Financial Crisis, Mental Health and ...

The current financial meltdown, with its epicenter in the United States, has been having serious global repercussions. The 30-share sensitive index (Sensex) of the Bombay Stock Exchange which had peaked to 21,206.77 in January 10, 2008 has fallen to 7,697.39 at 1330 hours before stabilizing at 8509.56 by the end of the day on October 27, 2008. On the eve of Diwali (October 28, 2008), this belies hope.

This will have serious implications on the mental health of the population. Particularly so, for those directly involved in the financial/stock market. There are already indications that sale of over-the-counter anti-depressants have increased. A possible fallout is increase in incidence of self-harm (suicides). The earlier East Asian Crisis and earlier financial crisis are witness to such occurrences. In India, as well as elsewhere, the public health system, the medical fraternity (particularly Psychiatrists) and other civil society groups like The Samaritans, Mumbai. Sooner or later such incidences would come to the media's notice. Before reporting, they should have a look at the World Health Organization's Preventing Suicides: A resource for Media Persons.

True, despite the unprecedented fall in the Sensex, the levels are still around what was reigning in October 2005. Some say, the correction was necessary, as the higher levels was more on account of an hype in the financial sector, rather than being in sync with good fundamentals in the real sector. It is the unregulated greed that has led to this situation.

A question that comes to mind is why such a fall would be associated with mental health leading to self-harm. An anecdote cited in some discussions on farmers' suicides would help. A farmer while comparing his situation to that of a labourer indicated that the latter has been living under dire circumstances, and of course needs attention, but our situation is akin to a fall in level. Recourse to self-harm is complex and multifaceted. But, if reductions in level is one of the risk factors then this is definitely the case with the current financial crisis.

It is also worth mentioning that the current financial crisis, the ethnic strife that one sees within the country as also elsewhere in the world, and the larger agrarian crisis which manifested in a food crisis globally are not independent occurrences. They are part of the larger scheme of things, which as some commentators say, involves displacement of people as well as displacement of ideas.

The agrarian/food crisis and the ethnic strife do reflect that something is fundamentally wrong in the real sector; it is not people-centric. The problem was accepted, but instead of addressing the problem the solutions tried to address the symptoms. Or, to put it in a different perspective, the emphasis was on means rather than the ends. To conclude, one would state "Business as usual is no longer an option." (IAASTD)

PS: The Interactive Panel of the United Nations General Assembly on the Global Financial Crisis, 30 October 2008, United Nations Headquarters had presentations by Joseph Stiglitz, Sakiko Fukuda-Parr, Prabhat Patnaik, Pedro Páez, Calestous Juma, and François Houtart.

Agrarian Crisis and Farmers’ Suicides in India

The larger agrarian crisis has two dimensions. On the one hand, there is a livelihood crisis that threatens the very basis of survival for the vast majority of small and marginal farmers as also for agricultural labourers. On the other hand, there is an agricultural developmental crisis that lies in the neglect of agriculture arising out of poor design of programmes and allocation of resources and having resulted in declining productivity and profitability. This twin dimensions could also be equated with the developmental discourse where the former is about displacement of people and the latter is about displacement of ideology. The outcome is that planning is not people-centric.

In monsoon India, abundance or paucity of water has always been considered as a major source of agricultural uncertainty. Today, this yield risk could also be because of spurious inputs or inappropriate use of technology. Increasing costs, price volatility, non-availability of credit from formal sources and other risks further compound it. Social responsibility of education, healthcare and marriage instead of being normal activities add to the burden. All these would even put the semi-medium farmer under a state of transient poverty.

An extreme response to this distress is the increasing incidence of farmerss suicides. Between 1995 and 2006, more than 190,000 farmers have committed suicides, 83 per cent of these being males. The suicide mortality rate (SMR, suicide death for 100,000 persons) for male farmers increased from 10.5 to 19.5 whereas that of male non-farmers has more or less remained around 13. The major states with SMR for male farmers greater than the all India average of 18 during 2001-06 are Kerala (233), Maharashtra (53), Chattishgarh (47), Karnataka (39), Andhra Pradesh (35), Tamil Nadu (31) and West Bengal (21). It is to be reiterated that suicide is a symptom of the larger crisis, and its absence does not in any way indicate the absence of a crisis.

