Sharad Pawar has asked farmers not to repay the loans given by the money lenders. Worse still he is planning to create a militia out of his party workers to neutralize the money lenders who still insist for repayment.
This stupid and irresponsible act should be stopped ASAP. Moneylenders, inspite of all their vices are an important part of the Indian society. They provide quick loans and short term credit to those who need it.
Indian banks often do not cater to people who live on daily wages. Micro credit organizations, in spite of all the hullah gullah demand very cumbersome and stringent rules. The poor need to organize themselves in groups, take collective responsibility for all the members in the group etc. In contrast, these money lenders don’t ask for any complicated compliance, they are ready to give whatever amount you want, whenever you want and have no foreclosure penalty. If you can produce some sort of surety (preferably in gold), the interest rates which the money lenders charge is less than what is charged by Micro-Credit organizations.
Indian banks are still living in the communistic era where they were a instrument to suck up all liquidity from the poor. Post offices, co-operations and banks still exist for the sole purpose of taking money/deposits from the poor and lending to the rich. However what India and esp its poor need is totally opposite. Flow of capital from those who have in excess to those who need it. So essentially, these individuals are a cost effective, simple solution to all the shortcomings of our fledging banking system.
If this call for large scale defaults and dismantling of the Money Lending business gains momentum (and there is no reason why it won’t), then the poor and entrepreneurs won’t get credit in time and at terms they want. They won’t be able to earn their living, expand their operations, get money for medical emergencies, or to pursue a trade which they know would be lucrative. So essentially Sharad Pawar is condemning the poor for eternal damnation.