the other
general categories. By ensuring the
embedding of communitarian rights
into the colonial notion of “rule of law,”
Adivasis and Moolvasis can simultane-
ously draw on both tradition and modern
legal instruments.
The Road Ahead
After the bill 2022 was passed, among
the different viewpoints presented, Dikus
and various political parties and opposi-
tion members of Jharkhand’s state legisla-
tive assembly opposed it. They argued
that Das’s policy in 2016 was more inclu-
sive; they favoured the rights of Dikus
as well as natural resource based indus-
trialisation and economic growth vis-à-vis
social and legal pluralism-based rights
of Khatiyanis. The BJP members claimed
that the bill is essentially a political
move to cover the government’s short-
falls in other areas of governance (Prabhat
Khabar 2022). Another view is that
the reference to 1932 Khatiyan in the
policy will be problematic for the signi-
ficant numbers of long-term resident
non-Khatiyanis living in the scheduled
areas or non-scheduled areas of the
state; for example, Dhanbad. Also, the
state government has the authority to
pass an indisputably effective sthaniyata
vol lViII no 18 EPW Economic & Political Weekly

policy. Hence, it is not necessary to ask
for inclusion of the bill in the Ninth
Schedule of the Constitution, as has been
done so by Soren.15 There was also been
pushback in the government’s attempts
to restrict eligibility in employment to
local residents; for example, in Decem-
ber 2022, the state’s own high court
struck down the new rule to limit appli-
cations from out-of-state individuals be-
longing to the “open category” for the
JSSC entrance examination for certain
state service jobs.16
Mahato (2022) opines that some social
activists, CBOs and CSOs have favoured
the state’s decision to request parlia-
mentary assent for including the 2022
bill in the Ninth Schedule to ensure its
longevity. There is historical precedence
here as the domicile policy of Andhra
Pradesh and Telangana are included in
Article 371D of the Constitution, and are
thus exempt from judicial review. Yet,
at the time of writing, the governor,
Ramesh Bias of the BJP, had returned
the bill for reconsideration on the basis
that it violates constitutional norms of
nationwide equality in employment oppor-
tunities (Kant 2023). The return of the bill
by the governor is exclaimed by many
Jharkhandis, as they see the governor
as a custodian of the scheduled areas,
and the state; implying a guardian of
Adivasis and a politically neutral person.
Jharkhandis had welcomed passing
the bill on the same day as the CNTA was
passed in 1908 (Kiro 2022). Many of
them feel that until now, a disregard for
sthaniyata has been key to control
Jharkhand’s lands and rich natural re-
sources by outsider-exploiters. In return,
the strategy of linking identity and land
rights records to sthaniyata is key to
taking back that control. This linkage
between sthaniyata and land record of
rights is not a reductive relationship
between humans and nature. Rather, it
symbolises how Jharkhandi languages
and existential identity (bhasha and
astitva), culture and development are
linked to a knowledgeable and judicious
use of natural resources (BIRSA 2002;
Singh 2019; Khatiyan-Jameen Bachao
Sangharsh Morcha 2022). As custodians of
the FSAs, governors have a duty to ensure
that “development” is inclusive of Adivasi
Economic & Political Weekly EPW may 6, 2023
interests and the bill is a step in that di-
rection. With livelihoods based on jal,
jangal, jamin declining, increasing reserva-
tions for local people in Classes III/IV
jobs was seen as favourable for Adivasi
and Moolvasi Jharkhandis.
In all, the struggle for recognition of
Jharkhandi sthaniyata is not simply about
the assertion of a cultural identity. It is
tied to the very survival of the demo-
graphics of the region that has over cen-
turies lived there in harmony with na-
ture and natural resources. Without
their constant watch over the state, the
region is in danger of losing more than
what can ever be gained with the kind of
development envisaged by those only in-
terested in plundering what lies beneath
the land.
Notes
1 Forest, Environment and Climate Change
Department, Government of Jharkhand (last
updated 20 January 2023), “Jharkhand For-
ests—At a Glance,” viewed on 17 April 2023,
https://forest.jharkhand.gov.in/Home.aspx.
2 We have specifically used the Hindi word
sthaniyata as used in the Jharkhand movement
and in the bill in Hindi (Jharkhand Sthaniya
Vyaktiyon ki Paribhasha aur Parinami Samaajik,
Sanskritik, aur Anya Labhon ko aise Sthaniya
Vyaktiyon tak vistarit karne ke Vidheyak, 2022)
The English words “domicile” and “residence”
do not convey the meanings embedded in the
“sense of belonging” central to the Jharkhandi
demand for establishing a person’s local status
through land records. Sthaniyata as used for
this purpose conveys historical, intergenera-
tional rootedness and association with a place-
based culture nurtured through a particular
relation with the land, including the historical
struggles of the Adivasi communities to retain
that relation against the attempts by the British
and later the Indian state-corporate nexus to
uproot them.
3 Adivasis are the communities who made the
land habitable with a specific mode of produc-
tion and culture. The Moolvasis are the com-
munities who have a shared history of living
and struggles with Adivasis and other margin-
alised groups, including STs, SCs and Other
Backward Classes.
4 The Adivasis and other marginalised groups
are more likely to live in the rural areas of
Jharkhand (91% for STs and 79% for SCs as per
Census 2011). The literacy level in Jharkhand
was just over half (56%) in 2011, and even low-
er in the rural areas. Rural areas primarily had
an agrarian economy. However, Jharkhand’s
political class still favoured a neo-liberal path
of development—natural resource-intensive
industrialisation and urbanisation, which has
resulted in structural unevenness among dif-
ferent sectors of the economy (Centre for Fiscal
Studies 2021) and negligence of traditional
legal safeguards that were/are intended to
ensure inclusion of Adivasis and Moolvasis in
the post-1947 development paradigms. This
resource-intensive development has affected
stability of the ecological system and liveli-
hoods that have been historically dependent on
vol lViII no 18
INSIGHT
local ecosystems and are rooted in a common
ecological and social consciousness.
5 The saying includes Nagari, Persian, Urdu, and
Sanskrit words and phrases. Resource rights
conveyed through such a mix of languages
communicate that this idea has been a histori-
cal traditional expression on “land” and “land
relationships.”
6 Communist Party of India (Marxist) (nd).
7 Prashant Vidyarthy and Suman Kr v State of
Jharkhand and Ors on 27 November 2002.
8 Hukuk is plural of huk which illustrates that
the demand was for collective land rights in-
stead of an individual right to land.
9 Ulgulan is a Mundari term that indicates “total
revolt,” a religious sociocultural revolution
incorporating political and nation-building
consciousness raising; although the Ulgulan
was initially a “defensive reaction against the
encroachment on tribal rights, it later evolved
into a messianic movement with a strong reviv-
alist character” (Hansdak 2021, np and Singh
2002 quoted in Hansdak 2021).
10 See also Singh (2008) and Pingali (2023).
11 In the Pathalgadi movement, the stone slabs
erected at the boundary of a village to mark the
resting place of the dead were inscribed with
the constitutional provisions.
12 Similar observation is shared Anjana Singh
(2020: 183): “[i]n the absence of literary tradi-
tions, the Adivasi communities normally seek
legitimacy from the [British] colonial documents,
where their customs and traditions are recorded
in various documents.” She has highlighted
linkages between oral tradition, evidence, and
trustworthiness.
13 Department, Notification, Sanchika Sr-02/Bhu
A P Ni (R S) Latehar-31/2018 438 Ni. Ra. Ranchi,
dated 31 September 2019 in the reference section.
Digital land records as available on JharBhoomi
website, https://jharbhoomi.jharkhand.gov.in/.
14 Whenever we look at the discourse on commu-
nitarian rights, one of the similar points is to
link it with the commons/common property
resources (CPRs) is through the Supreme Court’s
judgment on on Jagpal Singh and Others v State
of Punjab and Others (Civil Appeal No 1132 of
2011 @ Special Leave Petition 3109 of 2011), on
28 January 2011.
15 D N Champia, personal communication, Novem-
ber 2022 (a Ho from Kolhan, D N Champia is an
Congress ex-MLA and deputy speaker of Bihar
legislative assembly).
16 Ramesh Hansda and Anr v the State of Jharkhand
and Ors, WP (C) No 3894 of 2021 on 27 Janu-
ary 2022.
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Review of Urban Affairs

February 25, 2023

Incomplete Visions and Riven Realities in the Indian City —Ashima Sood
‘We Must Persevere and Persuade, Not Lose Our Tempers and Shout’: How Women Corporators Experience and —Lalitha Kamath,
Shape the Gendered State under Conditions of Urban Transformation Kanak Rajadhyaksha
Participation through WhatsApp in Urban Waste Management: Citizen–Government Relations and Outcomes in
Mumbai’s Participatory Waste Management Policies —Jennifer Spencer
Planning the Informal: Locating Street Vending in Master Plans Post 2014 —Aravind Unni
Invisible Custodians: A Critical Inquiry into the Continuing Obscurity of Women Waste Pickers at Dhapa Landfill of Kolkata —Shreyasee Dasgupta
Cultural Ecologies of Urban Lakes: The Bathukamma Festival, Caste Associations and Resource Claims in Hyderabad —Pullanna Vidyapogu,
Indivar Jonnalagadda
Community Capital: Socio-spatial Relations in Delhi’s Seelampur E-waste Market —Aakansha Jain,Vinay Gidwani

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40 may 6, 2023 vol lViII no 18 EPW Economic & Political Weekly

SPECIAL ARTICLE
Growing Private Equity Investment
in the Indian NBFC Sector
Analysing Risks
Sanchita Dhingra, Abha Shukla
In the last few years, private equity investment in
non-banking financial companies has increased
considerably. Analysing the investment and deal
patterns for the investments made between 1999 and
2020, it is evident that most of the target companies are
unlisted and most of the investments are un-exited.
Foreign private equity investors largely dominate in the
Indian NBFC space. The typical private equity behaviour
to buy assets at distress prices, working to drive their
value up before exiting, is a serious risk, and the large
private equity money flowing into the NBFC sector has
the potential to cause damage to the financial system,
and therefore requires strict regulation.
Sanchita Dhingra (sanchita.dhingra@gmail.com) is a PhD scholar
and Abha Shukla (abhajshukla@yahoo.co.in) teaches at the
Department of Commerce, Faculty of Commerce and Business Studies,
University of Delhi.
Economic & Political Weekly EPW may 6, 2023 vol lViii no 18
A
non-banking financial company (NBFC) is a company
whose principal business is to conduct financial activities,
including granting loans and advances, and acquiring
shares/stocks/bonds/debentures/securities issued by the govern-
ment or a local authority or other similar marketable securities.
It also includes leasing, hire purchase, insurance business, and
chit business. NBFCs are mandatorily required to register
themselves with the Reserve Bank of India (RBI) and obtain a
license to carry out business (RBI 2017). Currently, the NBFC
sector is the second-most important source of credit in India
after banks. NBFCs play a key role in financial intermediation
and provide niche financing facilities while reaching less-
banked areas of our country.
“Credit intensity, as measured by the ratio of NBFCs’ credit to
Gross Domestic Product (GDP) has been consistently increas-
ing, reaching its highest level in 2018–19 at a value of 12.2
before moderating in 2019–20 as an impact of the COVID-19”
(RBI 2020: 114–15). NBFCs complement banks in financial inter-
mediation and increase the extent of financial inclusion in our
economy. While NBFCs are experiencing an upward trend in
their credit growth, banks’ credit growth rate has been decel-
erating as a result of various factors that have been creating
stress in the Indian banking sector. In 2020–21, while the cred-
it growth rate of banks stood at 5.4%, the same rate for NBFCs
was 8.8% (RBI 2021a: 2, 41).
A private equity investment involves financing a target com-
pany in exchange of some ownership stake through a privately
negotiated transaction. The goal is to increase the value of
investment and then exit while realising the profit on sale.
Private equity has become a significant investor class in the
Indian financial market. The contribution of private equity
and venture capital sector to the Indian economy has increased
from 0.7% in 2016 to 1.7% of GDP in 2020 (Ernst and Young and
Indian Venture Capital Association 2020: 53). While private
equity is believed to bring a host of benefits for the target com-
pany, including capital infusion, expertise and their business
networks, they are also infamous for the barbarian approach
taken by some of the private equity investors in extracting
wealth from their target companies (Economist 2016). Also,
given the size of private equity investments in India, their style
of investing and the interlinkages among the various seg-
ments of the financial sector, they hold the potential to
adversely impact not only their portfolio companies but also
41
SPECIAL ARTICLE
the systemic stability of the financial markets and the economy
as a whole (Giuzio et al 2020; Jain and Manna 2009).
The interest of private equity firms in the Indian NBFC sector
has been growing over time. “PE [private equity] funds invested
about $2 billion in NBFCs in 2019, which was 50% higher than
the average over the last four years” (Satija and Kalesh 2019).
Also, 2018 saw the highest inflow of private equity money in
the Indian NBFC sector at approximately $2.8 billion (Venture
Intelligence 2023). This seems to be good news for the cash-
starved NBFCs who were experiencing tight liquidity positions,
especially after the Infrastructure Leasing and Financial
Services (IL&FS) episode. Banks that have been major finan-
ciers of NBFCs became more cautious in their lending practices,
owing to mounting bad loans and stressed assets, and there-
fore tried to reduce their exposure to risky lending practices of
NBFCs. Mutual funds also started maintaining a distance from
NBFCs after the problems in this sector came out in the open.
These problems affected the mutual fund industry directly;
for instance, the Franklin Templeton mutual fund, which had
some exposure to Diwan Housing and Finance Limited (DHFL),
a bankrupt NBFC that announced the closure of its six debt
schemes in April 2020 (Adajania 2020). “From a combined ex-
posure of `2.65-lakh crore to corporate debt (bonds and NCDs)
and Commercial Papers (CPs) of NBFCs in July 2018, mutual
funds’ exposure to these instruments fell to `1.33-lakh crore as
of April 2020” (Narayanan 2021). The COVID-19 pandemic has
also added to the stress in the financial sector. Since NBFCs
have become liquidity-starved, private equity seems to have
become quite an important provider of finance to NBFCs.
Concerns Regarding Private Equity
The increased interest of private equity in the NBFC sector is a
cause of concern for two reasons. First, the current dynamics
of NBFC sector: its significance, vulnerability and potential to
endanger the economy. The NBFC sector is currently quite an
important component of the financial sector and of the Indian
economy, with its share in overall financial intermediation at
31% (RBI 2021a: 91). NBFCs are at present quite vulnerable, which
has largely been publicly known after the IL&FS event of 2018.
The vulnerability of this sector is brought out by the fact that
systemically important1 non-deposit taking NBFCs (NBFC-ND-SI),
which are huge and high systemic risk businesses, account for
85.7% of the total assets of the NBFC sector (RBI 2020: 116).
Also, the gross non-performing assets of this sector stood at
5.2% for the year ended March 2020 (RBI 2021c).
This sector is largely intertwined with all the major sectors
of the economy, and especially the Indian banking sector,
which is also quite heavily exposed to NBFCs. These increased
dealings between banks and NBFCs are largely responsible for
an increased level of overall bilateral exposures among the
various interconnected parts of the financial system, as ana-
lysed by RBI in its financial network analysis for the year end-
ing March 2021 (Economic Times 2019b). “NBFCs were the largest
net borrowers of funds from the financial system, with gross
payables of `11.69 lakh crore and gross receivables of `1.86 lakh
crore as at end-March 2021” (RBI 2021a: 68). With NBFCs and
42
housing finance companies (HFCs) being the largest recipients
of funds in the financial system, and banks being the largest
provider of funds to them, there is a huge risk that the failure
of any of the NBFCs/HFCs can cause a solvency shock to banks,
which can further spread through a domino effect via inter-
connected channels of the financial system.
The second reason for our concern with these growing private
equity investments in the NBFC sector is the potentially dan-
gerous and less-regulated style of private equity investments,
which is to exit after making profits from a portfolio company,
without any concern as to the effect of their exit on the health
of the portfolio company. Private equity has got a bad reputation
for adversely affecting the performance of the target compa-
nies, leading to their untimely fall in worst cases (Davis et al
2019). Regulators have actually become much more careful in
dealing with the NBFC sector. For example, on 12 June 2021,
the Securities and Exchange Board of India (SEBI) halted the
Carlyle Group, a global private equity investor’s capital infu-
sion of around `40 billion in Punjab National Bank Housing
Finance for further scrutiny (Laskar 2021).
This study addresses the need for examining the growing
private equity interest in the NBFC sector. We want to bring
attention to the fact that regulators must be more vigilant to
the inflow of private equity money into this significant and
currently vulnerable sector. We use data from Venture Intelli-
gence to examine the nature of private equity investments in
the Indian NBFC sector. We aim to understand the topography
of these deals to check for any alarming warning signals and
the buildup of risks in the Indian NBFC sector. For instance,
Aadhar Housing Finance, an arm of DHFL, received the largest
amount of money in 2019 from foreign private equity investors
in a majority stake sale transaction worth $385 million. Inter-
estingly, later in the same year, DHFL became the first Indian
NBFC to be sent for bankruptcy proceedings by the RBI
(Economic Times 2019a).
The objectives of this paper are as follows: (i) to examine
the pattern and growth of private equity deals in the Indian
NBFC sector; (ii) to explore the nature of these deals in terms of
their attributes like the stage of investment, exit status and
others; (iii) to analyse the geographical focus-based investor
classification and concentration among private equity inves-
tors, and the identity of private equity investors for deals in the
Indian NBFC space; and (iv) to analyse the concentration of pri-
vate equity investments among the target NBFCs and identify
the most-invested target companies in this space.
Exploring Motives
The rising interest of private equity in the stressed NBFC sector
raises several concerns. One is if this increased interest of pri-
vate equity in the NBFC sector is an outcome of the stress in the
sector. Valuable companies may become available at cheap
valuations as a result of stress in a sector and it seems oppor-
tunistic for private equity investors to capitalise on such possi-
bilities by buying such distressed assets at attractive valuations
(Satija and Kalesh 2019). After the occurrence of the IL&FS
event in September 2018, NBFCs faced constrained liquidity as
may 6, 2023 vol lViii no 18 EPW Economic & Political Weekly

