Page 47 - Banking Finance December 2019

FEATURE

at least initially. PACL's business model, for example, was to good faith without documents, he says. This parallel, informal
buy tracts of agricultural land using investor funds and hope economy, which is more common in a tier-II city like Jaipur, was
for a swift appreciation in value. It worked well as long as severely hit by demonetization. The unreturned loans have also
land prices soared. And then came demonetization. resulted in cheating and fraud cases.

The widely-held perception in Jaipur's business community Shifts in local economy
is that once the real estate-fuelled economic growth bubble Jaipur with a population of about 3 million (2011 Census) has
went bust around 2016-17, people who used to invest in land always been a thriving city. Jewellery, gemstone cutting,
began to park surplus money in credit cooperative societies, textiles, mining, the mineral and stone industry, automobiles,
which promised roughly the same returns that land and information technology have spurred the economic
speculation used to. Here, the Rajasthanis' innate ability to growth of this tier-II city. Trade and commerce have also
take risks came into play.
played vital roles in the financial growth of the city.

"Rajasthanis are genetically disposed to accumulate wealth Garima Dhabhai, a political science professor at Kolkata's
despite the desert conditions-to make money out of nothing. Presidency University who has worked?extensively on the
Personal wealth creation comes naturally to them," says D. transformation of Jaipur after the 1991 economic liberalization,
K. Taknet, author of The Marwari Heritage and a business says: "Jaipur's economy saw its first transition in the late-1940s
historian.
due to an influx of Partition refugees from Sindh and Punjab.
The coming of the Sindhis also marked a departure from the
Insiders in Rajasthan's state police department say that erstwhile craft-based economy to trading."
around 2016-17, the rate of economic offences started to
spike. Police claim that several key players in the erstwhile The second major transition came in the 2000s. Because of
booming real estate sector, which was filled with a network good connectivity and its prized location within the Golden
of dubious people, spilled on to other fields-with some even Triangle, Jaipur witnessed a real estate boom after the turn
launching credit cooperative societies of their own. The of the century. Many educational, IT hubs, ultra-modern
number of those duped over the past few years in the state commercial and retail complexes, and luxury apartments
is now estimated to be more than 500,000.
came up rapidly. It became a lucrative destination for both
property developers and investors.
The government machinery responded by launching one of
the country's first-ever portals meant to make the process Land and real estate prices got artificially inflated despite not
of lodging complaints against credit societies easier. "The being rooted in any material economic output. Once the land
complaints of non-payment of dues by these credit societies bubble burst in the 2010s, investors stopped chasing real estate.
began to come in from November-December, 2018. We And with banks having reduced their interest rates drastically,
took the case to the Special Operations Group, who people naturally veered towards credit cooperative societies,
unearthed the scam in May-June this year," says Neeraj K. who offered quick money and hefty returns.
Pavan, registrar of the state's cooperative department.
"Rajasthanis have always been risk-takers. So, a little money
Only about 5,000 complaints have been lodged till now lost here and there is ingrained in their DNA," says Sanjay
though, which is a drop in the bucket, says Otaram Kaushik, a tourism professional trained in economics. "Even
Choudhry, nodal officer who is manning the website. the unfolding of the credit cooperative scams has not stirred
the people enough. They have not been united to approach
But the police insist that filing complaints in Rajasthan is any political leader to turn it into a bigger issue. My father-
fairly easy compared to many other states.?Ashok Kumar in-law has lost quite a large amount but he is not inclined
Gupta, additional commissioner, crime (economic offences), to file a complaint."
said that one of the reasons Jaipur may have topped the
charts in the NCRB report is because a large number of cases That is true for 82-year-old Vishwanath Agarwal too. Even
are obviously being registered. he has not bothered to file his complaint on the government
portal. Ever since he retired 23 years ago, Agarwal has
Policemen like Gupta also say the unfolding chit-fund scam may never been a worried man. With his pension and savings
only be part of the explanation. Money here is often loaned on intact, life was never difficult, at least financially.

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