📰 Publication of “A crisis like no other”

The final report on the “Depleted by debt” project in South India is now available.

The COVID-19 pandemic worsened the long-standing problems of debt distress and food insecurity already impacting households in rural Tamil Nadu. This report explains the gendered and caste-based dynamics of these crises as they unfolded in one of India’s most populous states and provides 3 policy recommendations:

1. Financial inclusion policies need a critical re-think. The extent of household debt remains largely understated. While so-called financial inclusion policies focus on providing loans to combat so-called “credit rationing,” policy makers should be concerned about the burden of debt and over-indebtedness. These threaten the very survival of families, forcing them to cutback on food (and health) expenditures to meet repayments.
2. Debt cancellation. Women’s excessive responsibility for debt should also be a concern. Of all the measures implemented during the pandemic to improve the situation of women, in India and elsewhere, none has addressed women’s debt and over-indebtedness. Thinking about debt cancellation measures, along with farmers and the private sector, should be a priority. It is then necessary to design services that are better adapted to the constraints of rural families in terms of cost and flexibility. More fundamentally, the sources of indebtedness must be addressed: inadequate health services, the cost of education, and irregular and low employment income.
3. Food sovereignty. Questioning the uneven resilience of village economies must be a priority. The pandemic and the lockdowns have highlighted the dramatic consequences of the lack of food sovereignty and dependence on commercial agricultural chains promoted through climate adaptation policy, and the need to encourage a return to subsistence agriculture that can feed families.

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