their conventional sources of finance, that is, banks and mutual
funds, became more risk-averse. The commercial papers mar-
ket, another important source of finance for NBFCs, declined
by approximately 39% between 2018 and 2020 (Jagdeesh
et al 2020: 38).
This dramatic reduction in the commercial papers as a means
of finance was felt the most in the case of private NBFCs and
HFCs (RBI 2020). Post the IL&FS event, the commercial papers’
rates went up by 1%–1.5% and the other funding sources be-
came more expensive as well, owing to the increased risk of
investing in the NBFC sector (Chaki and Joshi 2018). Many pri-
vate equity investors are known to purchase a stake in dis-
tressed assets when available at cheap valuations. In India’s
case as well, private equity seems to have taken the aftermath
of the IL&FS event as an opportunity to invest in the NBFC sec-
tor. The years 2018 and 2019 saw huge inflows of private equity
money in the NBFC sector (Satija and Kalesh 2019).
Another concern is whether the increasing private equity in-
terest in the NBFC sector is contributing to stress in this sector.
One of the grey areas where private equity is criticised is the
asset stripping practised by private equity investors, which
refers to buying undervalued companies with the objective of
selling them at a profit, which may eventually lead to a healthy
or somewhat distressed company becoming less viable or unvi-
able (Barber and Goold 2007; Wright et al 2009). The possibil-
ity of such consequences can be explained with the help of two
arguments. One, a private equity investor may choose to aban-
don its portfolio companies whenever it seems profitable to
exit from them. This buying to sell can be detrimental to the
target company under consideration and to the entire financial
system, given the extent of interconnectedness within the fi-
nancial system. Two, this easy money available to NBFCs from
private equity may lead to aggressive lending and other risky
business practices. This aggressive attitude of NBFCs is also a
result of their efforts to expand their market, as banks have
become increasingly conservative in their lending owing to
their non-performing assets. So, the concern evident from the
two arguments above is whether the growing interest of pri-
vate equity in the Indian NBFC sector is leading to increased
stress in this sector.
Another area of concern is whether private equity invest-
ments in NBFCs are a means for global private equities to find
their way into sectors where foreign capital is or should be re-
stricted. One reason for growing private equity investments in
the NBFC sector might actually be to circumvent regulations.
While the RBI caps the maximum rate of interest that a local
company can pay on an overseas loan as part of its external
commercial borrowings rules, the rates of interest paid by
such local companies to NBFCs are largely deregulated. In such
a scenario, a foreign private equity can create greater returns
for its investors by routing funds to an Indian company through
NBFCs, rather than that foreign investor directly lending to the
local company. Also, while there are restrictions imposed by
the RBI on companies for the utilisation of the money borrowed
from overseas investors, there are no such restrictions on money
borrowed from NBFC s (RBI 2017; Adhikari 2020). Thus, the
Economic & Political Weekly EPW may 6, 2023 vol lViii no 18
SPECIAL ARTICLE
increased inflow of money from private equity to Indian NBFCs
might be a result of the regulatory framework that is currently
relatively less stringent for NBFCs.
Sample and Data
Data for this paper has been sourced from Venture Intelli-
gence, a leading source of data on mergers and acquisitions,
private equity and venture capital in India. Venture Intelli-
gence reports data on private equity in India from January
1998, while the earliest point of availability of data on our sub-
ject of interest, that is, private equity investments in the Indian
NBFC sector, is January 1999. The data analysis in this paper is
therefore based on the deal data of private equity investments
in the NBFC sector in India since 1999. The set of “private equity in
NBFC” deals were filtered from the entire set of private equity
investments in India.
Sample period: The sample data includes private equity invest-
ments that have taken place in India since 1 January 1999 to
17 December 2020. Since the deal data is continuously updated
by the Venture Intelligence database, the data may differ at dif-
ferent points in time. Hence, fixing a certain cut-off date and
time was required. So, the sample data for this study is private
equity deals in the NBFC space in India between 1 January 1999
and 3 pm of 17 December 2020. There were 555 such deals in the
sample period with an investment of $14,226 million.
Sample selection process: From the total set of private equity
transactions found in the Venture Intelligence database, deals
in the banking and financial services industry (BFSI) were selected
and then out of these BFSI deals, the ones that took place in the
NBFC sector were captured. Venture Intelligence reports data for
41 sectors within the BFSI industry that includes banking, brok-
ing, financial technology, wealth management, NBFC, mutual
funds, leasing, insurance, foreign exchange and others. The NBFC
space is represented by six sectors, including NBFC, microfi-
nance, microfinance (banking), gold loans, leasing and housing
finance. Our sample includes deals from all these six sectors.
Trends in Investments in India
Private equity investments have been increasing quite sharply
after recovering from the global financial crisis of 2008–09.
The Indian private equity–venture capital investments have
witnessed a compound annual growth rate of approximately
19% in the last 10 years (Ernst and Young and Indian Venture
Capital Association 2021: 4). With a purpose of establishing a
perspective on private equity investments in the Indian NBFC
space, and to emphasise its size, this section presents trends in
private equity in India at three levels: (i) total private equity
investments in all sectors taken together, (ii) private equity in
BFSI, and (iii) private equity in the NBFC sector.
Aggregate private equity investments in India: Between 1
January 1999 and 17 December 2020, 10,770 private equity
deals amounting to approximately $255 billion took place.
However, there were very few deals (ranging between 4 and 10
43
SPECIAL ARTICLE
Figure 1: Number of Private Equity Deals and the Amount Invested, Figure 2: Number of Private Equity Deals and the Amount Invested in BFSI,
2005–20 2005–20

112
Amount Invested by Private Equity in BFSI in India
7,000 120

Number of Private Equity Deals in BFSI Industry

1 008

Number Pf Private Equity Deals Jn India

40,000 1,200
Amount Invested by Private Equity in India

982
962
889
35,000 6,000 100

856
1,000

85
79

79
737
30,000

78
5,000

73
656
800 80

69

66
580
25,000

65
572

64
556
551

62
(in $ Nillions)

511

59
(in $
millions)
4,000

36,342.94
36,327.91

35,583.42
453

6,533.14
20,000 600
413

60

48

48
2,513.57 203

4,119.17 340

23,572.50
3,000

39
15,000

4,349.78
400

4,224.64
17,981.52
10,531.52
14,914.11
10,073.29

11,450.66

13,451.99
40

3,389.14
9,435.78
7,494.88

8,548.55

7,470.21

13
10,000 2,000

2,928.68
2,542.03

2,415.07
200

1,176.75

1,331.95
1,120.89
1,007.47
5,000

387.27
878.67

511.96

788.16
927.15
1,000 20
0 0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0 0

2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Year
5PUBM
BNPVOU
JOWFTUFE
CZ
1&
JO
JOEJB
JO

NJMMJPOT


:FBS
5PUBM
OP
PG
1&
EFBMT
JO
JOEJB "NPVOU
JOWFTUFE
CZ
1&
JO
#'4*
JO

NJMMJPOT
NP PG 1&
EFBMT
JO BFSI
Source: Authors’ computations based on data from Venture Intelligence (2023). Source: Same as Figure 1.

Figure 3: Number of Private Equity Deals and the Amount Invested in the
deals each year) in BFSI in the first six years (1999–2004) of NBFC Sector, 2005–20
the overall sample period. These years were therefore excluded 3,000 80

Amount Invested in NBFC Sector by Private

Number of Private Equity Deals in NBFC Sector

71
Equity Investors in India (in $ millions)
from charting and trend analysis. 70
2,500
60

52
Private equity activity in India has been mostly trending

48
2,000
50

46
41
upward in the last 15 years, except for certain downturns

35

34

2,787
1,500 40

31

31
29

29

in India
(Figure 1). While the decline of 2008–09 was an aftermath of

27

25
2,083
30

21
1,000

19
the impact of the global financial crisis in India, the decline of

1,459
1,378
1,298
20

1 178
2012 can be associated with the introduction of the SEBI Alter- 200 6

905
500
10
383

510
126
256
578
369
267
357
native Investment Fund (AIF) Regulations in May 2012 that 0 0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
made the registration of private equity firms mandatory under
Category II of AIFs.2 The drop in 2016–17 was greater in size Year
Amount invested by PE in NBFC sector in India (JO
 millions)

and was largely on account of lower and smaller investments
Number of PE deals in NBFC Sector
in the e-commerce sector relative to the earlier years (Press Trust Source: Same as Figure 1.
of India 2016). Private equity investments continuously increased
from 2017–19 before succumbing to a fall in 2020 as an effect of requirements and also to absorb increasing asset losses and
the overall slump in business activity caused by the COVID-19 other shocks in their loan portfolio. The year 2014 saw some
pandemic. The top two recipient industries of private equity private equity investments in Indian banks, including Ratnakar
money, both in terms of the number of deals and the amount Bank, Kotak Mahindra Bank, Karur Vysya Bank and Dhanlaxmi
invested, are information technology (IT) and information Bank. Banks and other parts of the BFSI industry were also
technology-enabled services (ITES) and BFSI. Of the total amount increasing their asset base around this time and were funding
invested by private equity in India from 1998–2020, IT and the recovery that was taking place in India Inc. While private
ITES received 30% and BFSI received 14%. equity wanted a share of the return of such high return-yielding
investments made by banks and non-banks, the BFSI industry
Private equity investments in BFSI: Figure 2 shows that pri- needed capital to grow and the private equity players were in a
vate equity in BFSI witnessed a sharp rise from 2005–07 before position to provide that capital, along with assuming some risk of
the slump of 2008–09. With the period of recovery that start- the entities in which they invested (Dhankar and Malik 2015).
ed in 2010, it picked up and maintained a steady pace till 2014,
with the exception of the drop in 2012. There was a sharp rise Private equity investments in NBFC: A total of 555 deals took
in this pace from 2015–18. However, the economic contraction place in the NBFC sector in the sample period, involving 190
that started in 2018 created a slump in this market in 2019, and NBFCs and 337 private equity investors/investor combinations.
the pandemic made matters worse by 2020. Both 2019 and 2020 Private equity activity in the Indian NBFC space has been on
are exceptional in nature owing to factors including a global an ascending trend from 2005–10 in terms of the number of
slowdown and the COVID-19 pandemic and, therefore, cannot deals, except for some decrease in 2007 and 2009. After a dull
credibly indicate any reversal of the upward trend in private period of private equity activity between 2012 to 2014, private
equity activity in Indian BFSI. We can safely say that there is a equity investment picked up and consistently increased from
growing interest of private equity investors in this space. 2014 to 2018. The year 2018 witnessed the highest number of
The next phase of growth in private equity investments in deals as well as the largest amount invested. It was also the year
BFSI that started in 2014 could have been a result of the imple- in which the IL&FS episode happened and the Indian NBFC sec-
mentation of Basel III norms with effect from 1 April 2013 that tor developed a negative reputation. In December 2019, DHFL
happened in phases over the years (RBI 2014). As a result of the became the first NBFC to be sent to the National Company Law
new norms, banks needed more equity capital to meet capital Tribunal (NCLT) for insolvency proceedings. On 18 November 2019,
44 may 6, 2023 vol lViii no 18 EPW Economic & Political Weekly

Figure 4: Listing Status of Target Companies in Private Equity Deals in NBFC
Sector, 1999–2020
Distribution in Terms of Number of Companies Distribution in Terms of Number of Deals
Listed
13%
Unlisted
Unlisted 84%
87%
Source: Same as Figure 1.
Figure 5: Exit Status of Private Equity Deals in NBFC Sector, 1999–2020
Distribution in Terms of Number of Companies Distribution in Terms of Number of Deals
Fully Fxited Fully Fxited
14% 16%
Partially Fxited

5% Partially
Fxited
21%
Unexited
81%
Source: Same as Figure 1.
the Ministry of Corporate Affairs issued a notification saying
that NBFCs with an asset size of `5 billion or more can be sent to
the NCLT for proceedings under Section 227 of the Insolvency and
Bankruptcy Code (Ministry of Corporate Affairs 2019: 2).
The huge size of private equity investments in the NBFC sec-
tor points to the risk that such investments might have a poten-
tial to impact the systemic stability of the financial system and,
therefore, must be analysed. In addition to equity markets,
NBFCs have multiple sources of borrowings, including banks,
overseas lenders, commercial papers, public deposits (for de-
posit taking NBFCs), and are permitted to leverage them. “Reg-
ulation allows them to borrow upto 6.5 times their tier-1 capi-
tal” (Business Today 2019). This enables NBFCs to undertake
big lending transactions, which, in case of default, could pose
a danger to the entire financial system and thus necessitate
regulatory attention and investigation.
A significant trend to observe in Figure 3 is that both the
number and the amount of private equity deals peaked in
2018, the year in which a major crisis erupted in the NBFC sec-
tor when the IL&FS defaulted on the payment of its commercial
paper. Although the trend has been downward since then, the
decline in 2019 and 2020 cannot be relied on to indicate a trend
reversal in private equity investments in the NBFC sector, as these
two years are quite abnormal with a global pandemic (2020)
and a global slowdown (2019). Private equity investment in NBFCs
as a percentage of overall private equity activity has stayed in
the range of 8%–10% in terms of the amount invested, and in
the range of 3%–8.5% in terms of the number of deals.
This represents a sizeable share for a particular sector of an
industry. Also, around half of the total private equity invest-
ments in the BFSI take place in the NBFC sector, both in terms
of the number of deals and the amount invested. Thus, we can
Economic & Political Weekly EPW may 6, 2023 vol lViii no 18
SPECIAL ARTICLE
say that the interest of private equity in the NBFC sector in
India has been growing and is currently at a rather high level,
which calls for the need to analyse and prudently regulate
Listed such deals in India.
16%
Deal Attributes
Private equity investors generally do a detailed due diligence
before investing in any company. Therefore, analysing their
choice of companies in the Indian NBFC sector can facilitate
our investigation of their motives. In this section, we look at
certain specific attributes of such private equity deals and of
the invested target companies, in order to better understand
the nature of private equity investment in Indian NBFCs.
Listing status of the target company: Eighty-seven percent of
the companies in terms of number of companies, and 84% of the
companies in terms of number of deals, are unlisted (Figure 4).
Listed companies generally have greater disclosure norms and
are quite strictly regulated, as against the unlisted companies.
This factor might have contributed to a preference among pri-
Unexited
vate equity investors to invest in unlisted companies in the NBFC
63% space. This seems to be in line with the usual style of private eq-
uity investing as well, and is expected from investors who would
not want to be exposed to strict regulations of the government
and SEBI, which apply to listed companies. This lack of proper
disclosure and complete transparency in a large percentage of
private equity deals in the NBFC sector is a matter of concern.
Stage of investment: The database used for the study, Venture
Intelligence, classifies each private equity deal into different
stages of investment,3 including early, late, growth, growth
private equity, buyout, buyout–large, pre-initial public offering
(IPO), private investment in public equity (PIPE) and others. We
found that the distribution of deals is quite even in the late
stage, early stage and growth stage at 25%, 24% and 24%.
Next, PIPE stands at a considerable 18% of the sample deals in
the NBFC sector. The representation of other stages of invest-
ment, including pre-IPO and buyout, is quite small.
Exit status: Exit status here refers to whether the private
equity investor has exited from the particular deal or the tar-
get company being analysed. An investor is said to have exited
if they have disposed off their stake in the target company.
Exit can be complete or partial, depending on whether the en-
tire stake has been sold or a part of it. The exit status is ana-
lysed in two ways here—in terms of the number of target com-
panies and the overall number of deals. Eighty-one percent of
the total number of target NBFCs are un-exited (Figure 5),
which points to a large risk of untimely and sudden exit of
private equity from their target NBFCs.
Target Sectors, Companies and Active Investors
Subsector distribution of private equity investments in the
NBFC sector: Among all the NBFC subsectors in which private
equity invests, microfinance and home loans together account
45
SPECIAL ARTICLE
Figure 6: Subsectors of Private Equity Investment in the NBFC Sector, Figure 7: Investor Classification in NBFC Sector, 1999–2020
1999–2020
Investor Type on the Basis of Geographic Focus
Active Subsectors on the Basis of Number of Companies Invested

Others Co-investment
13% 33% India-dedicated
Microfinance 32%
29%
NBFC (Pthers)
29%

NBFC (Hold Moans)

1%
NBFC (Iome Moans)
14% Foreign
NBFC (Buto Ginance)
3% 35%
NBFC (SME Moans) Source: Same as Figure 1.
NBFC (Donsumer Moans)

