Day 16 -February 14, 2011 Bargarh, Sambalpur, Orissa

Shodh Yatra Day 16 –  February 14, 2011     Bargarh and Sambalpur, Orissa


This is the northwestern most district of Orissa, and I enter the state through it from Chhattisgarh.

Saree Weavers, Barahaguda village

The Bargarh-Sambalpur area is well known for a distinct style of handloom weaving, based on warp and weft colouring.  The region has thousands of weavers,  In Barahaguda village alone, there are over 100 households engaged in weaving sarees.  The cost for a pair of sarees (weaving process is for a pair) was worked out as follows: It takes two days time for three persons (usually family members) i.e.  6 man days for making  two sarees (each of 5.5 mtrs length and 1.4 mtrs width).  The material cost @Rs.300 per saree x 2 = Rs. 600.  The selling price is Rs 800 per saree or Rs.1600.  Thus the margin is  Rs. 900. Thus, per person per day earning amounts to Rs. 150.

Saree designs and color combination are mainly on market demand. All finished products are sold in the nearby weekly haat on every Friday at a place called Balijuri, 8 km away from the village. The weekly haat operates between 4 am till 10 am and thousands of weavers sell their finished products.

Met a weaver, “Doctor” Meher. He owns half an acre of land which he has given on share cropping  and he receives 8 bags/crop ( two crops in a year). Normal yield per acre is 30 bags (each bag of 75 kgs). Meher has an account with cooperative. He has not availed any loan so far. But he mentioned that the prevailing interest rate in the village is between 3-5% pm.  The Government of Orissa has done health insurance for all weavers. The “reverse bid” was won by ICICI Lombard, implying that it charges the least premium to the Government, for providing the specified level of insurance.

Maa Panarapa SHG

This SHG was formed ten years ago and comprises of 12 women tribal members. Out of 12 women members, six have average land of half an acre land and the rest six do not have any land.  Each member saves Rs.30 per month. After saving about Rs 10,000 they received a revolving fund loan of Rs 25,000 from  the bank branch nearby. The SHG availed a loan of Rs 3 lakh three years ago from Indian Bank for leaf plate making and took Rs 1 lakh from BASIX last yea to add to their inventory. Besides this activity, the group is also engaged in nursery-raising, kerosene selling, and collecting electricity bills. We met Mrs. Manjari Devi, President of the group and Mrs. Nandini Swain, secretary.

They explained the economic to us.  One bundle (100 leaves) cost Rs.13.50 (inclusive of permit charges and transport cost), and it costs another Rs 2 per bundle to make leaf plates.  They sell it at a price of Rs 20 per bundle, making a profit of Rs.4.50/bundle.  One person can make 2500 pressed leaf plates in 6 hours, which is machine operated i.e 60 to 65 bundles a day and can earn Rs. 120 to 130 a day. Peak season is from December to March and lean season is from October to June. During peak season, SHG earning goes up to Rs. 80,000. All the finished products are sold in Bargarh. Last year transaction was of Rs 400,000 and profit Rs 100,000, according to  Madhab Bhola. Electricity bill collection amounts to Rs.22,000, reading and deposit charge is Rs.13/bill. Earning from nursery of teak plant is about Rs.20,000 per annum excluding labor charges. Peak season is March to July.

Lingaraj Pradhan, National President of Samajwadi Jana Parishad

Ligaraj is from the prestigious Jawaharlal Nehru University, Delhi which sends most of its post-graduates to the civil services, the media, academia, NGOs and politics.  Among the well-known political leaders from JNU are Prakash Karat and Sitaram Yechury of the CPM and Ashok Tanwar of NSUI, now a Conress MP.  More recently, Mihir Shah was appointed as a member of the Planning Commission, in recognition of his work with tribals in the Dewas disrtrict, through the NGO Samaj Pragati Sahayog Samiti.   Lingaraj began work with non-party political formations such as farmers’ movements and tribal agitations, on local issues such as displacement due to development projects.