It is only in Kharif 2008 that one observes a substantial increase in the minimum support prices of the 16 major crops. In fact, the absolute increase would be almost equal to increments in the entire decade. Though welcome, this vindicates the established fact that returns to agriculture had turned out to be abysmally low. Per-capita per day returns to farmer households from cultivation in 2002-03 was eight rupees. Another recent public policy intervention has been the Rs.70,000 crore debt waiver package. This is just a book keeping exercise and at best will reduce the burden from formal sources. Indebtedness, like suicides, is another symptom.

Risk mitigation has to go beyond suicides and debt. What is more important is to spruce up public investments that will increase returns to cultivation. Skill enhancement and linking of opportunities to local resources are required to increase non-farm income. Success of the credit and input markets require effective regulation. There is a case of encouraging technological and financial products that would reduce costs while increasing returns. Institutions that can organize farmers are required.

My earlier blog on a related theme is Indian Agriculture in Doldrums.


Selected Readings:

Bhaduri, Amit (2008), Predatory Growth, Economic and Political Weekly, 43 (16), 10-14.

Government of India (2007), Report of the Expert Group on Agricultural Indebtedness, Chairman: R Radhakrishna.

Mishra, Srijit (2007), Agrarian Scenario in Post-reform India: A Story of Distress, Despair and Death, Orissa Economic Journal, 39, (1 & 2), 53-84. IGIDR Working paper version is WP-2007-001.

Mishra, Srijit (2008) Risks, Farmers’ Suicides and Agrarian Crisis in India: Is There a Way Out? Indian Journal of Agricultural Economics, 63 (1), 38-54. IGIDR Working paper version is WP-2007-014.

Reddy, D. Narasimha and Srijit Mishra (eds.) (2008) Agrarian Crisis in India, Oxford University Press, forthcoming.

This is the abstract of a presentation at a one day international seminar, “Environmental degradation and food crisis – Lessons for India” being organized by Greenpeace India on 24 October 2008 at India International Centre, Lodhi Road, New Delhi, India.

Public Health in India

There are a number of equity related issues, rather inequities, in health in India.

India is perhaps one of the few countries where public expenditure on health is less than one per cent of Gross Domestic Product (GDP). There is a lot of variation in the public provisioning of health care - a state subject. Poor states are hard pressed for funds.

Diseases- or disability-wise specificity in states or even districts/blocks with emphasis on seasonal and subgroup (age, caste, gender or income) differences will help attune public policy to improve access and utilisation.

The question of access to and utilisation of care also needs to address the availability of caregivers. The outflow of trained caregivers (referred to as brain drain) and the growing private corporate sector will reduce their availability in the public sector.

With four-fifths of health care expenses being out-of-pocket, the increasing usage of private unregulated care that gives rise to supplier-induced demand (unnecessary medical intervention) is worrying. This, on one hand increases cost, and on the other, leads to misallocation of scarce health resources. It is not only inefficient and iniquitous, but medically speaking it compromises an important aspect – quality.

Regulation of cost and quality in the private sector should not be restricted to caregivers. It should extend to private players involved in non-clinical services and diagnostics, pharmaceutical industry, insurance providers, NGOs and public caregivers. A prerequisite for the success of privatisation is effective regulation. Policies that encourage privatisation but give regulation the go by will be detrimental.

Be it regulation or monitoring of cost and quality, access to or utilisation of healthcare, or analysis of epidemiological patterns - public health has to get out of anecdotal evidence and increasingly rely on scrutiny of ‘hard facts’. This requires the availability of real-time data in the public domain. Its analysis will help design locally relevant public policy.

For details see Srijit Mishra (2005), Public Health in India, in Kirit Parikh and R. Radhakrishna (eds), India Development Report 2004-05, Oxford University Press.