7%
4%
Source: Same as Figure 1. hand means an investor without any India-dedicated corpus,
and the co-investment category indicates a syndicate of India-
for more than 40% of the total private equity deals in this dedicated investors and foreign investors. For our sample of
space (Figure 6). 555 private equity deals in the NBFC sector, foreign, co-invest-
ment and India-dedicated investor proportions seem to be dis-
Investor type: Venture Intelligence classifies the private equi- tributed evenly at 35%, 33% and 32%, respectively (Figure 7).
ty investors for every deal on the basis of their geographical A closer look at these investors indicates that even the co-in-
focus into India-dedicated, foreign and co-investment. As the vestment category has a substantial representation of foreign
name suggests, an India-dedicated investor is an investor with private equity funds. Since the India-dedicated investors in-
a dedicated corpus for making investments in India. This in- clude many foreign investors with foreign sources of capital,
vestor is not necessarily an Indian company; in fact, many of and the foreign investors clearly have foreign sources of capi-
them are actually foreign companies with a separate fund ded- tal, we can say that foreign private equity investors are quite
icated for Indian investments. A foreign investor on the other dominant in the Indian NBFC market.
Table 1: Top 10 Private Equity Investors in the NBFC Sector on the Basis of
Amount Invested, 1999–2020 Top 10 investors: The following table reports the top 10 pri-
Rank Investor Amount Invested Time of Investment Exit Status
(in $ Million) vate equity investors/funds on the basis of the total amount
(Number of Deals) invested by them across the sample period in various deals.
1 Kohlberg Kravis 1,062 (1) January 2018 Un-exited Some interesting facts emerged from Table 1. First, the total
Roberts, GIC,
others amount invested by these top 10 investors in the sample period
2 Carlyle 684.04 (3) July 2007, All exited was $4,647 million approximately, which is around 33% of the
January 2008, total amount invested by all private equity investors in this
September 2009
market. Second, it was observed that each of the top 10 investors/
3 Apax Partners 673.6 (11) July 2014–July 2018 9 out, 11
Un-exited investor groups are large foreign entities, including Black-
4 SSG Capital, 401 (1) July 2020 Un-exited stone, Carlyle Group, Warburg Pincus and others. Third, many
Farallon Capital of the large deals in the NBFC sector were made by these
5 Blackstone 385 (1) February 2019 Un-exited investors after 2016 and were un-exited at the end of the sample
6 Warburg Pincus 327.26 (3) October 1993, 1 Exited; period. To corroborate this finding, the top 10 private equity
March 2019, 2 Un-exited
September 2020
Table 2: Top 10 Private Equity Investors in the NBFC Sector—Number of
7 Aion Capital, 300 (1) March 2016 Un-exited Deals, 1999–2020
others Rank Investor Number of Deals
8 Texas Pacific 288.73 (3) September 2005, 1 Un-exited; 1 International Finance Corporation 16
Group Capital September 2008, 2 Fully exited 2 Dia Vikas Capital 15
July 2019
3 Bellwether 13
9 General Atlantic 275.63 (4) November 2016, All un-exited
December 2016, 4 Baring India 12
December 2017, 5 Apax Partners 11
May 2018 6 Sequoia Capital India 11
10 Caisse de Depot 250 (1) March 19 Un-exited 7 Everstone 9
et Placement du 8 Chrys Capital 8
Quebec
9 Lok Capital 8
The figure in parentheses in the column representing the amount invested shows the
corresponding number of individual deals by that particular investor in the sample period. 10 True North 8
Source: Same as Figure 1. Source: Same as Figure 1.

46 may 6, 2023 vol lViii no 18 EPW Economic & Political Weekly

 SPECIAL ARTICLE

investors in the Indian NBFC space were also collated on the times they were invested into, also revealed that each one of
basis of the total number of deals made by them in the sample these target companies was systemically important (Table 4).
period (Table 2, p 46). Table 4: Top 10 NBFC Target Companies on the Basis of Number of Times
It was noticed that out of the top 10 investors, all except for They Received Investment, 1999–2020
Rank Target Company Number of Whether Systemically
two—International Finance Corporation and Apax Part- Times Invested Important
ners—were India-dedicated. However, five out of the eight 1 Manappuram Finance 17 Yes
India-dedicated investors are either a subsidiary of a foreign 2 Arohan Financial Services 14 Yes
company or a member of a foreign group, implying that seven 3 Grameen Koota 11 Yes
out of the top 10 investors have a foreign source of capital. For 4 Ujjivan Financial Services 11 Yes
instance, Dia Vikas Capital is an Indian subsidiary of Oppor- 5 Satin Creditcare Network 10 Yes
tunity International Australia, a global microfinance and 6 Aptus Value Housing Finance India 9 Yes
7 Aye Finance 9 Yes
enterprise development private equity investor engaged in
8 Mahindra & Mahindra Financial 9 Yes
impact investing. This confirms our earlier finding that for-
9 Spandana Sphoorty Financial 9 Yes
eign private equity investors are quite dominant in the Indian 10 Annapurna Microfinance 8 Yes
NBFC market. Total 107
Source: Same as Figure 1.
Most invested target companies: To identify the top 10 investee A preliminary analysis of these top 10 companies revealed
companies, private equity investments made into each of the some interesting facts. For example, Manappuram Finance,
190 target companies across the sample period were collated which has been invested into 17 times in the sample period, has
and aggregated. total borrowings of over `100 billion in India, including an out-
Top 20 target NBFCs, that is, around 10% of the overall sam- standing foreign currency loan from Ratnakar Bank Limited, as
ple of NBFCs considered in this study together got $7,434 mil- reported in its annual report (Manappuram Finance Limited
lion (Table 3), which accounts for more than 50% of the total 2020). An interesting fact about one of the target NBFCs, Aadhar
amount invested by private equity investors in the NBFC sector Housing Finance—fourth-most invested in terms of amount in-
in India in the sample period. It was also found that 15 out of vested—deserves special mention. It was found that DHFL and
these 20 NBFCs, or 75% of the most invested NBFCs, are sys- Wadhawan Global Capital, the promoters of Aadhar Housing
temically important, as verified from the list of SI-NBFCs re- Finance, sold a controlling stake in this NBFC to the global
leased by RBI on 31 May 2021 (RBI 2021b). The top 10 target private equity firm Blackstone in June 2019, and thereafter in
companies identified on the basis of the maximum number of November 2019, DHFL became the first NBFC to be sent for bank-
Table 3: Top 20 NBFC Target Companies on the Basis of Amount Invested, ruptcy proceedings. There are probably many more such stories
1999–2020 about NBFCs and therefore the impact of private equity invest-
Rank Target NBFC Company Total Amount Whether ment on NBFCs must be analysed critically. Also, linkages
Invested Systemically
(in $ million) Important between troubled sectors or companies other than banks and
1 HDFC (mortgage lender) 1,789.9 Yes NBFCs should also be further explored for the possible com-
2 ECL Finance 668 Yes plex interlinkages between them and the resulting risks.
3 Shriram City Union Finance 557.43 Yes, Deposit-
taking SI NBFC Findings and Policy Recommendations
(NBFC-SI-D)
The study of private equity deals in the Indian NBFCs has yield-
4 Aadhar Housing Finance 396.72 No
ed some very important findings, which provide support for
5 DMI Finance 371 Yes
6 GE Capital Services 300 No
our primary policy recommendation of a stronger regulatory
7 Home First Finance Company 281.04 No framework for such deals in India. In this paper, we have
8 L&T Finance Holdings 278.3 Yes raised an important question of whether private equity is fa-
9 Punjab National Bank Housing Finance 275.63 No cilitating the survival of NBFCs in these challenging times, or is
10 Cholamandalam Investment and it feeding them in a way that may lead to their downfall.
Finance Company 263.61 Yes First, there has been a huge sum of money invested by private
11 Magma Fincorp 249.72 Yes equity investors in the last two decades and such investments
12 Manappuram Finance 239.5 Yes have trended upwards since 2015 (except for two abnormal
13 Indostar Capital Finance 238.52 Yes years, 2019 and 2020). The analysis of sample data confirmed
14 Northern Arc Capital 234 Yes
that among all the sectors of the BFSI industry, the NBFC sector
15 Aavas Financiers 223.77 No
received the largest amount of capital infusion from private
16 Five Star Business Finance 220.05 Yes
equity investors. This percentage was the highest at 63% in
17 Ujjivan Financial Services 218.79 Yes
2018. Private equity activity in BFSI, which is the second-most
18 Indiabulls Financial Services 213.21 Yes
19 Grameen Koota 212.28 Yes
invested industry after IT and ITES, has also been increasing
20 Bandhan Financial Services 202.15 Yes since 2014. Out of the overall private equity investments in India
Total 7,433.62 in the sample period, the NBFC sector alone has received
Source: Same as Figure 1 and RBI (2021b). investments in the range of 8%–10%. Second, most of these
Economic & Political Weekly EPW may 6, 2023 vol lViii no 18 47
SPECIAL ARTICLE

deals in the NBFC sector (87%) are made in unlisted compa-
nies, and are roughly distributed across early, late and growth
stages (25%, 24% and 24%). A large percentage of deals (81%)
are un-exited or just partially exited, indicating an enormous
active exposure of private equity in this space.
Third, a large proportion of the private equity investors
making investments in Indian NBFCs are foreign companies,
including big names like Blackstone, KKR, General Atlantic,
Apax Partners and others. Also, some of the more important
and large ticket deals made by these investors have taken place
in the last few years only and are still un-exited. The level of
market concentration in terms of most active investors is quite
high, confirming the strong presence of foreign investors in
this space. One important concern here is that many of these
huge private equity investors make investments from funds
that are unlisted, and therefore, disclosing their sources of capital
is not mandatory for them. For example, if ChrysCapital makes
an investment in Magma Fincorp, an NBFC–ND–SI, through a
Mauritius-based ChrysCapital fund, the ultimate origin of
these funds flowing into Magma (the target NBFC) is unknown.
A lot of money coming into these Indian NBFCs through private
equity is actually coming from unknown sources.
Lastly, with the exception of a few companies, almost all the
NBFC companies that received investments from private equity
are systemically important and have a large asset base, such as
Manappuram Finance, Shriram City Union Finance and HDFC
(mortgage lender). All the above results communicate strong
warning signals and make a convincing case for further inves-
tigation into such deals, and an evaluation of the regulatory
loopholes that need to be plugged.
Conclusions
A crisis situation in the NBFC sector can create severe stress in
the Indian economy as was exhibited during the IL&FS event in
2018. This event led to the Indian government taking control
of this failed NBFC, the mutual fund industry taking a hit, and
also the closure of a few schemes of a particular mutual fund.
In fact, DHFL became the first NBFC to be sent for bankruptcy
proceedings after making the necessary legal amendments for
such bankruptcy. The IL&FS event both highlighted and aggra-
vated the problems of the NBFC sector. NBFCs have been facing
liquidity and solvency troubles and the current pandemic has
made matters worse for their creditors, who are predominantly
banks and mutual funds.
We believe that the risk inherent in this sector because of
both—the nature of its operations and its connectedness with
the other parts of the financial system—has become quite seri-
ous. Indian banks are a significant source of finance for the
Indian NBFCs as per the RBI’s Financial Stability Reports, and
therefore, a depreciation in the NBFC sector can worsen the
crisis in which the Indian banking sector finds itself in, further
creating an adverse domino effect in the economy.
Private equity investors came to the rescue of Indian NBFCs
and have been quite interested in putting money in them.

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48 may 6, 2023 vol lViii no 18 EPW Economic & Political Weekly

 SPECIAL ARTICLE

This growing private equity investment in the NBFC sector
might be preventing the probable collapse of this liquidity-
starved sector. However, given the style of this investment of
buying to sell and the level of interconnectedness in the
financial system, these investors may cause a tsunami in the
Indian financial market if there is a sudden massive exit from
their investments in the NBFC sector. The RBI and other mar-
ket regulators must bring these investments under greater
scrutiny and protect the markets from becoming vulnerable
to this risk.
We conclude that since a large proportion of private equity
investments in NBFCs is made by foreign private equity investors
and are un-exited or partially exited, these investors have a
large active interest in NBFCs and, by implication, NBFCs have a
huge exposure to these foreign investors. Also, most of the tar-
get companies in this space are unlisted and as we know, the
analyst coverage is generally very less for such companies,
making it difficult to source information about their perfor-
mance. In the end, we would like to clearly state that through
this study, we are not making a point against private equity
investors or the fact that they are willing to invest in Indian
NBFCs. Rather, we are highlighting the importance of a more
formal structure and a robust regulatory framework for the
NBFC sector and for such investments in NBFCs.

notes
1 Systemically important NBFCs are “NBFCs whose
asset size is of `500 crore or more as per last
audited balance sheet are considered as sys-
temically important NBFCs. The rationale for
such classification is that the activities of such
NBFCs will have a bearing on the financial sta-
bility of the overall economy” (RBI 2017).
2 Category II AIFs are the residual category of
AIFs, including real estate funds, private equity
funds, funds for distressed assets, etc, as
per the SEBI (Alternative Investment Funds)
Regulations, 2012. These are not permitted to
borrow and create leverage, other than to meet
day-to-day operational requirements.
3 The stage of investment here refers to the stage
at which the target company is operating at the
time of investment. “Growth-PE includes first-
to-fourth round Investments >$20 M into com-
panies <10 years old, or fifth/sixth rounds of
institutional investments into companies <10
years old. Late stage includes investment into
companies that are over 10 years old, or Sev-
enth or later rounds of institutional invest-
ments. PIPE refers to PE investments in publicly
listed companies via preferential allotments/
private placements, or acquisition of shares by
PE firms via the secondary market. And lastly,
acquisition of controlling stake via purchase of
stakes of existing shareholders” (Venture Intel-
ligence 2020: 18).
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No 1, pp 1–21.