I asked him if he knew Sunil of Kesla block in Hoshangabad,  who used to work next door to the PRADAN project we had started there in the mid 1980s.  Lingaraj not only knew Sunil but gave me an update on his work with the fishermen of the Tawa Dam, and even gave me his mobie number.  Then Lingaraj asked me a few questions about myself, the Shodh Yatra, about microfinance and MFIs and said that though he had heard of the adverse situation in AP, he felt MFIs should be allowed to work as no bank was reaching the majority of the people. However, MFIs should cut their interest rates as much as possible.

Lingaraj joined the Samajwadi Jana Parishad which was set up by Kishan Pattanaik, a follower of socialist Ram Manohar Lohia.  Lingaraj contested the last assembly election and got 22,000 votes. He contested with a view to increase the political awareness of party and to increase visibility of party.  I was very impressed by his commitment and transparency.

I was reminded of another person, Jatish Chandra Mohanty, an AP cadre IAS (Indian Administrative Service, India’s elite civil service) officer from Orissa, who quit the IAS in 2007 and came back to Orissa state.  He has also established a party called Samruddh Odisha, and had put up a large number of candidates for the last assembly elections.  Unfortunately, they all lost, as did Mohanty, but that has not reduced the urge to be in politics in him.  I make a note to call him and see if we can meet.

NGO meet at Sambalpur

My colleagues had arranged a meeting with a few NGOs in the Sambalpur-Bargarh area.  I met seven of them in the evening.  After introductions, I talked about the Shodh Yatra and its purpose.  Present were Pradeep K Behera of ADARSA, Ashok Kumar, Chakradhar Manda and Sanjeeb of SARC, Asish John Kumar of ANGEL,  Binodini Mahapatra of AJKA, Kalpana Dash of  WACSS and Abhiram Panigrahi of SIDI . Many of them were engaged in microfinance themselves and others were considering it.  We discussed about the widespread view that MFIs are like money lenders. Is it due to interest rates? Or is it due to over-lending in the quest for building up their loan books by MFIs in the last two three years? Or is it because some MFIs are so highly profitable that their promoters, investors, and employees make an enormous amount of money?  It is not enough to say, “we did not do this”.  We all are answerable for the actions of a few, since by not questioning those actions, we have accepted them.   It was agreed that we all need to focus on holistic development.

Meeting with Sambalpur University  faculty

Dr Poojari, Vice-Chancellor, introduced Dr Rath, Registrar and Economist,  Dr Mrs Padma Gahan, Professor of Finance and Head of Management Department,  Dr Kailas Sarap , Head of Economics Department,  Dr Mrs Pramanik, an anthroplogist and a faculty member from the Social Work Department and Mr Panda, the Placement Officer.  The university has about 200+ colleges affiliated to it from 10 districts, mainly from forest and tribal dominated regions. It is a peaceful and research oriented university and performance is based on mainly science research. He talked about the fact that most industries in the area are mainly material based (mining) and a lot of issues pertaining to water, environment and rehabilitation.

I talked about why I am undertaking the Shodh Yatra  – an enquiry into the lives and livelihoods of poor people. I also explained about BASIX group of companies.

Prof Padma Gahan, Head of Department of Management described different courses in the MBA programs, specially on finance and control, since the demand for these course is high with half of the class have opted for the same as  an elective. Earlier the capacity of the MBA program was only 16 seats and now it has gone up to 90. There is still more demand to increase number of seats, specializing in finance courses.

Prof Kailas Sarap, Head of the Economics Department, talked about the rural money lending system. Interest rates charged are exorbitant and normal is 5% per month. Rural people must have access to finance. Though the government talks of financial inclusion, banks seek collateral even for small loans.  He talked about empowerment of women through promotion of SHGs and carrying out income generating activities.. There are about 3,67,000 SHGs in Orissa. About 20% avail credit from NGOs, 60% from Mission Shakti and  the rest from money lenders. Informal rate of interest in Orissa is 5% pm.

