Where Angels Prey (14 page)

The completely unintended irony in the statement does not escape Chief Minister Sudhakar Reddy. As of last count, the said success has claimed close to sixty lives. He wonders if Thomas Warner, the $400-a-day development consultant deputed by the international donor, knows this.

The meeting in progress at the CM’s chambers is on the Universal Financial Inclusion Project, an international donor funded initiative implemented in collaboration with an apex development bank in India. After a pilot phase in three districts in Tamil Nadu and Maharashtra, they seek to expand to Andhra Pradesh and Karnataka. Besides Thomas Warner, there is his Indian counterpart, Rajesh Sharma, who probably gets paid half of what the American consultant does. Maybe in deference to that, he lets Warner do most of the talking. Principal Secretary Maruti Rao waits for the consultants to go through their pitch before offering his comments.

While Warner continues to highlight the Andhra Pradesh success story, the chief minister wonders how he should break it to them that they are planning to pull the plug on it. Ever since coalition politics has caused him to put a halt to the legal proceedings against the MFI top bosses, Sudhakar Reddy has been smarting. He has had to go through the ignominy of requesting MR to put on hold proceedings that he himself had authorized.

“Mr Warner, the state administration is trying to resolve some issues that have cropped up at the ground level, issues that you may have encountered yourself during your field visits. We will study in detail the approach paper that you have so kindly shared with us, so we can arrive at an understanding on the ways forward.”

The chief minister gathers his meandering thoughts as Maruti Rao smoothly brings the meeting to a close. Even as the consultants take their leave after a round of polite handshakes, the CM’s PA, Lokesh steps in with a rather harried expression.

“Sir, you are scheduled to meet the representatives of the employees’ union after lunch. But the collectors of Warangal and Ranga Reddy districts are already here, along with the CEO of TERP, Mr Rashid. They say it is imperative that they meet you at the earliest.”

Sudhakar Reddy looks at the Principal Secretary questioningly but the latter seems equally unaware. After instructing his PA to send in the bureaucrats right away, the chief minister sips from the fresh cup of coffee that has just been placed on his desk. It is close to lunch hour but obviously this meeting must take precedence over all else.

All three bureaucrats have almost identical expressions at this point—a mix of tension and nervous excitement. They greet the chief minister and principal secretary with due deference before Rashid takes the lead and apologizes for requesting a meeting without prior notice. “When Subba Rao Garu met me at my office earlier and shared the information with me, I thought it important to apprise you of things at the earliest,” he offers in explanation.

“I assume this has something to do with the microfinance sector?”

Maruti Rao’s question is more an observation, since the presence of Subba Rao and Veena Mehra is a clear pointer in that direction.

“Yes sir, it appears that Prasad Kamineni and company are not going to be spared after all!”

The chief minister looks closely at Veena Mehra as if to detect any hint of underlying sarcasm, but her face is wiped clean of any expression. He wonders if it is his imagination after all, prompted by the sense of failure that he has been grappling with.

Meanwhile, Maruti Rao prefers to get straight to the fact of the matter.

“Let us have the details.”

Subba Rao clears his throat, pulls out a sheaf of papers from a folder, and hands it to Maruti Rao.

“A copy of
The New York Post
article that is to be published tomorrow. Chandresh Rajan sent it for our information.”

Maruti Rao quickly scans the sheets before passing them on to the chief minister. Silence prevails for a while as everyone waits for him to read through the piece. Although his expression remains impassive throughout, the slight shift in body language is telling.

Finally he looks up and remarks to Subba Rao.

“They’ve left Prasad and Kumudini with nowhere to hide. Meticulously and thoroughly taken them apart! This is bound to raise a stink back in the US financial markets too. And the highly placed source that they have cited—is that you by any chance?”

Subba Rao hastily shakes his head. “I’ve known Chandresh for almost a decade now, sir. I did share the goings on at the ground with him, but certainly nothing else. The article is an eye opener for me as well!”

The chief minister nods in response before getting back to reading the report. After a few moments of silence, Maruti Rao clears his throat before addressing the chief minister.

“Do you anticipate some kind of political fallout? The article is clearly meant to expose Kamineni’s political connections and the money laundering that has been taking place in the name of foreign investment.”

The chief minister ponders over his question.

“I don’t think we can afford any kind of political fallout. And there are ways to explain away the political connections. I am sure you understand this very well, given your decades of experience in the government.”

There is a pause before the chief minister addresses Subba Rao again.

“When did you say this piece was coming out?”

