Obviously, this did not and will not happen. Somewhere between 9 per cent and 9.5 per cent, the bank would have increased the EMI amount, in some cases by almost 25-30 per cent. At 11 per cent (today’s rate), for the aam aadmi who has to pay Rs 5,000 per month, the extra Rs 1,000 means cutting back on essential expenditures — transport and health for the worker; health, education and maybe some kinds of food for his family.

In this process of increased financial stress for such households, the sole comfort has been rising property prices, which have kept the aam aadmi’s simmering rage under some control. If they collapse, as many expect them to, we are looking at mass foreclosures and the resultant political implications that such completely legal acts bring with them. Bankers are worried, and are offering deferred payment options for the differential in EMI.

But more than bankers who have to balance their books to avoid high non-performing assets, I suppose it is the Congress party that is understanding the political risk that’s embedded in rising interest rates. Perhaps it is realising that the new and growing currency that’s trickling down from the wealthy to the poor, from cities to villages, is an EMI-backed stake of a huge constituency.

This constituency is telling them that along with high growth, there is a new confidence it has discovered. This confidence has its roots in people taking on a 20-year-long liability to fund their present (buy the house today, pay tomorrow). Meaning, they feel there is enough opportunity for them to earn and pay an EMI for as many years — unemployment or worklessness are concepts that don’t exist anymore. It is saying the growing economy has generated enough surplus for them to lay a claim to an aspiration that so far has been the monopoly of the non-voting rich.

... contd.