Economic & Political Weekly EPW may 6, 2023 vol lViii no 18 49

SPECIAL ARTICLE
Growing Private Equity Investment
in the Indian NBFC Sector
Analysing Risks
Sanchita Dhingra, Abha Shukla
In the last few years, private equity investment in
non-banking financial companies has increased
considerably. Analysing the investment and deal
patterns for the investments made between 1999 and
2020, it is evident that most of the target companies are
unlisted and most of the investments are un-exited.
Foreign private equity investors largely dominate in the
Indian NBFC space. The typical private equity behaviour
to buy assets at distress prices, working to drive their
value up before exiting, is a serious risk, and the large
private equity money flowing into the NBFC sector has
the potential to cause damage to the financial system,
and therefore requires strict regulation.
Sanchita Dhingra (sanchita.dhingra@gmail.com) is a PhD scholar
and Abha Shukla (abhajshukla@yahoo.co.in) teaches at the
Department of Commerce, Faculty of Commerce and Business Studies,
University of Delhi.
Economic & Political Weekly EPW may 6, 2023 vol lViii no 18
A
non-banking financial company (NBFC) is a company
whose principal business is to conduct financial activities,
including granting loans and advances, and acquiring
shares/stocks/bonds/debentures/securities issued by the govern-
ment or a local authority or other similar marketable securities.
It also includes leasing, hire purchase, insurance business, and
chit business. NBFCs are mandatorily required to register
themselves with the Reserve Bank of India (RBI) and obtain a
license to carry out business (RBI 2017). Currently, the NBFC
sector is the second-most important source of credit in India
after banks. NBFCs play a key role in financial intermediation
and provide niche financing facilities while reaching less-
banked areas of our country.
“Credit intensity, as measured by the ratio of NBFCs’ credit to
Gross Domestic Product (GDP) has been consistently increas-
ing, reaching its highest level in 2018–19 at a value of 12.2
before moderating in 2019–20 as an impact of the COVID-19”
(RBI 2020: 114–15). NBFCs complement banks in financial inter-
mediation and increase the extent of financial inclusion in our
economy. While NBFCs are experiencing an upward trend in
their credit growth, banks’ credit growth rate has been decel-
erating as a result of various factors that have been creating
stress in the Indian banking sector. In 2020–21, while the cred-
it growth rate of banks stood at 5.4%, the same rate for NBFCs
was 8.8% (RBI 2021a: 2, 41).
A private equity investment involves financing a target com-
pany in exchange of some ownership stake through a privately
negotiated transaction. The goal is to increase the value of
investment and then exit while realising the profit on sale.
Private equity has become a significant investor class in the
Indian financial market. The contribution of private equity
and venture capital sector to the Indian economy has increased
from 0.7% in 2016 to 1.7% of GDP in 2020 (Ernst and Young and
Indian Venture Capital Association 2020: 53). While private
equity is believed to bring a host of benefits for the target com-
pany, including capital infusion, expertise and their business
networks, they are also infamous for the barbarian approach
taken by some of the private equity investors in extracting
wealth from their target companies (Economist 2016). Also,
given the size of private equity investments in India, their style
of investing and the interlinkages among the various seg-
ments of the financial sector, they hold the potential to
adversely impact not only their portfolio companies but also
41
SPECIAL ARTICLE
the systemic stability of the financial markets and the economy
as a whole (Giuzio et al 2020; Jain and Manna 2009).
The interest of private equity firms in the Indian NBFC sector
has been growing over time. “PE [private equity] funds invested
about $2 billion in NBFCs in 2019, which was 50% higher than
the average over the last four years” (Satija and Kalesh 2019).
Also, 2018 saw the highest inflow of private equity money in
the Indian NBFC sector at approximately $2.8 billion (Venture
Intelligence 2023). This seems to be good news for the cash-
starved NBFCs who were experiencing tight liquidity positions,
especially after the Infrastructure Leasing and Financial
Services (IL&FS) episode. Banks that have been major finan-
ciers of NBFCs became more cautious in their lending practices,
owing to mounting bad loans and stressed assets, and there-
fore tried to reduce their exposure to risky lending practices of
NBFCs. Mutual funds also started maintaining a distance from
NBFCs after the problems in this sector came out in the open.
These problems affected the mutual fund industry directly;
for instance, the Franklin Templeton mutual fund, which had
some exposure to Diwan Housing and Finance Limited (DHFL),
a bankrupt NBFC that announced the closure of its six debt
schemes in April 2020 (Adajania 2020). “From a combined ex-
posure of `2.65-lakh crore to corporate debt (bonds and NCDs)
and Commercial Papers (CPs) of NBFCs in July 2018, mutual
funds’ exposure to these instruments fell to `1.33-lakh crore as
of April 2020” (Narayanan 2021). The COVID-19 pandemic has
also added to the stress in the financial sector. Since NBFCs
have become liquidity-starved, private equity seems to have
become quite an important provider of finance to NBFCs.
Concerns Regarding Private Equity
The increased interest of private equity in the NBFC sector is a
cause of concern for two reasons. First, the current dynamics
of NBFC sector: its significance, vulnerability and potential to
endanger the economy. The NBFC sector is currently quite an
important component of the financial sector and of the Indian
economy, with its share in overall financial intermediation at
31% (RBI 2021a: 91). NBFCs are at present quite vulnerable, which
has largely been publicly known after the IL&FS event of 2018.
The vulnerability of this sector is brought out by the fact that
systemically important1 non-deposit taking NBFCs (NBFC-ND-SI),
which are huge and high systemic risk businesses, account for
85.7% of the total assets of the NBFC sector (RBI 2020: 116).
Also, the gross non-performing assets of this sector stood at
5.2% for the year ended March 2020 (RBI 2021c).
This sector is largely intertwined with all the major sectors
of the economy, and especially the Indian banking sector,
which is also quite heavily exposed to NBFCs. These increased
dealings between banks and NBFCs are largely responsible for
an increased level of overall bilateral exposures among the
various interconnected parts of the financial system, as ana-
lysed by RBI in its financial network analysis for the year end-
ing March 2021 (Economic Times 2019b). “NBFCs were the largest
net borrowers of funds from the financial system, with gross
payables of `11.69 lakh crore and gross receivables of `1.86 lakh
crore as at end-March 2021” (RBI 2021a: 68). With NBFCs and
42
housing finance companies (HFCs) being the largest recipients
of funds in the financial system, and banks being the largest
provider of funds to them, there is a huge risk that the failure
of any of the NBFCs/HFCs can cause a solvency shock to banks,
which can further spread through a domino effect via inter-
connected channels of the financial system.
The second reason for our concern with these growing private
equity investments in the NBFC sector is the potentially dan-
gerous and less-regulated style of private equity investments,
which is to exit after making profits from a portfolio company,
without any concern as to the effect of their exit on the health
of the portfolio company. Private equity has got a bad reputation
for adversely affecting the performance of the target compa-
nies, leading to their untimely fall in worst cases (Davis et al
2019). Regulators have actually become much more careful in
dealing with the NBFC sector. For example, on 12 June 2021,
the Securities and Exchange Board of India (SEBI) halted the
Carlyle Group, a global private equity investor’s capital infu-
sion of around `40 billion in Punjab National Bank Housing
Finance for further scrutiny (Laskar 2021).
This study addresses the need for examining the growing
private equity interest in the NBFC sector. We want to bring
attention to the fact that regulators must be more vigilant to
the inflow of private equity money into this significant and
currently vulnerable sector. We use data from Venture Intelli-
gence to examine the nature of private equity investments in
the Indian NBFC sector. We aim to understand the topography
of these deals to check for any alarming warning signals and
the buildup of risks in the Indian NBFC sector. For instance,
Aadhar Housing Finance, an arm of DHFL, received the largest
amount of money in 2019 from foreign private equity investors
in a majority stake sale transaction worth $385 million. Inter-
estingly, later in the same year, DHFL became the first Indian
NBFC to be sent for bankruptcy proceedings by the RBI
(Economic Times 2019a).
The objectives of this paper are as follows: (i) to examine
the pattern and growth of private equity deals in the Indian
NBFC sector; (ii) to explore the nature of these deals in terms of
their attributes like the stage of investment, exit status and
others; (iii) to analyse the geographical focus-based investor
classification and concentration among private equity inves-
tors, and the identity of private equity investors for deals in the
Indian NBFC space; and (iv) to analyse the concentration of pri-
vate equity investments among the target NBFCs and identify
the most-invested target companies in this space.
Exploring Motives
The rising interest of private equity in the stressed NBFC sector
raises several concerns. One is if this increased interest of pri-
vate equity in the NBFC sector is an outcome of the stress in the
sector. Valuable companies may become available at cheap
valuations as a result of stress in a sector and it seems oppor-
tunistic for private equity investors to capitalise on such possi-
bilities by buying such distressed assets at attractive valuations
(Satija and Kalesh 2019). After the occurrence of the IL&FS
event in September 2018, NBFCs faced constrained liquidity as
may 6, 2023 vol lViii no 18 EPW Economic & Political Weekly

their conventional sources of finance, that is, banks and mutual
funds, became more risk-averse. The commercial papers mar-
ket, another important source of finance for NBFCs, declined
by approximately 39% between 2018 and 2020 (Jagdeesh
et al 2020: 38).
This dramatic reduction in the commercial papers as a means
of finance was felt the most in the case of private NBFCs and
HFCs (RBI 2020). Post the IL&FS event, the commercial papers’
rates went up by 1%–1.5% and the other funding sources be-
came more expensive as well, owing to the increased risk of
investing in the NBFC sector (Chaki and Joshi 2018). Many pri-
vate equity investors are known to purchase a stake in dis-
tressed assets when available at cheap valuations. In India’s
case as well, private equity seems to have taken the aftermath
of the IL&FS event as an opportunity to invest in the NBFC sec-
tor. The years 2018 and 2019 saw huge inflows of private equity
money in the NBFC sector (Satija and Kalesh 2019).
Another concern is whether the increasing private equity in-
terest in the NBFC sector is contributing to stress in this sector.
One of the grey areas where private equity is criticised is the
asset stripping practised by private equity investors, which
refers to buying undervalued companies with the objective of
selling them at a profit, which may eventually lead to a healthy
or somewhat distressed company becoming less viable or unvi-
able (Barber and Goold 2007; Wright et al 2009). The possibil-
ity of such consequences can be explained with the help of two
arguments. One, a private equity investor may choose to aban-
don its portfolio companies whenever it seems profitable to
exit from them. This buying to sell can be detrimental to the
target company under consideration and to the entire financial
system, given the extent of interconnectedness within the fi-
nancial system. Two, this easy money available to NBFCs from
private equity may lead to aggressive lending and other risky
business practices. This aggressive attitude of NBFCs is also a
result of their efforts to expand their market, as banks have
become increasingly conservative in their lending owing to
their non-performing assets. So, the concern evident from the
two arguments above is whether the growing interest of pri-
vate equity in the Indian NBFC sector is leading to increased
stress in this sector.
Another area of concern is whether private equity invest-
ments in NBFCs are a means for global private equities to find
their way into sectors where foreign capital is or should be re-
stricted. One reason for growing private equity investments in
the NBFC sector might actually be to circumvent regulations.
While the RBI caps the maximum rate of interest that a local
company can pay on an overseas loan as part of its external
commercial borrowings rules, the rates of interest paid by
such local companies to NBFCs are largely deregulated. In such
a scenario, a foreign private equity can create greater returns
for its investors by routing funds to an Indian company through
NBFCs, rather than that foreign investor directly lending to the
local company. Also, while there are restrictions imposed by
the RBI on companies for the utilisation of the money borrowed
from overseas investors, there are no such restrictions on money
borrowed from NBFC s (RBI 2017; Adhikari 2020). Thus, the
Economic & Political Weekly EPW may 6, 2023 vol lViii no 18
SPECIAL ARTICLE
increased inflow of money from private equity to Indian NBFCs
might be a result of the regulatory framework that is currently
relatively less stringent for NBFCs.
Sample and Data
Data for this paper has been sourced from Venture Intelli-
gence, a leading source of data on mergers and acquisitions,
private equity and venture capital in India. Venture Intelli-
gence reports data on private equity in India from January
1998, while the earliest point of availability of data on our sub-
ject of interest, that is, private equity investments in the Indian
NBFC sector, is January 1999. The data analysis in this paper is
therefore based on the deal data of private equity investments
in the NBFC sector in India since 1999. The set of “private equity in
NBFC” deals were filtered from the entire set of private equity
investments in India.
Sample period: The sample data includes private equity invest-
ments that have taken place in India since 1 January 1999 to
17 December 2020. Since the deal data is continuously updated
by the Venture Intelligence database, the data may differ at dif-
ferent points in time. Hence, fixing a certain cut-off date and
time was required. So, the sample data for this study is private
equity deals in the NBFC space in India between 1 January 1999
and 3 pm of 17 December 2020. There were 555 such deals in the
sample period with an investment of $14,226 million.
Sample selection process: From the total set of private equity
transactions found in the Venture Intelligence database, deals
in the banking and financial services industry (BFSI) were selected
and then out of these BFSI deals, the ones that took place in the
NBFC sector were captured. Venture Intelligence reports data for
41 sectors within the BFSI industry that includes banking, brok-
ing, financial technology, wealth management, NBFC, mutual
funds, leasing, insurance, foreign exchange and others. The NBFC
space is represented by six sectors, including NBFC, microfi-
nance, microfinance (banking), gold loans, leasing and housing
finance. Our sample includes deals from all these six sectors.
Trends in Investments in India
Private equity investments have been increasing quite sharply
after recovering from the global financial crisis of 2008–09.
The Indian private equity–venture capital investments have
witnessed a compound annual growth rate of approximately
19% in the last 10 years (Ernst and Young and Indian Venture
Capital Association 2021: 4). With a purpose of establishing a
perspective on private equity investments in the Indian NBFC
space, and to emphasise its size, this section presents trends in
private equity in India at three levels: (i) total private equity
investments in all sectors taken together, (ii) private equity in
BFSI, and (iii) private equity in the NBFC sector.
Aggregate private equity investments in India: Between 1
January 1999 and 17 December 2020, 10,770 private equity
deals amounting to approximately $255 billion took place.
However, there were very few deals (ranging between 4 and 10
43
SPECIAL ARTICLE
Figure 1: Number of Private Equity Deals and the Amount Invested, Figure 2: Number of Private Equity Deals and the Amount Invested in BFSI,
2005–20 2005–20

112
Amount Invested by Private Equity in BFSI in India
7,000 120

Number of Private Equity Deals in BFSI Industry

1 008

Number Pf Private Equity Deals Jn India

40,000 1,200
Amount Invested by Private Equity in India

982
962
889
35,000 6,000 100

856
1,000

85
79

79
737
30,000

78
5,000

73
656
800 80

69

66
580
25,000

65
572

64
556
551

62
(in $ Nillions)

511

59
(in $
millions)
4,000

36,342.94
36,327.91

35,583.42
453

6,533.14
20,000 600
413

60

48

48
2,513.57 203

4,119.17 340

23,572.50
3,000

39
15,000

4,349.78
400

4,224.64
17,981.52
10,531.52
14,914.11
10,073.29

11,450.66

13,451.99
40

3,389.14
9,435.78
7,494.88

8,548.55

7,470.21

13
10,000 2,000

2,928.68
2,542.03

2,415.07
200

1,176.75

1,331.95
1,120.89
1,007.47
5,000

387.27
878.67

511.96

788.16
927.15
1,000 20
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5PUBM
OP
PG
1&
EFBMT
JO
JOEJB "NPVOU
JOWFTUFE
CZ
1&
JO
#'4*
JO

NJMMJPOT
NP PG 1&
EFBMT
JO BFSI
Source: Authors’ computations based on data from Venture Intelligence (2023). Source: Same as Figure 1.

Figure 3: Number of Private Equity Deals and the Amount Invested in the
deals each year) in BFSI in the first six years (1999–2004) of NBFC Sector, 2005–20
the overall sample period. These years were therefore excluded 3,000 80

Amount Invested in NBFC Sector by Private

Number of Private Equity Deals in NBFC Sector

71
Equity Investors in India (in $ millions)
from charting and trend analysis. 70
2,500
60

52
Private equity activity in India has been mostly trending

48
2,000
50

46
41
upward in the last 15 years, except for certain downturns

35

34

2,787
1,500 40

31

31
29

29

in India
(Figure 1). While the decline of 2008–09 was an aftermath of

27

25
2,083
30

21
1,000

19
the impact of the global financial crisis in India, the decline of

1,459
1,378
1,298
20

1 178
2012 can be associated with the introduction of the SEBI Alter- 200 6

905
500
10
383

510
126
256
578
369
267
357
native Investment Fund (AIF) Regulations in May 2012 that 0 0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
made the registration of private equity firms mandatory under
Category II of AIFs.2 The drop in 2016–17 was greater in size Year
Amount invested by PE in NBFC sector in India (JO
 millions)

and was largely on account of lower and smaller investments
Number of PE deals in NBFC Sector
in the e-commerce sector relative to the earlier years (Press Trust Source: Same as Figure 1.
of India 2016). Private equity investments continuously increased
from 2017–19 before succumbing to a fall in 2020 as an effect of requirements and also to absorb increasing asset losses and
the overall slump in business activity caused by the COVID-19 other shocks in their loan portfolio. The year 2014 saw some
pandemic. The top two recipient industries of private equity private equity investments in Indian banks, including Ratnakar
money, both in terms of the number of deals and the amount Bank, Kotak Mahindra Bank, Karur Vysya Bank and Dhanlaxmi
invested, are information technology (IT) and information Bank. Banks and other parts of the BFSI industry were also
technology-enabled services (ITES) and BFSI. Of the total amount increasing their asset base around this time and were funding
invested by private equity in India from 1998–2020, IT and the recovery that was taking place in India Inc. While private
ITES received 30% and BFSI received 14%. equity wanted a share of the return of such high return-yielding
investments made by banks and non-banks, the BFSI industry
Private equity investments in BFSI: Figure 2 shows that pri- needed capital to grow and the private equity players were in a
vate equity in BFSI witnessed a sharp rise from 2005–07 before position to provide that capital, along with assuming some risk of
the slump of 2008–09. With the period of recovery that start- the entities in which they invested (Dhankar and Malik 2015).
ed in 2010, it picked up and maintained a steady pace till 2014,
with the exception of the drop in 2012. There was a sharp rise Private equity investments in NBFC: A total of 555 deals took
in this pace from 2015–18. However, the economic contraction place in the NBFC sector in the sample period, involving 190
that started in 2018 created a slump in this market in 2019, and NBFCs and 337 private equity investors/investor combinations.
the pandemic made matters worse by 2020. Both 2019 and 2020 Private equity activity in the Indian NBFC space has been on
are exceptional in nature owing to factors including a global an ascending trend from 2005–10 in terms of the number of
slowdown and the COVID-19 pandemic and, therefore, cannot deals, except for some decrease in 2007 and 2009. After a dull
credibly indicate any reversal of the upward trend in private period of private equity activity between 2012 to 2014, private
equity activity in Indian BFSI. We can safely say that there is a equity investment picked up and consistently increased from
growing interest of private equity investors in this space. 2014 to 2018. The year 2018 witnessed the highest number of
The next phase of growth in private equity investments in deals as well as the largest amount invested. It was also the year
BFSI that started in 2014 could have been a result of the imple- in which the IL&FS episode happened and the Indian NBFC sec-
mentation of Basel III norms with effect from 1 April 2013 that tor developed a negative reputation. In December 2019, DHFL
happened in phases over the years (RBI 2014). As a result of the became the first NBFC to be sent to the National Company Law
new norms, banks needed more equity capital to meet capital Tribunal (NCLT) for insolvency proceedings. On 18 November 2019,
44 may 6, 2023 vol lViii no 18 EPW Economic & Political Weekly

Figure 4: Listing Status of Target Companies in Private Equity Deals in NBFC
Sector, 1999–2020
Distribution in Terms of Number of Companies Distribution in Terms of Number of Deals
Listed
13%
Unlisted
Unlisted 84%
87%
Source: Same as Figure 1.
Figure 5: Exit Status of Private Equity Deals in NBFC Sector, 1999–2020
Distribution in Terms of Number of Companies Distribution in Terms of Number of Deals
Fully Fxited Fully Fxited
14% 16%
Partially Fxited