“Tomorrow, sir.”

The chief minister turns to Maruti Rao.

“It is a good thing that this is an international publication. I guess we must be thankful for small mercies, Rao garu!”

Maruti nods in agreement.

The chief minister turns to Rashid.

“So, Rashid garu, what is the status on the draft report that I had requested?”

Rashid looks nervous.

“It is more or less ready, sir. I was planning to discuss it further with Subba Rao garu and Veena Mehra garu...then this matter came up.”

The chief minister notices the exchange of glances between Subba Rao and Veena Mehra.

“Political expediency might limit our power but it does not completely negate it!”

That is as candid a statement that the chief minister could have made while acknowledging the blockade on legal action against the MFI bosses.

The chief minister continues to address them in a resolute tone.

“Given that your districts have been the most affected by the crisis and given your intimate knowledge of the whole issue, I would like you to work closely with Rashid on this. Maruti Garu will then hold discussions with the law ministry and other relevant experts to ensure that we do not hit any kind of legal roadblock.”

It is apparent to Subba Rao and Veena that the chief minister has an ace up his sleeve. Meanwhile, Maruti Rao can sense the questions racing through their minds and smiles to himself. He is only too aware of the chief minister’s penchant for drama, how he likes to milk a situation for what it is worth before revealing any information he has.

“Should we go ahead and share our plans with them, Maruti Garu?”

Maruti Rao nods his assent, silently acknowledging the courtesy extended to him.

With an expression of utmost earnestness, the CM addresses his officials.

“The Government of Andhra Pradesh intends to promulgate an ordinance to regulate microfinance institutions. Every MFI in the state shall be mandated to register itself with the authorities in the districts of its operations. Henceforth, each of their transactions will come under scrutiny and will need to be cleared by the authorities. MFIs that use coercive methods of recovery will be made to face the music and violators will be imprisoned. No longer will the sector be allowed to fleece the poor of this state in the name of commercial microfinance, inclusive growth or any of the other pretty jargon that they’ve been peddling!”

Subba Rao and Veena exchange glances. Every single transaction? In the last couple of years alone, the top six MFIs in the state had disbursed a mindboggling 3.7 billion US dollars to as many as 30 million clients. They probably still have outstanding loans worth over 2 billion dollars in their collective kitty. The sheer volume of transactions that would come under scrutiny was staggering, to say the least!

“So, what do you think? We’ve got them on their knees, haven’t we?”

Veena would have chosen a more colourful expression but for present company. She looks at MR but his expression is inscrutable. She wonders if he is thinking what she is.

Does this mean the end of the microfinance sector in its present form? Is it really Game Over for the Kaminenis, Kumudinis and their ilk?

Chandresh stares blankly at the laptop screen. He has typed one measly line in the last hour. His deadline is just a few hours away, and he is still struggling with the direction his article needs to take.

Chandresh had been working on a story on the challenge posed by the Maoists to the state, and has travelled to districts in Madhya Pradesh, Chhattisgarh and finally Andhra Pradesh. The editor of one of the papers he writes for had called him and specifically requested him to do a story on the microfinance sector in the aftermath of the Andhra Pradesh MFI Moneylending Ordinance 2010. Chandresh had been one of those who had strongly endorsed the ordinance in the belief that it would put an end to the impunity with which the MFIs had gone after increased profit margins and investments at the cost of the lives of the very clients they had pledged to serve. The article he had written along with Bob had earned him the ire of the microfinance sector bosses, who had considered it to be the trigger for the enactment of the ordinance. On his part, Chandresh knew it would be both presumptuous and juvenile if he actually bought into the view. The ordinance may have followed soon after the article, but the legislation had already been a long time coming.

And yet, what a travesty it had all turned out to be!

Chandresh stares moodily at his computer screen as he recalls the elation that he had felt following
The New York
Post
article. It seemed that Kamineni and his ilk stood completely exposed. There had been political repercussions that went beyond the ordinance. There was an uproar in the parliament over the matter and Nageshwara Reddy had been forced to resign. Prasad Kamineni too had been made to quit the SAMMAAN board. When Chandresh’s sources informed him that the IPO plans of a couple of other MFIs, including Kumudini’s DevEx, had been indefinitely postponed, he had felt most gratified. It seemed that justice had been served. Nothing could make up for the lives lost but maybe their efforts would at least prevent further attempts at subverting the financial inclusion agenda and deriving extraordinary benefits from the disadvantaged and the poor. The stringent provisions of the ordinance and the increased state control and monitoring of the microfinance sector had effectively choked ground level operations. In all, it seemed that stories like that of Mylaram Kavala were a thing of the past.