See video link for Prof Sarap’s views on Microfinance

Prof Poojari then asked me what suggestions I had for the University? I said, based on my experience of serving on the Boards of IRMA and the IIFM, the diversity of disciplines and the proximity to a major engineering college, the University could be a centre for the study of environment and tribals. The University is best situated to answer a number of questions relevant to the tribals of Orissa, Jharkhand, West Bengal and Chhattisgarh. Questions such as – “How to bring balance between mineral extraction, forest preservation,  and maintaining the lifestyle of tribal people?”

At present the debate is so polarized, that if the Environment Minister says yes to an industrial project, then it is assumed that he has taken a  bribe.  And if he says  no, then he is called an environmental fundamentalist . The role of the University should be illuminate these questions and the difficult choices underlying them. Fieldwork and classroom teaching can join together, blending practice and theory. There should be seminars and conferences on such issues, and eventually a periodical journal can be published.

Prof Poojari responded to these suggestions enthusiastically and said he would propose the setting up am inter-disciplinary Centre for Livelihoods and the Environment.  I offered him all support from The Livelihood School and CTRAN.

** Sankar and Ashok – pls follow up with Prof Poojari.

Visits to BSFL Units (Branch Offices) in Bargarh and Sambalpur

Bhartiya Samruddhi Finance Ltd (BSFL) is the flagship non-bank finance company of the BASIX group, and so much larger and widespread than the others, that it is often referred to as BASIX. Though there were BSFL Units in Wardha, Nagpur, Bhandara,  Rajnandgaon, Dhamtari and Mahasamund,  I had not  visited them at all, meeting the staff along the course of my Yatra.  In Gondia, Raipur and  Saraipalli, I did go to the Unist but did not address the staff as a group.  But at Bargarh, when I reached the Unit office in the morning, I found the entire BSFL staff was lined up to meet me. So I sat down to talk to them.

Why the Shodh Yatra?  “An attempt to meet with people, particularly the Aam Aadmi and understand their lives and livelihoods.”  Why did I need to this, after 30 years in development work?  “Partly because I had been wanting to do this since 2009, the centennial year of Gandhiji’s booklet Hind Swaraj”. Suddenly, I feel I am out of touch with the audience.  So I ask – “How many of you have heard of Gandhiji’s Hind Swaraj, please raise your hand?”  Not one hand was raised from the thirty odd young people in front of me, at least a third of whom must be post-graduates.  To be sure, I had Manoj repeat the question in Oriya. Not one had heard of Hind Swaraj.

And yet, that booklet is perhaps the one that has the key to the trilemma of the twentieth century – the trade-off between growth, equity and environmental sustainability.  Feeling weak in the heart, I ask Naveen to bring both the Hindi and English version of the booklet from my rucksack and pass it around, while I try to summarise the key argument of Hind Swaraj  – that no amount of material development will eventually lead to development, and true development will come through spiritual  advancement of man.  Thus for Gandhiji, Swaraj would be useless if it merely meant that the colonial rule is replaced by Indians ruling themselves (swa-raj or self-rule) but without being guided by higher spiritual principles.  For him Swaraj meant “raj” over ”swa”  or self-control.

I see I am not cutting much ice with the audience.  So I turn to my other reason for the Shodh Yatra -trying to rethink microfinance after the AP crisis.  What did we do, as a sector, which was so wrong that there is widespread revulsion against MFIs, even in Orissa?  More specifically, though we say we are different in BASIX, in practice, how different are we? Is our livelihood triad strategy really reaching into the field and if it is, how much difference is it making to the customers? Even if they appreciate we are different and beneficial, are they able to resist the temptation of not repaying their loan when there is widespread default? I then turn to their concerns at hand – will the company survive, will they still have their jobs?  I assure them that we will weather the crisis, and use the slogan “BASIX Buland Hai, BASIX Buland Rahega”.  The meeting ends with some enthusiasm coming back to their faces, but I am not satisfied.

