Page 46 - Banking Finance December 2019

FEATURE

HOW JAIPUR
HOW JAIPUR
HOW JAIPUR
HOW JAIPUR
HOW JAIPUR
BECAME AN
BECAME AN
BECAME AN
BECAME AN
BECAME AN
ECONOMIC
ECONOMIC
ECONOMIC
ECONOMIC
ECONOMIC
CRIMES HUB
CRIMES HUB
CRIMES HUB
CRIMES HUB
CRIMES HUB
B ang in the middle of one of Jaipur's busiest and fraud) in the country, pushing the more populous Uttar

Pradesh to second place.
arterial streets, the Sansar Chandra Road, is a
modest office cradled on to the corner of a three-
storey building. The entryway, covered up with
crime capital? And what does it say about the nature of
an array of notices, was sealed shut. The office How and why did Jaipur become the country's economic
itself is devoid of activity, but outside a small group had economic transformation that is currently under way in
gathered after a protest in front of the city's Securities and India's emerging cities?
Exchange Board of India branch.
In Jaipur, men like Singh, the farmer from Dausa, have been
Sanjay Singh, 45, from Dausa and Madan Singh Yadav from wondering why there haven't been many street protests
Udaipur, both small-time investors, had showed up to see if despite a recent spate of chit-fund scams in the desert state.
anybody could tell them anything about their now-lost Rs 15 "Maybe the people who have invested in these chit-funds
lakh. Once upon a time, the office belonged to Pearl Agrotech are moneyed and from the upper middle class.?Probably, the
Corp. Ltd (PACL), a credit cooperative society. Now, the only money lost is something they can deal with," says Singh.
remaining evidence of its existence is in the form of a few
nameplates, in the stairwell or next to the elevator. The tentative government estimate of investor losses is
upwards of Rs 1,000 crore. But nobody knows for certain yet.
The PACL scam amounting to an estimated Rs 49,100 crore- Beyond the sums of money involved, however, lies a simple
considered to be one of the biggest chit-fund scams in the question: why is this happening in Rajasthan and why now?
country affecting nearly 56 million investors-hides a larger
tale about a silent transformation that has been under way Chit-fund scams and Ponzi schemes are of course nothing new
in Rajasthan. to India. Despite strident efforts to turn more Indians into
bank account holders, over half of the respondents in the most
Hints about that hidden tale tumbled out a few weeks ago recent government-backed financial inclusion survey said they
when the National Crime Records Bureau (NCRB) released prefer to keep their savings at home. Combine that with poor
its long-delayed 2017 report documenting the nature of financial literacy (only 11% had "good" financial literacy,
crimes across the country. Surprisingly, the rate of economic according to the National Bank for Agriculture and Rural
crimes (cases per 100,000 people) in Rajasthan's capital city, Development survey) and it creates a potent mix. Scams have
Jaipur, topped even Delhi and Mumbai. inevitably rippled through every part of the country from
southern Tamil Nadu to West Bengal, where the Saradha
Despite having only one-sixth of the population of Mumbai, scam exploded into a political scandal in 2013.
the pink city recorded almost as many cases of economic
offences as the country's financial capital (about 4,400 or The origins
12 cases a day). In 2017, Rajasthan?also accounted for the Due to its proximity to several economic corridors, in
highest share of economic crimes (cases of forgery, cheating Rajasthan, the credit bubble was inevitably linked to land,

46 | 2019 | DECEMBER | BANKING FINANCE