Poppy Economy: Belling a 1000-pound Gorilla

Boilal Gangte
Contd from previous issue
Hence, the velocity of money for the “Poppy Economy” will be higher than the average public money. The velocity of money in India post demonetization (2016) was about 7.8 times (M1 Level), which probably would be higher now. So, it would be safe to assume that the velocity of money for Poppy Economy will be in double digits.
Even at a velocity of 10, the GDP of Poppy Economy is INR 13,500 Cr. This is about 40% of the economy of Manipur. Given this, it is not going to be an easy task to dismantle such a force, as it will have an impact on the formal economy of the State. From a pure academic point of view, just imagine if we were to drain out this INR 13.5K Cr from our economy at one stroke, it’ll be catastrophic, much more than the demonetization impact or any other economic debacle, which the State has ever faced before.
Poppy economy has become mainstream–A strong and wide trickle-down effect !
First, unlike the Heroin days, the current poppy menace has become quite a “mainstream” in our economy and in our lives.
Most unlikely, money earned from Heroin in those days would not have entered the Church through tithes i.e., one tenth of annual/monthly produce or income. [RG1] But poppy earnings do and such is the depth it has entrenched into the community and the economy.
Next, it has become a life changer for many village farmers, while they are not involved in the poppy trade. They are only farm labourers fending for their families, who have better wage opportunities for the same farm work they have been doing since ages. Therefore, the penetration of poppy economy is not just in the nexus, cartel or the supply chain, but it has a huge and wide ancillary which are part of the formal economy.
Lastly, because of the sudden inflow of money due to poppy economy, it has a huge trickle-down effect to many other industries. Land prices have increased as people can afford more, the car industry is seeing a surge, the construction industry is feeling the positive vibes, the clothing industry is not one to just stand and watch, you name any industry, it has somehow touched the lives of individuals and families.
To conclude !
There is not an iota of debate or dispute (??) on whether it needs to be stopped. The only question is how to stop. Unlike the “Heroin Menace”, the “Poppy Menace” is not an external invasion, but an internal revolt which is growing deeper roots by the day.
Therefore the “War on Drugs” is a daunting challenge as it’s much more complicated – the scale is larger, it’s deep rooted in the society, and it has huge implications on the economy. It will require a robust planning apart from an execution excellence. We wish the CM and Team “War on Drugs” our absolute best and the strongest of hope, for they will need plenty of it.
The author is an IIM Bangalore alumnus, an entrepreneur and an independent analyst