Danapur/Taranagar: In Karnataka’s Bellary district, commercial vehicle owners aren’t paying their loan instalments, with the mining ban having dried up income. Already, there are rumours of a suicide by one person unable to keep up with payments.
Meanwhile, a senior police officer is concerned unrest will rise owing to mass joblessness and its ripple effects.
“Everyone here is steeped in debt,” said Maradi Basavraj, president of the Lorry Owners’ Association in Danapur, in a field where around 50 idle lorries are parked, their owners huddled together in anxious groups. “The mining mafias have made their money and we are stuck.”
According to a rough estimate by the Bellary police, there are about 10,000 lorries in the town, a sizable chunk of which would have been purchased with the help of loans from banks, motor companies and money lenders.
All across the district, lines of lorries, tippers and earth movers are seen parked in open fields, or in clusters near villages. The vehicles that were used to ferry iron ore from the mines to the plants, or to the ports for export, were kept busy during the 2008-10 boom. When the business hit its peak, some lorry owners borrowed to buy more trucks to transport the state’s iron ore output of 45 million tonnes (mt).
Exports were banned in 2010 and then in July this year, the Supreme Court, hearing an environmental case, stopped mining altogether. Lorry owners are afraid to answer their phones, afraid that it might be the repo man calling. All they can do is look for the faintest sign that business could restart.
“If this ban goes on for another month, there will be suicides,” said Abdul Rahim, a member of the association. “Even after seizing lorries, they chase us for dues.”
The association members cited one suicide and an attempted suicide by members unable to make repayments.
Manjunath, 32, a lorry owner from Hospet, said that his 50-year-old father Chandrappa, a lorry owner himself, killed himself a few weeks ago after his vehicle was taken away. “He was depressed. He went out of the house and drank poison,” Manjunath said, speaking about his father.
Another 35-year-old owner of four lorries, Sudhakara, was said to have attempted suicide by drinking poison at the office of the financing company, according to the association members.
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Bellary’s superintendent of police Chandragupta (he uses only one name) said there were no official reports of suicides, but there were fears of crime rates rising in the district.
“Definitely, there is a concern and a little rise in crime,” he said. “Not just the mining sector, but entire sectors that were supported by it are affected.”
Chandragupta said a large portion of the loans came from unorganized money lenders and most of the police complaints about defaults came from this section. Property-related complaints are also rising.
All the commercial vehicle financiers and banks named by the lorry owners were contacted for this story, but they did not confirm that defaults are taking place. Some spokespersons at these companies downplayed the issue.
Stuck in debt: Rows of tipper trucks in an empty field in Danapur. Photo: Aniruddha Chowdhury/Mint
“There is definitely some concern for us due to continuous disturbance/issues in smooth operation of mining activity,” U.G. Revankar, deputy managing director, Shriram Transport Finance Co. Ltd, said in reply to an emailed questionnaire. But customers who are owner-drivers and small operators always find alternative earning opportunities, he said.
The company also seeks to help such borrowers “tide over the problems and encourage them to look for alternative earning avenues like infrastructure construction, real estate etc.”, including “normal transportation activity”.
Tata Motors Ltd hasn’t sold many trucks in the Bellary area for a few years, so financing by Tata Motors Finance Ltd too has been negligible, said Debasis Ray, head, corporate communications.
“On the financing side, Tata Motors Finance is not faced with any unusual situation in the area,” he said.
Ashok Leyland’s spokesperson declined to comment.
ICICI Bank and HDFC Bank did not respond to emailed questions.
On average, a 10-wheeled tipper costs Rs23 lakh while a regular truck costs Rs13 lakh. They are available at a 20% down payment, with the rest coming from loans typically repaid in four to five years.
Lorry owners, most of whom live in Bellary, are now scrounging for the little work that’s available in the industrial belt of Hospet.
With some iron and steel plants closed and many running at scaled down capacity because of the slump in ore supply, there’s little business to go around.
“Our only request to the Supreme Court is to allow at least some good mines to operate,” said Manan Khan, another lorry owner. “At least we will fill our stomach with some food.”
This is the third part of a series on the aftermath of a Supreme Court ban on illegal mining in Bellary. The second part dealt with the effect of mining on flora and fauna.