In the evening, I repeat the performance in the Sambalpur Unit, where over 50 staff members are present. I find them dispirited.  I ask why?  One of the Livelihood Service Advisors (LSAs) as our frontline field staff is called, stands up and says “Sir, I have nine villages with me and in four of them, no borrower is repaying for the last two months.” What is the reason they give? “There are many villages near the Attabira town, which has a lot of Andhra settlers.  Those people have spread the news that in AP, nobody is repaying MFIs, so they can stop here also.”  Another Field Executive got up and said, “Sir, this was just a rumour for a while but when the OTV (Oriya language TV channel) program Jano Manch had a discussion on microfinance, the lady from AIDWA, the All India Democratic Women’s Association (the womens’ wing of the Communist Party, Marxist) said all MFIs are charging 60 percent interest rate and they are harassing women for repayments, so women are justified in not repaying. After that, most borrowers stopped repaying in these villages.” 

After hearing these problems, and looking at the low morale of the BSFL team members, I decided to change my schedule.  I  decided that I will visit some of these villages in Sambalpur next day instead of going to the Simlipal wild life sanctuary, where we have been working in 22 villages to promote alternate livelihoods for families who are living on the buffer zone and fringes of this Tiger Reserve. In the absence of alternatives, their dependency on  Simlipal is creating tremendous pressure on the park.

As there were nine badly affected villages in the Sambalpur Unit, we decided to make three teams, one going with me, one with Pradip Mahapatra, head of Orissa operations till recently and one with Manoj, who is also quite senior and experienced in tackling difficult portfolios.  I asked Naveen, my Telugu speaking assistant, who had joined me for a few days, to visit the Attabira town and talk to the Andhra settlers and see what they have to say. We agree to meet in the Sambalpur Unit office the next evening by 5 pm for a debriefing.

I looked at the watch.  It was 9 PM.  It was time to go to the town hotel, wash clothes and then settle down to write the blog.  I must say I am finding it hard to keep up with the blog, as it often takes till past midnight before I finish.  Writing takes time, but uploads of pictures take forever, given the slow speed wireless internet one gets in most places. But I am not complaining!


About vijaymahajan

Educated at St XaviersSchool, Jaipur; IIT Delhi; IIM Ahmedabad and Woodrow Wilson School, Princeton University, USA; Co-founder of several development organisations - BASIX (, PRADAN (, Development Finance Forum (, Andhra Pradesh Mahila Abhivruddhi Society (, Sa-Dhan ( and the Microfinance Institutions Networrk ( Chair of CGAP Excom; BASIX Boards; DSC Board; Board member of MSSRF, ASSEFA, Gram Vikas Honours - WEF Davos Schwab Social Entrepreneur; Ashoka Global Fellow; IIT Delhi Distinguished Alumni Award; HSBC-Access Award for Outstanding Contribution to Microfinance in India; listed among India's top 50 most powerful people in India by BusinessWeek, Asia edition, 2010 Married to Savita, Deputy Dean, ISB, Hyderabad; two children, Chirag and Chandni
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2 Responses to Day 16 -February 14, 2011 Bargarh, Sambalpur, Orissa

  1. vivek says:

    I was amazed to read that Gandhi’s Hind Swaraj ‘has the key to the trilemma of the twentieth century – the trade-off between growth, equity and environmental sustainability.’
    I can’t doubt that the author is sincere in saying this. But what light does that throw upon such a senior figure- one moreover of the highest education and intelligence?
    I suppose, on the positive side, it clears the gentleman of the suspicion of being a crook by affirming he is merely a crank. On the negative side, it shows how people of my generation, education and class have been complicit in foisting a particularly mischievous ‘availability cascade’ upon simple people in the boondocks.
    Suddenly the Maoists don’t look so bad. In economics, whereas agents make rational choices when pursuing self-interest- and whole classes, too, can do so under certain circumstances- the moment a person from one class foists his or her romantic world-view upon someone else and counsels them to make decisions to conform to that template, the result is hypocrisy.
    I can now see why, just as the khaddar gandhi-cap came to symbolize political corruption, so too will Microfinance become a synonym for loan sharking of the worst type.

  2. I’m not certain the place you are getting your information, but great topic. I must spend a while finding out more or working out more. Thank you for wonderful info I was searching for this info for my mission.

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