5% Partially
Fxited
21%
Unexited
81%
Source: Same as Figure 1.
the Ministry of Corporate Affairs issued a notification saying
that NBFCs with an asset size of `5 billion or more can be sent to
the NCLT for proceedings under Section 227 of the Insolvency and
Bankruptcy Code (Ministry of Corporate Affairs 2019: 2).
The huge size of private equity investments in the NBFC sec-
tor points to the risk that such investments might have a poten-
tial to impact the systemic stability of the financial system and,
therefore, must be analysed. In addition to equity markets,
NBFCs have multiple sources of borrowings, including banks,
overseas lenders, commercial papers, public deposits (for de-
posit taking NBFCs), and are permitted to leverage them. “Reg-
ulation allows them to borrow upto 6.5 times their tier-1 capi-
tal” (Business Today 2019). This enables NBFCs to undertake
big lending transactions, which, in case of default, could pose
a danger to the entire financial system and thus necessitate
regulatory attention and investigation.
A significant trend to observe in Figure 3 is that both the
number and the amount of private equity deals peaked in
2018, the year in which a major crisis erupted in the NBFC sec-
tor when the IL&FS defaulted on the payment of its commercial
paper. Although the trend has been downward since then, the
decline in 2019 and 2020 cannot be relied on to indicate a trend
reversal in private equity investments in the NBFC sector, as these
two years are quite abnormal with a global pandemic (2020)
and a global slowdown (2019). Private equity investment in NBFCs
as a percentage of overall private equity activity has stayed in
the range of 8%–10% in terms of the amount invested, and in
the range of 3%–8.5% in terms of the number of deals.
This represents a sizeable share for a particular sector of an
industry. Also, around half of the total private equity invest-
ments in the BFSI take place in the NBFC sector, both in terms
of the number of deals and the amount invested. Thus, we can
Economic & Political Weekly EPW may 6, 2023 vol lViii no 18
SPECIAL ARTICLE
say that the interest of private equity in the NBFC sector in
India has been growing and is currently at a rather high level,
which calls for the need to analyse and prudently regulate
Listed such deals in India.
16%
Deal Attributes
Private equity investors generally do a detailed due diligence
before investing in any company. Therefore, analysing their
choice of companies in the Indian NBFC sector can facilitate
our investigation of their motives. In this section, we look at
certain specific attributes of such private equity deals and of
the invested target companies, in order to better understand
the nature of private equity investment in Indian NBFCs.
Listing status of the target company: Eighty-seven percent of
the companies in terms of number of companies, and 84% of the
companies in terms of number of deals, are unlisted (Figure 4).
Listed companies generally have greater disclosure norms and
are quite strictly regulated, as against the unlisted companies.
This factor might have contributed to a preference among pri-
Unexited
vate equity investors to invest in unlisted companies in the NBFC
63% space. This seems to be in line with the usual style of private eq-
uity investing as well, and is expected from investors who would
not want to be exposed to strict regulations of the government
and SEBI, which apply to listed companies. This lack of proper
disclosure and complete transparency in a large percentage of
private equity deals in the NBFC sector is a matter of concern.
Stage of investment: The database used for the study, Venture
Intelligence, classifies each private equity deal into different
stages of investment,3 including early, late, growth, growth
private equity, buyout, buyout–large, pre-initial public offering
(IPO), private investment in public equity (PIPE) and others. We
found that the distribution of deals is quite even in the late
stage, early stage and growth stage at 25%, 24% and 24%.
Next, PIPE stands at a considerable 18% of the sample deals in
the NBFC sector. The representation of other stages of invest-
ment, including pre-IPO and buyout, is quite small.
Exit status: Exit status here refers to whether the private
equity investor has exited from the particular deal or the tar-
get company being analysed. An investor is said to have exited
if they have disposed off their stake in the target company.
Exit can be complete or partial, depending on whether the en-
tire stake has been sold or a part of it. The exit status is ana-
lysed in two ways here—in terms of the number of target com-
panies and the overall number of deals. Eighty-one percent of
the total number of target NBFCs are un-exited (Figure 5),
which points to a large risk of untimely and sudden exit of
private equity from their target NBFCs.
Target Sectors, Companies and Active Investors
Subsector distribution of private equity investments in the
NBFC sector: Among all the NBFC subsectors in which private
equity invests, microfinance and home loans together account
45
SPECIAL ARTICLE
Figure 6: Subsectors of Private Equity Investment in the NBFC Sector, Figure 7: Investor Classification in NBFC Sector, 1999–2020
1999–2020
Investor Type on the Basis of Geographic Focus
Active Subsectors on the Basis of Number of Companies Invested

Others Co-investment
13% 33% India-dedicated
Microfinance 32%
29%
NBFC (Pthers)
29%

NBFC (Hold Moans)

1%
NBFC (Iome Moans)
14% Foreign
NBFC (Buto Ginance)
3% 35%
NBFC (SME Moans) Source: Same as Figure 1.
NBFC (Donsumer Moans)

7%
4%
Source: Same as Figure 1. hand means an investor without any India-dedicated corpus,
and the co-investment category indicates a syndicate of India-
for more than 40% of the total private equity deals in this dedicated investors and foreign investors. For our sample of
space (Figure 6). 555 private equity deals in the NBFC sector, foreign, co-invest-
ment and India-dedicated investor proportions seem to be dis-
Investor type: Venture Intelligence classifies the private equi- tributed evenly at 35%, 33% and 32%, respectively (Figure 7).
ty investors for every deal on the basis of their geographical A closer look at these investors indicates that even the co-in-
focus into India-dedicated, foreign and co-investment. As the vestment category has a substantial representation of foreign
name suggests, an India-dedicated investor is an investor with private equity funds. Since the India-dedicated investors in-
a dedicated corpus for making investments in India. This in- clude many foreign investors with foreign sources of capital,
vestor is not necessarily an Indian company; in fact, many of and the foreign investors clearly have foreign sources of capi-
them are actually foreign companies with a separate fund ded- tal, we can say that foreign private equity investors are quite
icated for Indian investments. A foreign investor on the other dominant in the Indian NBFC market.
Table 1: Top 10 Private Equity Investors in the NBFC Sector on the Basis of
Amount Invested, 1999–2020 Top 10 investors: The following table reports the top 10 pri-
Rank Investor Amount Invested Time of Investment Exit Status
(in $ Million) vate equity investors/funds on the basis of the total amount
(Number of Deals) invested by them across the sample period in various deals.
1 Kohlberg Kravis 1,062 (1) January 2018 Un-exited Some interesting facts emerged from Table 1. First, the total
Roberts, GIC,
others amount invested by these top 10 investors in the sample period
2 Carlyle 684.04 (3) July 2007, All exited was $4,647 million approximately, which is around 33% of the
January 2008, total amount invested by all private equity investors in this
September 2009
market. Second, it was observed that each of the top 10 investors/
3 Apax Partners 673.6 (11) July 2014–July 2018 9 out, 11
Un-exited investor groups are large foreign entities, including Black-
4 SSG Capital, 401 (1) July 2020 Un-exited stone, Carlyle Group, Warburg Pincus and others. Third, many
Farallon Capital of the large deals in the NBFC sector were made by these
5 Blackstone 385 (1) February 2019 Un-exited investors after 2016 and were un-exited at the end of the sample
6 Warburg Pincus 327.26 (3) October 1993, 1 Exited; period. To corroborate this finding, the top 10 private equity
March 2019, 2 Un-exited
September 2020
Table 2: Top 10 Private Equity Investors in the NBFC Sector—Number of
7 Aion Capital, 300 (1) March 2016 Un-exited Deals, 1999–2020
others Rank Investor Number of Deals
8 Texas Pacific 288.73 (3) September 2005, 1 Un-exited; 1 International Finance Corporation 16
Group Capital September 2008, 2 Fully exited 2 Dia Vikas Capital 15
July 2019
3 Bellwether 13
9 General Atlantic 275.63 (4) November 2016, All un-exited
December 2016, 4 Baring India 12
December 2017, 5 Apax Partners 11
May 2018 6 Sequoia Capital India 11
10 Caisse de Depot 250 (1) March 19 Un-exited 7 Everstone 9
et Placement du 8 Chrys Capital 8
Quebec
9 Lok Capital 8
The figure in parentheses in the column representing the amount invested shows the
corresponding number of individual deals by that particular investor in the sample period. 10 True North 8
Source: Same as Figure 1. Source: Same as Figure 1.

46 may 6, 2023 vol lViii no 18 EPW Economic & Political Weekly

 SPECIAL ARTICLE

investors in the Indian NBFC space were also collated on the times they were invested into, also revealed that each one of
basis of the total number of deals made by them in the sample these target companies was systemically important (Table 4).
period (Table 2, p 46). Table 4: Top 10 NBFC Target Companies on the Basis of Number of Times
It was noticed that out of the top 10 investors, all except for They Received Investment, 1999–2020
Rank Target Company Number of Whether Systemically
two—International Finance Corporation and Apax Part- Times Invested Important
ners—were India-dedicated. However, five out of the eight 1 Manappuram Finance 17 Yes
India-dedicated investors are either a subsidiary of a foreign 2 Arohan Financial Services 14 Yes
company or a member of a foreign group, implying that seven 3 Grameen Koota 11 Yes
out of the top 10 investors have a foreign source of capital. For 4 Ujjivan Financial Services 11 Yes
instance, Dia Vikas Capital is an Indian subsidiary of Oppor- 5 Satin Creditcare Network 10 Yes
tunity International Australia, a global microfinance and 6 Aptus Value Housing Finance India 9 Yes
7 Aye Finance 9 Yes
enterprise development private equity investor engaged in
8 Mahindra & Mahindra Financial 9 Yes
impact investing. This confirms our earlier finding that for-
9 Spandana Sphoorty Financial 9 Yes
eign private equity investors are quite dominant in the Indian 10 Annapurna Microfinance 8 Yes
NBFC market. Total 107
Source: Same as Figure 1.
Most invested target companies: To identify the top 10 investee A preliminary analysis of these top 10 companies revealed
companies, private equity investments made into each of the some interesting facts. For example, Manappuram Finance,
190 target companies across the sample period were collated which has been invested into 17 times in the sample period, has
and aggregated. total borrowings of over `100 billion in India, including an out-
Top 20 target NBFCs, that is, around 10% of the overall sam- standing foreign currency loan from Ratnakar Bank Limited, as
ple of NBFCs considered in this study together got $7,434 mil- reported in its annual report (Manappuram Finance Limited
lion (Table 3), which accounts for more than 50% of the total 2020). An interesting fact about one of the target NBFCs, Aadhar
amount invested by private equity investors in the NBFC sector Housing Finance—fourth-most invested in terms of amount in-
in India in the sample period. It was also found that 15 out of vested—deserves special mention. It was found that DHFL and
these 20 NBFCs, or 75% of the most invested NBFCs, are sys- Wadhawan Global Capital, the promoters of Aadhar Housing
temically important, as verified from the list of SI-NBFCs re- Finance, sold a controlling stake in this NBFC to the global
leased by RBI on 31 May 2021 (RBI 2021b). The top 10 target private equity firm Blackstone in June 2019, and thereafter in
companies identified on the basis of the maximum number of November 2019, DHFL became the first NBFC to be sent for bank-
Table 3: Top 20 NBFC Target Companies on the Basis of Amount Invested, ruptcy proceedings. There are probably many more such stories
1999–2020 about NBFCs and therefore the impact of private equity invest-
Rank Target NBFC Company Total Amount Whether ment on NBFCs must be analysed critically. Also, linkages
Invested Systemically
(in $ million) Important between troubled sectors or companies other than banks and
1 HDFC (mortgage lender) 1,789.9 Yes NBFCs should also be further explored for the possible com-
2 ECL Finance 668 Yes plex interlinkages between them and the resulting risks.
3 Shriram City Union Finance 557.43 Yes, Deposit-
taking SI NBFC Findings and Policy Recommendations
(NBFC-SI-D)
The study of private equity deals in the Indian NBFCs has yield-
4 Aadhar Housing Finance 396.72 No
ed some very important findings, which provide support for
5 DMI Finance 371 Yes
6 GE Capital Services 300 No
our primary policy recommendation of a stronger regulatory
7 Home First Finance Company 281.04 No framework for such deals in India. In this paper, we have
8 L&T Finance Holdings 278.3 Yes raised an important question of whether private equity is fa-
9 Punjab National Bank Housing Finance 275.63 No cilitating the survival of NBFCs in these challenging times, or is
10 Cholamandalam Investment and it feeding them in a way that may lead to their downfall.
Finance Company 263.61 Yes First, there has been a huge sum of money invested by private
11 Magma Fincorp 249.72 Yes equity investors in the last two decades and such investments
12 Manappuram Finance 239.5 Yes have trended upwards since 2015 (except for two abnormal
13 Indostar Capital Finance 238.52 Yes years, 2019 and 2020). The analysis of sample data confirmed
14 Northern Arc Capital 234 Yes
that among all the sectors of the BFSI industry, the NBFC sector
15 Aavas Financiers 223.77 No
received the largest amount of capital infusion from private
16 Five Star Business Finance 220.05 Yes
equity investors. This percentage was the highest at 63% in
17 Ujjivan Financial Services 218.79 Yes
2018. Private equity activity in BFSI, which is the second-most
18 Indiabulls Financial Services 213.21 Yes
19 Grameen Koota 212.28 Yes
invested industry after IT and ITES, has also been increasing
20 Bandhan Financial Services 202.15 Yes since 2014. Out of the overall private equity investments in India
Total 7,433.62 in the sample period, the NBFC sector alone has received
Source: Same as Figure 1 and RBI (2021b). investments in the range of 8%–10%. Second, most of these
Economic & Political Weekly EPW may 6, 2023 vol lViii no 18 47
SPECIAL ARTICLE

deals in the NBFC sector (87%) are made in unlisted compa-
nies, and are roughly distributed across early, late and growth
stages (25%, 24% and 24%). A large percentage of deals (81%)
are un-exited or just partially exited, indicating an enormous
active exposure of private equity in this space.
Third, a large proportion of the private equity investors
making investments in Indian NBFCs are foreign companies,
including big names like Blackstone, KKR, General Atlantic,
Apax Partners and others. Also, some of the more important
and large ticket deals made by these investors have taken place
in the last few years only and are still un-exited. The level of
market concentration in terms of most active investors is quite
high, confirming the strong presence of foreign investors in
this space. One important concern here is that many of these
huge private equity investors make investments from funds
that are unlisted, and therefore, disclosing their sources of capital
is not mandatory for them. For example, if ChrysCapital makes
an investment in Magma Fincorp, an NBFC–ND–SI, through a
Mauritius-based ChrysCapital fund, the ultimate origin of
these funds flowing into Magma (the target NBFC) is unknown.
A lot of money coming into these Indian NBFCs through private
equity is actually coming from unknown sources.
Lastly, with the exception of a few companies, almost all the
NBFC companies that received investments from private equity
are systemically important and have a large asset base, such as
Manappuram Finance, Shriram City Union Finance and HDFC
(mortgage lender). All the above results communicate strong
warning signals and make a convincing case for further inves-
tigation into such deals, and an evaluation of the regulatory
loopholes that need to be plugged.
Conclusions
A crisis situation in the NBFC sector can create severe stress in
the Indian economy as was exhibited during the IL&FS event in
2018. This event led to the Indian government taking control
of this failed NBFC, the mutual fund industry taking a hit, and
also the closure of a few schemes of a particular mutual fund.
In fact, DHFL became the first NBFC to be sent for bankruptcy
proceedings after making the necessary legal amendments for
such bankruptcy. The IL&FS event both highlighted and aggra-
vated the problems of the NBFC sector. NBFCs have been facing
liquidity and solvency troubles and the current pandemic has
made matters worse for their creditors, who are predominantly
banks and mutual funds.
We believe that the risk inherent in this sector because of
both—the nature of its operations and its connectedness with
the other parts of the financial system—has become quite seri-
ous. Indian banks are a significant source of finance for the
Indian NBFCs as per the RBI’s Financial Stability Reports, and
therefore, a depreciation in the NBFC sector can worsen the
crisis in which the Indian banking sector finds itself in, further
creating an adverse domino effect in the economy.
Private equity investors came to the rescue of Indian NBFCs
and have been quite interested in putting money in them.

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48 may 6, 2023 vol lViii no 18 EPW Economic & Political Weekly

 SPECIAL ARTICLE

This growing private equity investment in the NBFC sector
might be preventing the probable collapse of this liquidity-
starved sector. However, given the style of this investment of
buying to sell and the level of interconnectedness in the
financial system, these investors may cause a tsunami in the
Indian financial market if there is a sudden massive exit from
their investments in the NBFC sector. The RBI and other mar-
ket regulators must bring these investments under greater
scrutiny and protect the markets from becoming vulnerable
to this risk.
We conclude that since a large proportion of private equity
investments in NBFCs is made by foreign private equity investors
and are un-exited or partially exited, these investors have a
large active interest in NBFCs and, by implication, NBFCs have a
huge exposure to these foreign investors. Also, most of the tar-
get companies in this space are unlisted and as we know, the
analyst coverage is generally very less for such companies,
making it difficult to source information about their perfor-
mance. In the end, we would like to clearly state that through
this study, we are not making a point against private equity
investors or the fact that they are willing to invest in Indian
NBFCs. Rather, we are highlighting the importance of a more
formal structure and a robust regulatory framework for the
NBFC sector and for such investments in NBFCs.

notes
1 Systemically important NBFCs are “NBFCs whose
asset size is of `500 crore or more as per last
audited balance sheet are considered as sys-
temically important NBFCs. The rationale for
such classification is that the activities of such
NBFCs will have a bearing on the financial sta-
bility of the overall economy” (RBI 2017).
2 Category II AIFs are the residual category of
AIFs, including real estate funds, private equity
funds, funds for distressed assets, etc, as
per the SEBI (Alternative Investment Funds)
Regulations, 2012. These are not permitted to
borrow and create leverage, other than to meet
day-to-day operational requirements.
3 The stage of investment here refers to the stage
at which the target company is operating at the
time of investment. “Growth-PE includes first-
to-fourth round Investments >$20 M into com-
panies <10 years old, or fifth/sixth rounds of
institutional investments into companies <10
years old. Late stage includes investment into
companies that are over 10 years old, or Sev-
enth or later rounds of institutional invest-
ments. PIPE refers to PE investments in publicly
listed companies via preferential allotments/
private placements, or acquisition of shares by
PE firms via the secondary market. And lastly,
acquisition of controlling stake via purchase of
stakes of existing shareholders” (Venture Intel-
ligence 2020: 18).
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Economic & Political Weekly EPW may 6, 2023 vol lViii no 18 49