The ordinance had also received the overwhelming support of the political classes—always eager to position themselves as champions of the poor, who formed the bulk of their vote bank. Enthused by the bureaucratic and political support, many of the poor clients flatly refused to repay their outstanding loans; some even turned violent with the collection agents. It was a delayed response to the exploitative practices adopted by the MFIs. However, they had not been ready to face the consequences of their actions. The outstanding loans, default history and poor credit rating made them unworthy in the eyes of credit bureaus. As a consequence, the millions of poor in Andhra Pradesh, whom the ordinance had hoped to protect, had ended up having defaulter labels stuck on them and found themselves completely excluded from the ambit of formal credit.

“The moneylenders are back! They are back again!”

This had been the refrain on the ground during his recent travels across the state. The poor had had to turn, yet again, to informal sources, and the much reviled moneylender made a triumphant return. In essence, all the combined efforts of the past had ended up driving the poor into the clutches of the very forces that they had sought to rescue them from. They were back to where they had been—or perhaps, they were even worse off, for their hopes had been built up in the interim, only to be belied. They had lost faith in the system that only seemed to push them further into an abyss of despair and exploitation. The knights in shining armour had turned out to be knaves and their trust and confidence had been shattered.

The information that Chandresh received a short while ago only served to corrode any remnants of confidence in the system and hope for justice.

Realizing that he is not going to get any work done in the black mood that he is presently in, Chandresh decides to step out for a smoke.

He strolls over to the tea shop across from the hotel. After asking for a cup of strong tea, he lights up and takes a deep puff on his cigarette. His eyes are drawn to the bench by the side of the shop and he recalls his meeting with the old Maoist during his last visit. It feels almost like another lifetime now.

He vividly recalls the flash of anger in the old man’s eyes as he spoke of his landlord and his exploitative ways. The larger problem had remained: the lack of equitable access to resources had been the bane of the poor then and remained so now. The oppressors, like shape shifters, merely changed in form over time. Given the lack of access to education and resources, the poor continued to be at the mercy of these forces in their various forms.

As Chandresh stares moodily at the bench that he had shared with the old Maoist, his phone rings. Bob’s voice booms into his ear.

“Hey Chan, I have some real good news for you!”

In his current sluggish frame of mind, Chandresh cannot think of a single reason for cheer.

“Hello Bob, good to hear you’re in such high spirits. I sure could use some cheering up right now!”

“Chan, is everything alright? Is there a problem? Anything I can do to help?”

Chandresh smiles in spite of himself.

“Nothing more than a bout of professional blues, Bob. But go on...spill the beans?”

“I have just the news to dispel the blues, Chan. Our story has been nominated for the Simpson prize in the best investigative report category!”

Chandresh is not sure how to respond. Little does Bob know, he just added to his dark mood.

“Oh really...I suppose that is a good thing then.”

There is a pause as Bob possibly tries to process Chandresh’s unenthusiastic response.

“Chan, what is going on?”

“Nothing much, Bob. In fact, nothing at all. The sector’s activities in the state have come to a grinding halt. The poor are being excluded by formal financial institutions all over again, and, guess what, the oppressive, usurious informal moneylender is back in business.”

There is another pause—this time Bob is at a loss for words.

“I wouldn’t go so far as to say that our report made this happen—that would make me delusional—but I am left wondering what we...I mean, what our report has really achieved. Like an old man once told me: You probably get paid well for your efforts and maybe even get some awards. But that’s not much comfort for the people whose miseries you bare in print.”

Chandresh closes his eyes, fighting against the tears of impotent rage that threaten to spill out.

“Chan, I assume you are referring to Nageshwara Reddy making an entry back into your central Cabinet. The gross illegality of transactions we exposed, the wilful attempts to subvert due process, all of it was made to bite the dust in the face of political expediency! Believe me, this is hardly the first time I have seen my efforts serve no great purpose.”

Chandresh laughs dryly.

“You haven’t heard it all, Bob. There is more good news in store.”

Chandresh can almost hear Bob’s mind racing as he speculates on Chandresh’s words.

He takes a deep breath before he delivers the coup de grace.

“SAMMAAN and DevEx have both been granted banking licenses. They’ve been reinstated with greater powers and glory so they can have another go at their aborted agendas. It’s business as usual for Kamineni, Kumudini and their brethren, Bob! Long live truth and justice!”