Second-year Saradha lessons
Why they can't be wished away

DEVADEEP PUROHIT

When Mamata Banerjee completes two years in the chief minister's chair on Monday, little will capture the challenge facing her and Bengal more than the Saradha default crisis.

If the lives and deposits lost chronicle the human tragedy, the roots of the scandal point to a structural malaise that "poriborton" has not addressed yet.

While Saradha has emerged as the villain of the piece, a more fundamental factor has been ignored. Lack of jobs, Bengal's single biggest problem, has made the soil fertile for companies like Saradha to strike deep roots — so much so that they employ more people than the Mamata government.

How Bengal reached such a pass is a story of failures on multiple fronts.

The chief minister has been claiming success in creating jobs — 10 lakh on last count — but she has been silent about the shrinking employment opportunities in Bengal.

Mamata alone cannot be blamed for the situation as she has come to power after 34 years of Left rule. The situation was by no means drastically different during the earlier regime.

But, by Mamata's own acknowledgement on Facebook on the eve of the second anniversary of her government, the "massive mandate" of 2011 was to "usher inporiborton".

Still, there is no admission of the problems at hand and, more important, there are no visible efforts to address them.

"One can plan action only if there is an acknowledgement of the problem…. No one in the government wants to discuss how job opportunities are shrinking in Bengal," said a senior official.

While the topic has remained a taboo, the signals have been loud and clear.

One of the biggest indicators of the unemployment problem is the rush for government jobs (see chart) for which several examinations were held in the past two years. That the bulk of the workforce remains unemployed or under-employed in the state became clear in these exams, where postgraduates queued up for the post of constable, for which the minimum qualification was higher secondary.

"The number of applicants for the post of junior constables came as a surprise…. Besides, we have never got such huge numbers of candidates with MA, MSc degrees," said a police officer.

The rush to be a teacher — both at primary and secondary levels — also reinforced the same point.

The lack of employment opportunities in Bengal is also apparent from the slowing down of two key sectors, industry and agriculture, over the years.

The figures reveal a steady slowdown in agriculture in the past few years — a trend that the Trinamul government has failed to arrest. The government, however, has been claiming that the rate of growth of the state economy — and also agriculture, industry and services — has been higher than the national average in 2012-13.

Similarly, the government has been crowing about its record procurement of rice — 20.5 lakh tonnes in the last kharif season — at a time the Commission for Agricultural Costs and Prices (CACP) has raised questions about the procurement policies in eastern states, including Bengal. According to CACP estimates, the return on paddy cultivation in Bengal, based on the minimum support price — the price offered by the government to farmers — has turned negative. For every Rs 100 spent, only Rs 87.14 can be recovered.

The direct fallout of this has been a decline in rice production over the years, which doesn't augur well for a state that used to boast self-reliance on the grain.

If these numbers are viewed against the backdrop of estimates based on the latest National Sample Survey data, which have recorded a negative growth (-0.4 per cent) in agricultural employment between 2004-05 and 2008-09, it becomes clear that the rural populace has been scouting for other sources of livelihood.

"Rice cultivation has become a loss-making proposition…. There are no industries here. People in our district have joined the chit funds (the erroneous but popular label for companies such as Saradha) in hordes as agents. It is the only industry that has grown in Bengal," said Kanishka Panda, one of the general secretaries of the Congress in East Midnapore.

East Midnapore — other than North and South 24-Parganas — has the highest number of victims of the Saradha default. The Telegraph had earlier reported that over 280 deposit mobilising companies have been running their business in the district.

Investigations into the Saradha scandal have revealed that the company had over 2.84 lakh agents. If the number of agents in other similar companies — the Centre has published a list of 73 entities in the state which are facing complaints — is estimated, the total number of agents connected in the business of deposit mobilisation will surpass the number of government employees in Bengal.

The top five or six deposit-mobilising companies are reported to have in excess of 1 lakh agents each. The state government, on the other hand, has over 10 lakh employees on its rolls.

Not just the agents, if the numbers of these companies' employees on their rolls and depositors are added, the numbers of people connected to such deposit mobilising companies runs into crores — a clear indication of the Bengal economy's dependence on such companies.

"I joined one of the bigger money marketing companies after refusing at least 10 such similar offers as I was not getting jobs in the industry," said a young employee of a deposit mobilising company.

The slowdown in industrial growth, along with poor performance in implementation of industrial projects, explain why opportunities for regular salaried employment in the non-agricultural sector have been few and far between in the past few years.

Before the 2011 Assembly polls, Mamata had said in her manifesto that her government would work towards industrial resurgence in Bengal, but the promise has remained only on paper.

A gamut of problems — ranging from the hands-off land policy to multiple Trinamul trade unions in factories — is being cited as constraints for growth of industry even as the government has claimed that investment proposals worth over Rs 1.12 lakh crore were received since May 2011. The government has not given a break-up of the proposals.

According to the head of a city-based chamber, the draft industrial policy – which was made public yesterday – should have tried to address industry's concerns about availability of land.

"It is almost certain that unless industrial investment peaks, regular salaried employment will not grow. But as of now, the government has not made any such efforts," he added.

The problem of unemployment or under-employment in agriculture also requires urgent attention by the government, which cannot be achieved by organising events like Maati Utsav.

"The government will have to ensure remunerative price for farmers and should also address the problems emanating from high fertiliser prices…. Besides, the government should also channel investments into this sector to create facilities so that farmers don't leave agriculture," said Subhanil Chowdhury, assistant professor of economics at the Institute of Development Studies in Calcutta.

According to him, the lack of incentives in agriculture has resulted in over 3.5 lakh cultivators quitting agriculture in search of other vocations over a decade.

If the Maa-Mati-Manush government does not reverse the trend, it will only drive more youths into the hands of more Saradhas.