SPECIAL ARTICLE
The Story of Land Acquisition in Bhangar, West Bengal
Are Things Changing?
Dhanmanjiri Sathe
One crucial factor among many that led to the victory of
Trinmool Congress in the West Bengal elections in 2011
was the violence associated with land acquisitions in the
period when the Left Front was in power. An attempt is
made to see if any lessons were learnt out of the
Nandigram–Singur episodes. A case study of land
acquisition in the Bhangar area of West Bengal is
presented by putting forth the entire story of what
happened from January 2013 to March 2020. The
intersecting dynamics of local politics, local land mafia,
the rents arising out of land acquisitions, and the
state-level politics are also analysed. It is found that the
villagers are willing to sell their land if they get a “proper”
compensation. It is hypothesised that possibly a
“learning state” is evolving in West Bengal, which could
aid its industrialisation.
The author would like to thank an anonymous referee for making
very insightful suggestions. She would also like to thank the villagers
from Bhangar who shared their opinions and experiences while
doing this fieldwork and later on the phone. She would like to thank
Suraj Das, doctoral candidate at Jadavpur University for providing able
research assistance. The author also thanks Achin Chakraborty, Gautam
Gupta, Priya Sangameswaran, Prachi Deshpande, Maidul Islam, Manush
Ghosh, Tanmoye Chatterjee for their valuable insights. The usual
disclaimer applies.
The author would like to thank CSSH, UPE-II at the Savitribai Phule
Pune University, Pune, which supported this project.
Dhanmanjiri Sathe (dhan.sathe@gmail.com) is senior fellow at
the Gokhale Institute of Politics and Economics, Pune.
58
I
t was a déjà vu moment when one read about the violent
turn to the protests and massive roadblocks against land
acquisition in Bhangar area of South 24 Parganas in
West Bengal on 17 January 2017 (Sweety Kumari 2017). Three
people were reported to have been killed due to police firing
though the police deny opening fire (while doing our field-
work in Bhangar, we were told that actually six people died
in the police firing). The immediate reason for the violence
was the arrest of Sheikh Shamsul Haq, a local leader belonging
to Trinamool Congress (TMC) and also an important member
of Jamin, Jibika, Poribesh O Bastutantra Raksha Committee
(JJPOBRC), an organisation formed to protect land, liveli-
hood, environment and ecosystem by the villagers in Bhangar
area (Bagchi 2017). Torture of locals by the police and
damage of the local mosque and houses has also been
claimed by the people.
On the other hand, police hinted towards the possibility
of “outsiders” and Maoists being involved in the violence.
Many police personnel were also injured and more than half
a dozen police vehicles were either set on fire or thrown in
the pond (Bagchi 2017). It has been claimed that bombs were
hurled by both the sides (Chattopadhyay 2017; Bhattacharya
2018). Other sources claim that 30 police personnel were
injured and 40 police vehicles were destroyed by the mob
(Chattopadhyay 2017). Interestingly, the agitators claim that
along with the police, violence was also started by the local TMC
members. This claim puts in front of us a fascinating aspect
of complexity of local politics, which we will explore below.
Thirty-five km from Kolkata lies the Bhangar area. Bhangar
I and Bhangar II are two tehsils in the district of South 24 Par-
ganas and the district lies to the south-east of Kolkata. The
decision to set up the Rajarhat power grid substation was tak-
en in 2012 on 13.5 acres of land in Bhangar II. The people got
to know of it when they had been “induced” to sell their lands
at below market price. It is in Bhangar II tehsil that unrest has
been happening since late 2013, which got escalated in Octo-
ber 2016 (Ghoshal 2017). As mentioned above, things came to
a headlong collision on 17 January 2017, when residents of
Khamarait, Machhi Bhanga, Tona, and Gaazipur villages,
which fall under the Polerhat gram panchayat in Bhangar II,
protested against land acquisition for the power grid project.
Their population is 3,500, 12,000, 15,000, 4,500, respectively.
While these are the four main villages that would be affected
due to land acquisition, on the whole, there are 12 villages
that would be affected.
may 6, 2023 vol lViii no 18 EPW Economic & Political Weekly

In India, arguably, West Bengal has seen some of the more
controversial land acquisitions like Nandigram and Singur. In
2006, there were extremely violent protests against land ac-
quisition in Nandigram–Singur; and ultimately the Left Front
government which had been continuously in power since 1977
in the state legislature had to backtrack and the acquired land
was given back to the farmers. It is generally believed that
the Left Front government lost power in 2011 due to the many
reasons—and one important being the Nandigram–Singur
agitations. TMC was one of the major agitators and the agita-
tions were politically well-leveraged by the TMC who came to
power in state legislature in 2011.
As the Bhangar agitations were being reported in the print
and electronic media, one was wondering if anything had
changed in West Bengal or had the state and the people got
caught into an unending spiral of violence and brutality.
The purpose of this enquiry is to see when did the process of
land acquisition begin in Bhangar, reasons why the Bhangar
episode happened, who all were responsible for it, could it have
been avoided, and were any lessons learnt from the Nandi-
gram–Singur episodes? Also, what is the situation now? Fur-
ther, more specifically, is there any evidence of a ‘‘learning state’’
as elucidated by Sathe (2017: 201) growing out of this episode?
Bhangar area being quite close to Kolkata (35 km), the winds
of urbanisation and industrialisation had reached Bhangar
even before 2012. As one travels to the said four villages, one
sees that the places have become typically peri-urban. Though
people are doing farming, they have also got integrated with
the close-by Kolkata in many ways with some people having
jobs there, and others visiting Kolkata for different reasons like
education, medical treatment, buying various things, etc. The
agricultural situation is also good in these parts. “The general
economic condition is not poor,” states Gangopadhyay (2017).
The Process of Land Acquisition
The process of land acquisition began way back in 2013 as the
land was required by the Power Grid Corporation of India Lim-
ited (PGCIL) to set up a power grid substation. This was a union
government project, but the state government was expected to
identify and acquire the land (as is the norm with respect to
most union government projects). The project cost was `300
crore (Chattopadhyay 2017). We could not find any particular
reason why this specific land was chosen. Some scientists have
said that the land chosen for a power substation needs to fulfil
strict safety norms and that must have happened in the case of
Bhangar too (Datta Majumdar 2017).
The land chosen for the project was full of fisheries and multi-
crop farmland yielding three crops a year. After the process
began in 2013, the people learnt that there was to be a power
grid substation on the acquired land but which would not
have improved the electricity supply of the said villages
(Gangopadhyay 2017). It must be noted that in Bhangar, land
was acquired using the Land Acquisition Act of 1894 (LAA,
1894) and surprisingly till date no new state law has been
passed, like in some other states (Sathe 2017: 53). After com-
ing to power in 2006, the Left Front made announcements
Economic & Political Weekly EPW may 6, 2023 vol lViii no 18
SPECIAL ARTICLE
with respect to encouraging industrialisation. The new in-
dustrial policy of the Left Front was summed up in the election
slogan—“Agriculture is our base, industry our future” (Banerjee
2006: 5296).
The Interest Groups and the People Involved
The Bhangar story has three main, distinct interest groups
which are represented by various personalities.
The first interest group is the real estate. The personality is
that of Arabul Islam. He is a politician from that area and is
largely talked about as a “strongman” in the largely Muslim-
dominated area. Arabul (as he is called by the people) was in
the Indian National Congress, but after TMC was formed, he
joined it.
He was elected the member of legislative assembly (MLA) of
Bhangar in 2006 on a TMC ticket. But in 2011, he was defeated
by the CPI(M) candidate, Badal Zamadar. He is a politician
with substantial interests in the real estate of this area. The
land in Bhangar was slowly becoming important and ‘‘valua-
ble’’ as the process of expansion of Kolkata was under way.
That this was an opportunity to make speculative profits out of
land sale was gauged by Arabul.
As we learnt from our interviews, much before 2013 (that is,
when land for the power grid project was needed), he had
been buying land from the farmers at low prices. He was doing
this on behalf of the real estate developers. It has been report-
ed to us that the farmers who were intimidated into selling
land were not happy with the compensation money that he
was giving. But, it was not possible for the farmers to oppose
him, as he was/is a very powerful person and the farmers
feared violence from him and his cronies.
Arabul represents the vested, entrenched interests of those
who believe and are successful in exploiting the farmers.
They also have the law on their side, as what he was doing was
not unlawful, that is, a private party (the farmer) selling to a
private party (to the developer via Arabul). Also because of his
political clout, he had the state looking the other way (at least
for some time, as we shall see subsequently).
“In 2013–14, the PGCI began purchasing land from the locals
some of whom were not ready to part with their fertile land.
When the PSU failed, the supporters of local TMC leader Arabul
Islam entered the scene and forced the villagers to sell the
land” (Bhattarchrya 2017a). “He (Arabul) threatened us with
violence if we protested,” said Mamin Ali, a resident of Bhang-
ar (Chattopadhyay 2017).
Arabul fell from grace around 2015. Abdur Rezzak Mollah1
was given the Vidhan Sabha ticket by TMC in 2016, which he
won. But till then the anti-acquisition agitations had proceeded
ahead (Bhattarchrya 2017a). It is to be noted that people of
Bhangar do not like Arabul even now and there are still minor
clashes between Arabul’s strongmen and the locals. He is now
being assisted by his son.
The second interest group is, namely the Communist Party
of India (Marxist-Leninist) Red Star, a relatively obscure far-left
outfit. The leaders are Alik Chakraborty, Sarmishta Chowdhury,
and Pradip Singh Thakur. This group was active in the Bhangar
59
SPECIAL ARTICLE
area before 2013. They represent the counter-force to the
entrenched interests, namely Arabul and the likes of him.
However, it must be mentioned that Chakraborty has denied
the charge that he is a Maoist and said that his party believed
in “parliamentary democracy and peaceful democratic move-
ments” (Nagchaudhury 2017). Coming out of the Marxist tradi-
tion and talking of the process as ‘‘primitive accumulation,’’
the party started to organise the dissatisfied farmers and also
many more who were dependent on land. The people who
were unhappy and alarmed with the strong-arm tactics of
Arabul also joined this agitation. It is clear that the CPI(ML)
Red Star provided the leadership to vent the grievances and
overcome the fearfulness of the farmers and other local inhab-
itants. Over a period of time, the agitators got the support of
CPI(M), CPI(ML)(Liberation), Majdoor Kranti Parishad and also
the Association for Protection of Democratic Rights. Some of the
local TMC workers have called these groups outsiders. Chatto-
padhyay (2017) notes Arabul to have said that “We have asked
the administration to arrest those agitators, who in the name of
land movement are bringing terrorists into the region and are
openly moving around with weapons.” Chattopadhyay (2017)
adds that the villagers, of course, deny the presence of “outsid-
ers,” but accept that certain people from outside have extend-
ed their support and solidarity to the protesters. In any case,
some groundwork with respect to organising the unrest among
the people against Arabul and acquisition had already been
done before 2013.
In our interviews, we found that when people speak of land
acquisition for the power grid, they say that it was Arabul who
started to acquire the land. Apparently, this is because it has
been reported that “he was given the contract of ‘land filling’
for the power grid” (Bagchi 2017).
Technically speaking, it is the collector/district magistrate
who has the power vested in them (whichever may be the
law being used). This actually reveals Arabul’s sway over the
said area. In any case, when Arabul “started to acquire land”
on behalf of the state government for the power grid, there
was already a movement with leaders who had mobilised the
locals sufficiently. There was a groundswell of antagonistic
feeling against him. Also, now it was not a private transac-
tion between two parties, but the state was acquiring the
land using the colonial LAA, 1894. But he was an ‘‘intermediary’’
or an ‘‘aggregator’’ along with his goons, and so local people
say that he started to acquire land. This land was acquired
forcibly as there were no consultations with the people, gram
panchayat, etc, before the acquisition. As soon as it was clear
that land is being acquired and the compensation being paid
is not adequate, people were angry and their outrage was
channelised into a proper agitation by leaders in the form
of Chakraborty and Chowdhury who were already there.
The third interest group is the state itself and the person in
the story is Mamata Banerjee, the founder of TMC and the chief
minister of West Bengal since 2011; and the TMC itself. She and
her party were elected with a thumping majority for the state
assembly in 2011, 2016 and later again in 2021. As mentioned
earlier, she and her party were one of the major opponents of
60
the land acquisition in Nandigram–Singur. So, quite expect-
edly, the TMC election manifestos for 2011 and 2016 stated that
the state would not acquire land forcibly. It was maintained
that the private sector would have to buy the land on its own,
and the state would not interfere on their behalf. With this
background, one may not have been wrong in expecting that
the TMC government would be more sensitive to the issue of
land acquisition. But, apparently this ‘‘sensitivity’’ came some-
what later.
Banerjee was cautious initially, but when the locals dug up
Bhangar road slightly before 17 January 2017 to prevent police’s
entry, she was unwilling to accept it (Dutta Majumdar 2017).
The timing of the severe protests and not allowing the police
inside the villages is also interesting. The Bhangar area erupted
just before a two-day International Investor Summit in Kolkata
(Bhattarchrya 2017a). Obviously, the purpose was to embar-
rass her and her government in front of international inves-
tors. That could be the reason why, after the violence erupted,
she was unyielding in the beginning.
It needs to be pointed out that there were two factions within
the TMC local workers in the Bhangar area. The first one was,
of course, led by Arabul. He was making profits from land
for quite some time in the said area. The second faction were
consisting of other TMC local workers, who were against
Arabul and his nefarious tactics. Thus, the local TMC was
itself divided. Hence the allegations that the agitators con-
sisted of TMC members; and they were fighting the other faction
of the local TMC.
What was the role of Bharatiya Janata Party (BJP) in all
this? It has been known for some time now that the BJP has
been trying to make inroads in the politics of West Bengal. In
this agitation, there was a complete absence of BJP at all the
levels. But over last couple of years, the BJP has been trying
to expand its presence in a very aggressive manner. In the
Lok Sabha elections held in 2019, the BJP increased its share
to 18 seats from two seats in 2014 elections. In the Vidhan
Sabha elections held in 2016, TMC had 207 seats and BJP had
10 seats.
Causes of Protest
The causes of protests can be categorised in three broad
streams, namely economic, political, and environmental.
On the economic front, it was argued that the land was very
fertile with three crops and having fisheries. In the initial stages,
when Arabul was acquiring land for the power grid pro-
ject, the government was paying `50,000 to `60,000 per acre.
Later on, as the government entered in a dialogue with the
land losers, one of the most important things that was done,
was to increase the land price to `4 lakh per acre but the land
losers were not happy with this monetary compensation. They
were promised what they did not think as an adequate mone-
tary compensation and nothing else was offered (for example,
jobs). In other words, they were not to be partners in the ‘‘de-
velopment’’ process that was to ensue. It is also believed that
people protested because they were not consulted with respect
to the compensation.
may 6, 2023 vol lViii no 18 EPW Economic & Political Weekly

