Indebted by dispossession: The long-term impacts of a Special Economic Zone on caste inequality in rural Telangana

This paper contributes to a growing scholarship examining the ways in which dispossession in neoliberal India is reinforcing and reconfiguring agrarian social hierarchies. Existing studies have focussed on the differential successes of villagers in Special Economic Zone (SEZ)-generated real estate markets, incorporation of land losers into stratified labour markets and the caste-based politics of dispossession. Few studies, however, have systematically explored the long-term implications of state-orchestrated dispossession on agrarian credit and debt relations. Based on long-term fieldwork on a village partially expropriated for a SEZ in the South Indian state of Telangana, this study shows how dispossession has led to a sharp rise of over-indebtedness within the land losing population. Dispossession deprived villagers of land and livestock; low compensation was inadequate to obtain replacement assets; and labour inside the SEZ was insufficient to ensure the reproduction of most households. The result was a cascading process of indebtedness for consumption smoothing that was generalized but the greatest among former untouchables (Scheduled Castes, SCs) and Lambadas (Scheduled Tribes, STs). Since dispossession precluded these historically marginalized groups from access to institutional credit, their reliance on largely upper caste moneylenders-whose land was spared expropriation-was deepened. Thus, I show how dispossession for neoliberal projects has reinforced this traditional caste-based form of exploitation.