When a compromise was reached, the compensation offered
was increased to `12 crore for the entire land of 13.5 acres. Out
of this `3 crore, `75 lakh had not been paid to the landowners,
till March 2020.
At the political level, the manner in which land acquisition
was commenced reeked of hubris and also political immaturity.
There was no consultative process that should be a basic mini-
mum in a democracy. The land was chosen without the con-
cerned people even knowing about it. The PGCIL did not have
any meeting with the gram sabha, so it did not explain any-
thing to the people. Consequentially, none of the queries of the
people were answered. This led to people being extremely an-
gry and with a feeling of helplessness.
Especially on 16 January 2017, when sporadic disturbances
and unrest had been going on for some time, it seems politically
puerile to send only the police force. While the TMC leaders
were not allowed to enter the area as we have seen before, if
Banerjee herself had visited the area, it seems to us that
the agitators would have met her. Sheikh Kalu, one of the
chief leaders of the protest movement, said that “We are all
Trinmool supporters. All that Didi needs to do is come here
and tell us that the project will be scrapped. But she is not
doing that. Rather, the local small-time leaders of the party
are threatening us with violence if we do not lift the agitation”
(Chattopadhyaya 2017).
While the locals were angry and disillusioned with the party
as such and also with some of its local members, they told us
in the interview that they still support her and do not blame
her for the violence that erupted (newspaper reports also
state that the locals do not pin the blame on her). Apparently,
Banerjee is one (more) of those charismatic leaders whom
people refuse to blame even if they suffer. Our interactions
with the villagers showed that, this area is still very much
dominated by the TMC; only some local leaders like Arabul
are not acceptable.
The environmental issues played an important psycho-
logical and emotional role. It was claimed that sulphur hex-
afluoride (SF6), which was going to be used in the substa-
tion, would lead to drop in crop yields, health issues and
also impotency. It seems that there was no scientific basis
for environmental issues (Datta Majumdar 2017), but as
these issues were raised, many more people—who were not
going to lose land, did not own any land at all, were not de-
pendent on land in any way—got involved in the agitations.
We cannot ascertain whether this was done on purpose
but it did give the protests a scale because of which it was
covered not just by the local but also by the national media.
People also told us that they got involved as enough devel-
opment was not happening in the said area, and that they
were demanding development.
At an official level, there was a police report submitted to
the chief minister of West Bengal, Mamata Banerjee. The
police report states that it was the “factional feud” between
the TMC, and the involvement of the external elements as
the factors for the agitations in Bhangar (Unique Times, 25
January 2017). There were two factions within the TMC, the
Economic & Political Weekly EPW may 6, 2023 vol lViii no 18
SPECIAL ARTICLE
report states, out of which one was making money out of
land deals for quite some time. The other faction was un-
happy as it was not getting anything out of these “deals.” So,
the second faction helped the “extreme leftist organisa-
tions” and “several anti-national organisations” to mislead
the people in the area. Poignantly, the police report does not
mention the history of land acquisition in that area for last
few years, that the locals were unhappy with the compensa-
tion package, etc, which we have analysed above. But it does
make infighting between the ruling party TMC as a reason,
quite clear.
The cavalier attitude of the TMC leaders did not help their
cause at all. It has been reported that Rezzak Mollah, the then
state minister of food procurement and horticulture, who rep-
resented Bhangar in state assembly, ridiculed people’s fears
at a public rally in the area by saying “You will be provided
with hybrid babies from other countries as a substitute”
(Chattopadhyay 2017).
What Actually Happened?
Tracking the exact events in Bhangar leads us to excerpts from
the press release on the CPI (ML) website, which states that
The JJPOBRC calls an indefinite road blockade at Bhangar on 11 January
2017, to protest the forcible land acquisition and setting up of a power
grid substation on the fertile, multi-crop land of the area, a project that
will cause inestimable and irreversible damage to the ecology and
environment as well as jeopardise the lives and livelihoods of countless
farmers and their families.
It also states that the state administration has been trying
to appease the residents of Bhangar through several promises
by lining up developmental projects in the area and soothe
them up with promises of jobs and compensation, but it is to
be noted that since January 2017, there has been constant
acrimony between the residents of Bhangar and the state
administration. Two senior TMC leaders, Rezzak Mollah
and Mukul Roy, were sent to take stock of the situation on
the ground but they could not enter the affected area
(Sweety Kumari 2017).
As the roadblock was declared and implemented from
11 January 2017, the situation worsened progressively. On
16 and 17 January 2017, the situation got out of hand as the
police and the locals both attacked each other. With the agi-
tations starting, the police opened fi re and the agitators
were beaten up extremely violently. On 16 January 2017, one
person (Maufisul Ali Khan, age 26) died in firing (Sweety
Kumari 2017). The deaths of the locals (the number is con-
tested) were the first ones to happen after Banerjee had
come to power in 2011. Two far-left activists were arrested
for crimes like unlawful assembly and rioting. One escaped
the arrest (Dutta Majumdar 2017). We were told by the peo-
ple that the police entered houses and beat up people (ghar-
ghar mein ghus-ghus ke mara). The police were also beaten
up, in return.
It was claimed that in January 2017, a popular local leader,
Sheikh Samsul Haque, who belongs to the TMC but supported
the agitation was also killed by the police. Chakraborty went
61
SPECIAL ARTICLE
into hiding as police lodged several first information reports
against him; and Choudhury was charged under stringent
Unlawful Activities (Prevention) Act and arrested in
January 2017, but later released on bail. Chakraborty was
underground for a long time but he was arrested on 30 May
2018 and later released.
The work has completely stopped since January 2017, when
90% of the work of the substation was completed. As the
situation worsened after 17 January 2017, West Bengal power
minister Sovandeb Chattopadhyay hastily announced that
the project was shelved. But he had to back track immediately
as there would be ‘‘huge loss’’ if it were shelved (Dutta
Majumdar 2017). Ten days after the incidents of 17 January
2017 had happened, the blockade was removed. But the police
could not enter the area for some more time. In August 2017, it
was reported that “According to the villagers, peace can be
restored at Bhangar if the government addresses their con-
cerns through talks” (Das 2017).
But in any case, there was an impasse as the state govern-
ment maintained that it would deal only with the locals but
the agitating villagers were saying that they have the right to
decide who would represent them. Obviously, the villagers
wanted the leaders like Chakraborty to represent them, whom
the government found to be a hardliner. From our interactions
with the villagers, we could see that the villagers have com-
plete faith in Chakraborty. Many locals said that “we are will-
ing to do anything for him.”
One of the officers of PGCIL is reported to have said (in
April 2017) that their power station lies without personnel,
there is no one to protect their property, and hence, comput-
ers and printers have been stolen. The officers are reported
to have said that they have no access to the chief minister.
Rezzak Mollah, the then TMC MP from Bhangar, was also
completely ignorant about the status of the project at that
time. He also remarked that if the government had talked to
the residents directly and addressed their fears, the matter
could have been resolved. “Land sharks in the area had
pumped in finances to raise the bogey of ecology and envi-
ronment to protect their real estate interests,” he added
(Nagchoudhury 2017).
Das (2017) in a review of the situation reports that, on
12 June 2017, Mamata Banerjee had spoken in favour of acqui-
sition in Bhangar. She had said that there were no facts to
substantiate the claims of the agitators that “crops would
become dry and there would be infertility among locals if the
grid came up.” But when Das interacted with the villagers, the
residents of the villages emphasised that they were not
against power grid as such. The agitators said that they were
willing to resolve the issue; but the state government had not
called them for talks.
Das also reports that, there was tension in the said area
again when local TMC leader and member of the Bhangar II
panchayat samity, Ashikur Rehman, was shot dead in the mar-
ket area. Rehman belonged to the faction led by former TMC
MLA Arabul. His assassination led to blame game within the
various factions of the TMC. It is clear that till this point, the
62
TMC government did not send anybody to talk to the villagers
and there was anger about it among the people.
After a few months, Chakraborty, also a spokesperson for
JJPOBRC, stated that
If the government wants to feel the pulse of the villagers, the
administration can go for a plebiscite. But the government is not
moving in that direction. Therefore, we have decided to hold a ref-
erendum in the area to understand the minds of the locals properly.
(Bhattacharya 2017b)
Kaiser Ahmed, a TMC MLA responded that, “They are free to
demand referendum. But already we are in dialogue with
them, where we have given assurance that if the project caus-
es any harm, it won’t come up.” In fact, the area had become
so volatile that many of the TMC members who had absconded
from their homes were not able to return till then, reports
Bhattacharya (2017b). It was also reported that there was to
be a meeting between TMC leader Kaiser Ahmed, the agita-
tors and the district police superintendent on 12 September
2017 to find out the ways to restore peace. This definitely was
a step forward.
Was the Problem Resolved?
The area continued to be tense till August 2018, that is, for
almost one and a half years after the brutal agitations. But
on 11 August 2018, the Week reported that an agreement
has been reached between the protesters and the state gov-
ernment. Chakraborty said that an amicable settlement has
been reached that involves compensation to land losers and
trimming down of the project.
The government agreed to downsize the project, take proper precau-
tionary measures, adequately compensate land owners and even com-
pensate the loss of lives and property caused by vandalism of the rul-
ing party’s local leadership. We are happy with the government’s ap-
proach. We always wanted solutions through talks said Chakraborty.
(Bhattacharya 2018)
Some development projects were also finalised as part of the
agreement signed between Y Ratnakar Rao, district magis-
trate of South 24 Parganas; and Choudhury and Chakraborty
reported Bhattacharya (2018).
Interestingly, the impetus to a compromise seems to have
come through the victory of the agitators in rural elections, in
spite of many hurdles posed in their way. The gram panchayat
elections were held in Polarhat II (where the four villages be-
long) in May 2018. The JJPOBRC won five out of nine seats in
the gram panchayat elections. Once this happened, the TMC-
led government seems to have taken it as a verdict against
them and gone in for negotiations. “Work will resume on Au-
gust 14, as all sides have come to a mutual understanding” said
Y Ratnakar Rao, district magistrate, South 24 Parganas, re-
ports Bhattacharya (2018).
Compromise seems to consist of higher monetary compen-
sation (as mentioned in the earlier section). Further, instead of
16 high tension towers, PGCIL has now agreed to make only
four. Further, the power lines will run underground. Villagers
have also been promised jobs in the construction of power grid
(Dutta 2018).
may 6, 2023 vol lViii no 18 EPW Economic & Political Weekly

Other step that was taken was to give jobs to land losers.
Anecdotal evidence suggests that 10 men got jobs in the police
force, while three are under training. It is believed that 36
more will be given some government job.
Anecdotal evidence also suggests that the locals felt that for
a long time, there was no ‘‘development’’ happening in the said
area. But over a period, it was said that ‘‘Mamata has built a
hospital, cold storage has been finalised, high school is being
built and the roads have improved as she allocated `25 crore
for them.” It is, of course, revealing about Indian democracy
that the people think that a politician does this kind of a
thing as a benevolent act, and not that it is their right to have
these things. This kind of supposition needs to be taken seri-
ously, as this thinking comes out of their every day lived expe-
rience. Public services are still taken to be largesse gifted by
the powers-that-be.
Further, it was agreed that instead of the power grid project,
two regional power substations would be established. The
state also declared that the kin of the deceased persons in the
protest would be given compensation. An 18-member commit-
tee of JJBPR members was entrusted with the responsibility to
decide the distribution of compensation amount for those who
parted with their land. This truce, though it was not welcomed
by some of the residents, by and large, has been accepted by
the villagers.
It was reported to us that most of the agitators did not own
land, but they got into the violence because they wanted devel-
opment; they wanted improvements in their villages. So,
above-mentioned steps took care of these requirements.
Work on the project resumed in August 2018 and was ex-
pected to be completed in December 2018. However, the
peace was short-lived as the plethora of protests and unrest
returned to Bhangar in December 2018. The villagers alleged
that the developmental works which were supposed to go in
tandem with the construction work of the substation were
not happening. A dialogue between the protesters and the
state followed soon and work resumed on 29 December 2018.
On 17 January 2019, the residents of Bhangar envisaged to
mourn the death of the protesters but once again tension
grew as the concrete memorial constructed in the memory of
the deceased was found to be wrecked. This generated a
fresh wave of protests which further delayed the construc-
tion activities. As of January 2019, PGCIL was yet to establish
the towers and the messy unrest seemed to be continuing in
Bhangar like a cold war.
Situation in March 2020 and the Elections in May 2021
The JJPOBRC had been in power in the gram panchanyat since
May 2018. They were trying to improve the implementation of
development projects and also trying to get more projects.
Some of the connecting roads which were mud roads were get-
ting transformed into proper, all-weather roads. The villagers
say that this had not happened in the 34 years of CPI(M) and
14 years of TMC rule. The villagers also said that now they are
finding that earlier when the money used to come for Mahatma
Gandhi National Rural Employment Guarantee Act (MGNREGA),
Economic & Political Weekly EPW may 6, 2023 vol lViii no 18
SPECIAL ARTICLE
it was claimed to have been used but the villagers never saw
any work being done, neither did they get any wages for the
work. But the JJPOBRC is implementing the scheme without
corruption, so the work is getting done and the villagers are also
being paid.
On the violence front, there has not been even minor vio-
lence since the gram panchayat elections. But some protests
have continued as the complete amount of compensation has
not been paid (as mentioned above). The BJP has been trying
to leverage this disgruntlement of the villagers, but it has not
been successful.
Conclusions: Moving towards a Learning State?
The Bhangar case study shows us that, in the initial stages of
acquisition, the TMC government led by Banerjee behaved exactly
in the same manner as the Left Front government. TMC’s stance
changed when the gram panchayat election results were de-
clared. In our fieldwork, we often heard the refrain that
“Bhangar should not become TMC’s Nandigram–Singur.” This
catchphrase sums the fear that the TMC was having and why it
changed.
What is also clear from our study is that the villagers were
willing to sell the land if their conditions were met. These con-
ditions were, on the lines of taking them in confidence, giving
them an alternative source of livelihood, and an acceptable
compensation, implement development projects like MGNREGA,
etc. Also, and importantly, treat them with respect and dignity
as human beings and citizens of this country.
There seems to be more and more evidence coming from
various parts of India that the farmers are willing to sell land if
they get a ‘‘proper’’ compensation and if industrialisation oc-
curs in the acquired area (Sathe 2017: 5-9; Pai and Kumar
2014; Bhattacharya 2021). The discourse on land acquisition
has been framed within the parameters of ‘‘inevitable story of
primitive accumulation’’ in the Marxist tradition (Ruparelia et
al 2011: 5). This tradition argues that the capitalist system
forcibly takes away the means of production from the labour-
er. The process of primitive accumulation, therefore, is noth-
ing different than the historical process of divorcing the pro-
ducer from the means of production.
However, the issue takes on a very different hue when the
farmers are willing to sell their land, albeit at a proper com-
pensation, and also when the farmers do not want to engage in
farming as such NSSO report 2005 (Ministry of Statistics and
Programme Implementation 2005: i).
As per the NSSO report 2005 (Ministry of Statistics and
Programme Implementation 2005: i), 40% of the farmers did
not want to engage in farming. Since then, in the surveys, this
question is not being asked to the farmers. But one can sur-
mise that this percentage would have increased (and not
decreased) due to such a wide spread agrarian distress.
One also needs to factor in that the farmers in India are op-
erating within a democratic framework, even if the system is
flawed. They have not only been agitating against forced agita-
tions, but parties have also lost political power due to poor
handling of the acquisition issue. Also, with the help of fairly
63
SPECIAL ARTICLE

‘‘free’’ media they have reached national and international
audiences.
Possibly as a result of this, what we do notice is that over
the period, the governments are less and less inclined to
crush agitations and more and more willing to negotiate and
give better and better compensation packages (Tamil Nadu,
Maharashtra, NCR, etc). Difference between other agitations
in India and in West Bengal seems to be that there is much
more violence in West Bengal. In the case of Bhangar, only a
small plot of land was required. It would not have been off
the mark to expect that Banerjee would have taken care to
avoid conflict. But this did not happen for a long period,
though it did eventually.
All this shows that a new framework needs to be devel-
oped to comprehend agitations of the farmers in the con-
temporary India. Sathe (2017: 201) has developed the con-
cept of a ‘‘learning state.” This phrase implies that the state
is not a static being, especially in a democracy. It is not fos-
silised in time, it keeps on learning from experience, adapts
and changes its course. The political party in power that
wants to win the elections again and again, tries to learn
from its past mistakes and tries not to repeat them later.
Thus, the government has and/or needs to have a certain
level of flexibility in its approach. Then, there are issues of
legitimacy that even an elected government needs to face
between two elections. We believe that possibly, a learning
state is emerging in West Bengal. This could lead to indus-
trialisation of the state which bodes well for the state and
for India.
However, there can be an alternative reading of this epi-
sode as pointed out to the author. This reading states that
there is, basically speaking, no major difference between
the compensation package offered by the Left Front govern-
ment in Nandigram and Singur; and by the TMC government
in Bhangar area. Rather, a substantial difference lies in the
extremely rigid stance of the TMC party when they were
agitating in Nandigram–Singur area and in a much more
accommodative stance of the CPI (ML) Red Star leaders of
the Bhangar agitations. The TMC probably had broader po-
litical interests in avoiding the compromise and so they con-
tinued with the agitations. But CPI (ML) Red Star did not
have any such political objectives and so were willing to
reach a settlement. Accordingly, what we see is not so much
of a “learning by state,” but rather a case of “learning by
agitators.” This argument locates the difference in the two
cases in the ambitions of the agitating political parties and
also narrows down the causes for agitations to the compen-
sation package only. However, the fi rst reason takes away
the agency from the farmer; and the second one loses sight
of the fact that the farmers were asking for more than just
the compensation package; for example, a voice in what was
coming about and respect.
In any case, it is interesting to note that in the state-level
elections held in April 2021, the TMC lost the said seat and it
went to a Congress and left-supported candidate. Whether,
this was because of mishandling of the Bhangar situation (as
one of the reasons) would have to be studied separately, but
the story continues and remains interesting.

note
1 Abdur Rezzak Mollah popularly known as
Rezzak belonged to the CPI(M) till 2014 and
he was also their minister for land and land
reforms. However, he was expelled from the
party in 2014, and he formed his own party.
But in 2016, he joined TMC. He fought the
2016 election on the TMC ticket and was
re-elected as MLA of Bhangar. Till April 2021
elections, he was the MLA from Bhangar.
With respect to Parliament elections, since
2009, the elected candidate has belonged to
the TMC. In 2019 elections, Mimi Chakravarty
(an actress in Bengali fi lm industry) was
elected and till date she is serving as the MP
of Bhangar.
References
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— (2017b): “Bhangar Land Agitators Demand
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Gangopadhyay, B (2017): “State and Bhangar,” cal Economy: A Great Transformation? Oxon:
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Stir, Mamata’s Big Headache,” Indian Express,
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pp 1435–42.
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December 2003, Situation Assessment Survey Sathe, D (2017): The Political Economy of Land
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Note to ReadersI
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64 may 6, 2023 vol lViii no 18 EPW Economic & Political Weekly

CURRENT STATISTICS EPW Research Foundation

Wholesale Price Index Foreign Trade

The WPI-based inflation rate decreased to 1.3% in March 2023 from 14.6%
registered a year ago and 3.9% a month ago. The index for primary articles grew
by 2.4% against 15.9% a year ago and 3.3% a month ago. The rate of inflation for
food articles decreased to 5.5% from 8.4% a year ago and 3.8% a month ago. The
index for fuel and power grew by 9% compared to 31.8% a year ago and that for
manufactured products declined by (-) 0.8% against 11.3% a year ago. In FY 2022–23,
the WPI-inflation rate decreased to 9.4% from 13% reported in FY 2021–22.
The foreign trade deficit widened to $19.7 bn in March 2023 from $18.5 bn
registered a year ago. Exports contracted by (-)13.9% to $38.4 bn and imports by
(-)7.9% to $58.1 bn from $44.6 bn and $63.1 bn, respectively, reported a year
ago. Oil imports stood lower at $16.1 bn compared to 21.1 bn a year ago and non-
oil at $42.0 bn compared to $41.9 bn. During FY 2022–23, cumulative exports
increased by 6.0% to $447.5 bn and imports by 16.5% to $714.2 bn compared to
$422.0 bn and $613.1 bn, respectively, reported in FY 2021–22.

Consumer Price Index Index of Eight Core Industries

The CPI-inflation rate decreased to 5.7% in March 2023 from 7% reported a year ago
and 6.4% a month ago. The consumer food price index grew by 4.8% compared to
7.7% a year ago and 6% a month ago. The CPI-rural inflation rate decreased to 5.5%
and the urban inflation rate to 5.9% from 7.7% and 6.1%. In FY 2022–23, the CPI
inflation rate increased to 6.7% from 5.5% registered in the previous year. According to
Labour Bureau data, CPI for agricultural labourers (CPI–AL) increased to 7% in March
2023 from 6.1% a year ago and CPI for industrial workers (CPI–IW) to 5.8% from 5.4%.
The ICI grew by 3.6% in March 2023 compared to 4.8% registered a year ago. Growth
rate in petroleum refinery products segment decreased to 1.5%, electricity generation
to -1.8% and cement to -0.8% from 6.1%, 6.1%, and 9.0%, respectively. Production
of coal grew by 12.2%, steel by 8.8%, natural gas by 2.8% and fertilisers by 9.7%
compared to their respective growth rates of 0.3%, 4.1%, 7.6%, 15.3%. Growth rate
in the crude oil segment stood at -2.8% compared to -3.4%. During FY 2022–23, the
ICI grew by 7.6% compared to 10.4% recorded in the same period last year.

Movement of WPI-Inflation Rate January 2022–March 2023 Merchandise Trade March 2023
Year-on-Year in % March 2023 Over Month Over Year April–March
($ bn) (%) (%) (2022–23 over 2021–22) (%)
60
Exports 38.4 13.3 -13.9 6.0
Imports 58.1 13.3 -7.9 16.5
Fuel and Power Trade balance -19.7 13.2 6.5 39.6
30 Data is provisional. Source: Ministry of Commerce and Industry.
Primary Articles
9.0%
Trade Balance January 2022–March 2023
2.4%
$ billion
0
-0.8% 7

Manufactured
Products 0
-30 Non-Oil
Jan F M A M J J A S O N D Jan F Mar* -$9.0 bn
2022 2023 -7
* Data is provisional; Base: 2011–12 = 100. Oil
-$10.7 bn
-14
Trends in WPI and Its Components March 2023* (%)
-21
Financial Year (Averages) -$19.7 bn
Weights Over Month Over Year 2020–21 2021–22 2022–23
-28
All commodities 100 0.0 1.3 1.3 13.0 9.4
Primary articles 22.6 1.2 2.4 1.7 10.2 10.0 Total Trade Balance
-35
Food articles 15.3 1.1 5.5 3.2 4.1 7.3 Jan F M A M J J A S O N D Jan F Mar
2022 2023
Fuel and power 13.2 -1.3 9.0 -8.0 32.5 28.2
Oil refers to crude petroleum and petroleum products, while non-oil refers to all other commodities.
Manufactured products 64.2 -0.3 -0.8 2.8 11.1 5.6
*Data is provisional; Base: 2011–12=100. Source: Ministry of Commerce and Industry.
Movement of Index Values of Components of IIP January 2022–February 2023
Index Value
Movement of CPI Inflation January 2022–March 2023
Year-on-Year in % 210
Electricity 174.0
15 168
136.8
12 126
129.0
Consumer Food
9 84
Manufacturing Mining
5.8%
42
6 CPI
Miscellaneous 5.7% 0
3 Jan F M A M J J A S O N D Jan Feb*
4.8% 2022 2023
* February 2023 are quick estimates; Base: 2011–12=100.
0

-3
Index for Eight Core Industries March 2023* (%)
Jan F M A M J J A S O N D Jan F* Mar* Weights Over Over Financial Year (Avgs) in %
2022 2023
Month Year 2021–22 2022–23
* Data is provisional. Source: National Statistical Office (NSO), Ministry of Statistics and Programme Implementation,
Base: 2012=100. Infrastructure industries 40.27@ 11.3 3.6 10.4 7.6
Coal 10.3 25.0 12.2 8.5 14.8
CPI: Rural and Urban March 2023* (%)
Latest Over Over Financial Year (Avgs) Crude oil 9.0 13.5 -2.8 -2.6 -1.7
Month Index Month Year 2021–22 2022–23 Natural gas 6.9 11.4 2.8 19.2 1.6
CPI Combined 177.2 0.23 5.66 5.51 6.65 Petroleum refinery products 28.0 12.1 1.5 8.9 4.8
Rural (2012=100) 178.0 0.06 5.51 5.43 6.84 Fertilisers 2.6 -5.7 9.7 0.7 11.3
Urban (2012=100) 176.3 0.40 5.89 5.58 6.41 Steel 17.9 7.7 8.8 16.9 8.6
CPI: Occupation-wise Cement 5.4 9.5 -0.8 20.8 8.6
Industrial workers (2016=100) 133.3 0.5 5.8 5.1 6.1 Electricity 19.9 7.8 -1.8 8.0 8.9
Agricultural labourers (1986-87=100) 1175 0.3 7.0 4.0 6.8 (Base: 2011–12=100); *Data is provisional; @ The revised eight core industries have a combined weight of 40.27% in the IIP.
* Provisional; Source: NSO (rural and urban); Labour Bureau (IW and AL). Source: Ministry of Commerce and Industry.
Comprehensive current economic statistics with regular weekly updates are available at: http://www.epwrf.in/currentstat.aspx.

Economic & Political Weekly EPW may 6, 2023 vol lViii no 18 65

 CURRENT STATISTICS EPW Research Foundation
India’s Quarterly Estimates of Final Expenditures on GDP
2020–21 2021–22 2022–23
` Crore | At 2011–12 Prices Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Private final consumption expenditure 1548901 (-22.9) 1857460 (-7.4) 2188868 (1.5) 2223256 (6.5) 1822102 (17.6) 2121839 (14.2) 2426098 (10.8) 2262405 (1.8) 2187196 (20.0) 2309155 (8.8) 2477160 (2.1)
Government final consumption expenditure 412664 (9.2) 310074 (-25.9) 331300 (-4.2) 441224 (29.0) 403808 (-2.1) 346501 (11.7) 350565 (5.8) 462316 (4.8) 411243 (1.8) 332450 (-4.1) 347661 (-0.8)
Gross fixed capital formation 669321 (-44.1) 1075997 (-1.6) 1164824 (2.6) 1303947 (10.1) 1077836 (61.0) 1209609 (12.4) 1179221 (1.2) 1371090 (5.1) 1299435 (20.6) 1327486 (9.7) 1276872 (8.3)
Change in stocks 2689 (-90.1) 4154 (-84.6) 41592 (59.5) -3490 (-112.4) 8895 (230.8) 31402 (655.9) 29902 (-28.1) 51450 (-1574.2) 31151 (250.2) 30691 (-2.3) 29969 (0.2)
Valuables 3791 (-91.4) 52366 (18.4) 50926 (37.2) 100918 (156.9) 22035 (481.2) 134378 (156.6) 73595 (44.5) 51597 (-48.9) 35011 (58.9) 108364 (-19.4) 45729 (-37.9)
Net trade (Export–Import) 6136 -28799 -120133 -167215 15630 -46285 -91259 -205582 -86172 -170575 -97491
Exports 523787 (-25.5) 660856 (-6.3) 646358 (-8.5) 724592 (3.7) 765031 (46.1) 826729 (25.1) 825929 (27.8) 846715 (16.9) 915472 (19.7) 928593 (12.3) 919661 (11.3)
Less imports 517651 (-41.0) 689655 (-17.7) 766491 (-5.0) 891807 (11.7) 749401 (44.8) 873014 (26.6) 917188 (19.7) 1052297 (18.0) 1001644 (33.7) 1099168 (25.9) 1017152 (10.9)
Discrepancies 80521 (18.2) 75478 (-17.0) 40637 (-5061.5) 19085 (-92.0) -59256 (-173.6) -145787 (-293.2) -117350 (-388.8) 84749 (344.1) -129956 (119.3) -56583 (-61.2) -61316 (-47.7)
Gross domestic product (GDP) 2724023 (-23.2) 3346731 (-5.6) 3660581 (1.7) 3917725 (2.5) 3311050 (21.6) 3651659 (9.1) 3850772 (5.2) 4078025 (4.1) 3747908 (13.2) 3880988 (6.3) 4018584 (4.4)

India’s Overall Balance of Payments (Net): Quarterly

2021–22 ($ mn) 2022–23 ($ mn) 2021–22 (` bn) 2022–23 (` bn)
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Current account 6559 -9734 -22167 -13424 -17971 -30868 -18243 484 [0.9] -721 [-1.3] -1661 [-2.6] -1010 [-1.5] -1387 [-2.1] -2463 [-3.7] -1500 [-2.2]
Merchandise -30715 -44511 -59750 -54483 -63042 -78257 -72720 -2266 -3298 -4477 -4099 -4866 -6245 -5978
Invisibles 37275 34777 37583 41059 45071 47389 54477 2750 2577 2816 3089 3479 3781 4478
Services 25808 25579 27809 28319 31069 34429 38719 1904 1895 2084 2130 2398 2747 3183
of which: Software services 25136 26781 28356 29266 30692 32681 33541 1854 1984 2125 2202 2369 2608 2757
Transfers 19013 18991 21312 21132 22874 24773 28467 1403 1407 1597 1590 1766 1977 2340
of which: Private 19222 19212 21447 21350 23065 24991 28641 1418 1423 1607 1606 1780 1994 2354
Income -7547 -9792 -11538 -8392 -8872 -11813 -12710 -557 -726 -865 -631 -685 -943 -1045
Capital account 25392 39622 22500 -1707 21909 1409 30178 1873 [3.7] 2936 [5.2] 1686 [2.7] -128 [-0.2] 1691 [2.6] 112 [0.2] 2481 [3.6]
of which: Foreign investment 11956 12575 -1283 -1439 -1252 12743 6700 882 932 -96 -108 -97 1017 551
Overall balance 31870 31189 465 -16024 4595 -30379 11069 2351 [4.6] 2311 [4.1] 35 [0.1] -1205 [-1.8] 355 [0.5] -2424 [-3.7] 910 [1.3]
Figures in square brackets are percentage to GDP.

Foreign Exchange Reserves Variation

21 April 22 April 31 March Month Year Financial Year So Far Financial Year
Excluding gold but including revaluation effects 2023 2022 2023 Ago Ago 2022–23 2023–24 2018–19 2019–20 2020–21 2021–22 2022–23
` crore 4375573 4226654 4340297 19405 148918 -10962 35276 68050 668976 590416 302585 102680
$ mn 532920 552595 528083 4773 -19674 -7020 4837 -14168 56831 94535 21435 -31532

Monetary Aggregates Variation

Outstanding Over Month Over Year Financial Year So Far Financial Year
` Crore 2023 2021–22 2022–23 2020–21 2021–22 2022–23
Money supply (M3) as on 7 April 22779807 556052 (2.5) 2073591 (10.0) 212486 (1.0) 446580 (2.0) 2044615 (12.2) 1649152 (8.8) 1839497 (9.0)
Components
Currency with public 3300388 42295 (1.3) 333186 (11.2) -68487 (-2.3) 22054 (0.7) 402080 (17.1) 283860 (10.3) 242645 (8.0)
Demand deposits 2354809 95942 (4.2) 186211 (8.6) -44393 (-2.0) 34212 (1.5) 257428 (14.8) 217871 (10.9) 107606 (4.9)
Time deposits 17053197 410665 (2.5) 1540581 (9.9) 326011 (2.1) 384231 (2.3) 1376262 (10.9) 1136327 (8.1) 1482361 (9.8)
Other deposits with RBI 71413 7151 (11.1) 13613 (23.6) -644 (-1.1) 6083 (9.3) 8844 (23.0) 11093 (23.4) 6886 (11.8)
Sources
Net bank credit to government 7370025 390028 (5.6) 854434 (13.1) 37961 (0.6) 453967 (6.6) 890012 (17.9) 627256 (10.7) 438428 (6.8)
Bank credit to commercial sector 14595459 301852 (2.1) 1898345 (15.0) 80593 (0.6) 171976 (1.2) 629822 (5.7) 948055 (8.1) 1806962 (14.3)
Net foreign exchange assets 4877921 192265 (4.1) 37659 (0.8) -13800 (-0.3) 15649 (0.3) 777810 (20.5) 275216 (6.0) 8210 (0.2)
Banking sector’s net non-monetary liabilities 4093606 328093 (8.7) 718841 (21.3) -107731 (-3.1) 195012 (5.0) 253594 (8.4) 202475 (6.2) 416098 (11.9)
Reserve money as on 21 April 4421292 107750 (2.5) 418981 (10.5) -66575 (-1.6) 107751 (2.5) 570276 (18.8) 468904 (13.0) 244655 (6.0)
Components
Currency in circulation 3455403 74985 (2.2) 246009 (7.7) 75678 (2.4) 74985 (2.2) 406451 (16.6) 279953 (9.8) 246702 (7.9)
Bankers’ deposits with RBI 897580 29787 (3.4) 162231 (22.1) -141377 (-16.1) 29787 (3.4) 154979 (28.5) 177859 (25.4) -8933 (-1.0)
Other deposits with RBI 68309 2979 (4.6) 10740 (18.7) -876 (-1.5) 2979 (4.6) 8844 (23.0) 11094 (23.4) 6885 (11.8)
Sources
Net RBI credit to Government 1420099 218448 (18.2) 76338 (5.7) -106835 (-7.4) 218448 (18.2) 107495 (10.8) 350910 (31.9) -248945 (-17.2)
of which: Centre 1416995 222926 (18.7) 75890 (5.7) -107867 (-7.4) 222927 (18.7) 106606 (10.8) 352626 (32.2) -254904 (-17.6)
RBI credit to banks & commercial sector -43694 -131258 (-149.9) 496817 (-91.9) 3191 (-0.6) -131257 (-149.9) -168464 (83.9) -174345 (0.0) 631265 (0.0)
Net foreign exchange assets of RBI 4629063 22383 (0.5) 192357 (4.3) -5773 (-0.1) 22382 (0.5) 608998 (17.0) 243079 (5.8) 164202 (3.7)
Govt’s currency liabilities to the public 30285 278 (0.9) 2272 (7.1) 0 (0.0) 279 (0.9) 565 (2.1) 1100 (4.1) 1993 (7.1)
Net non-monetary liabilities of RBI 1614462 2102 (0.1) 348804 (27.6) -42842 (-3.3) 2102 (0.1) -21682 (-1.6) -48160 (-3.5) 303860 (23.2)

Scheduled Commercial Banks’ Indicators ( ` Crore) Variation

Outstanding Over Month Over Year Financial Year So Far Financial Year
(As on 7 April) 2023 2021–22 2022–23 2020–21 2021–22 2022–23
Aggregate deposits 18450493 492136 (2.7) 1709228 (10.2) 275952 (1.7) 406579 (2.3) 993721 (7.9) 2897820 (21.4) 1578601 (9.6)
Demand 2212993 93824 (4.4) 185735 (9.2) -45488 (-2.2) 32563 (1.5) 105716 (7.0) 455743 (28.2) 107684 (5.2)
Time 16237499 398311 (2.5) 1523493 (10.4) 321440 (2.2) 374016 (2.4) 888005 (8.0) 2442077 (20.4) 1470917 (10.2)
Cash in hand 103977 331 (0.3) -92612 (-47.1) 110663 (128.8) 13714 (15.2) 12385 (16.5) -1335 (-1.5) 4337 (5.0)
Balance with RBI 804493 -6210 (-0.8) 130965 (19.4) -9909 (-1.4) -5414 (-0.7) -29521 (-5.2) 147251 (27.5) 126470 (18.5)
Investments 5523948 137443 (2.6) 767321 (16.1) 27679 (0.6) 108800 (2.0) 366292 (10.8) 981599 (26.2) 686200 (14.5)
of which: Government securities 5523174 137516 (2.6) 767385 (16.1) 27610 (0.6) 108852 (2.0) 359695 (10.6) 989482 (26.5) 686143 (14.5)
Bank credit 13845677 297009 (2.2) 1879804 (15.7) 74559 (0.6) 170442 (1.2) 496916 (5.1) 1622675 (15.8) 1783921 (15.0)
of which: Non-food credit 13824714 304324 (2.3) 1898675 (15.9) 89735 (0.8) 169384 (1.2) 486763 (5.0) 1619429 (15.9) 1819026 (15.4)

Capital Markets 28 April Month Year Financial Year So Far 2022–23 End of Financial Year
2023 Ago Ago Trough Peak Trough Peak 2020–21 2021–22 2022–23
S&P BSE SENSEX (Base: 1978–79=100) 61112 (6.2) 57614 57521 (15.7) 59106 61112 51360 63284 49009 (63.7) 57362 (18.4) 58992 (0.7)
S&P BSE-100 (Base: 1983–84=100) 18325 (3.3) 17180 17741 (18.0) 17645 18325 15563 19137 14689 (68.2) 17423 (20.1) 17602 (-0.7)
S&P BSE-200 (1989–90=100) 7709 (2.1) 7216 7552 (18.4) 7406 7709 6603 8145 6211 (71.1) 7412 (20.9) 7389 (-2.0)
CNX Nifty-50 (Base: 3 November 1995=1000) 18065 (4.8) 16952 17245 (16.0) 17398 18065 15294 18813 14507 (67.9) 17153 (19.7) 17360 (-0.6)
CNX Nifty-500 15220 (2.0) 14212 14914 (19.1) 14602 15220 12951 16004 12149 (73.7) 14652 (22.2) 14558 (-2.3)
Figures in brackets are percentage variations over the specified or over the comparable period of the previous year. | (-) = not relevant | - = not available | NS = new series | PE = provisional estimates
Comprehensive current economic statistics with regular weekly updates are available at: http://www.epwrf.in/currentstat.aspx.

66 may 6, 2023 vol lViii no 18 EPW Economic & Political Weekly