Manusmriti codified punitive interest rates that still govern Indian moneylending

Evidence

The Manusmriti (circa 150 CE) goes further and suggests a sliding scale of interest rates: 2 per cent per month for Brahmins, 3 per cent for Kshatriyas, 4 per cent for Vaishyas and 5 per cent for Shudras. On an annual basis, the Brahmin was to pay 24 per cent interest and the Shudra and Dalit, 60 per cent. Even today, for moneylenders to charge a desperate farmer or landless labourer an annual interest of 60 per cent (or more) for a loan is quite normal. If they cannot pay in cash, they have to pay what is known as ‘bodily interest’, which means they are expected to toil for the moneylender from generation to generation to repay impossible debts. — Ambedkar, B R, Annihilation of Caste_ The Annotated…, 60

Categorization

• XREF: Connects to the reader’s interest in caste annihilation — shows legal-religious codification of economic exploitation at the core of the caste structure. Links to contemporary discussions of debt bondage and farmer suicides.
• SHARE: The specific sliding interest scale (2% Brahmin up to 5% Shudra) underlying today’s 60% moneylending rates is a striking fact for anyone interested in Indian economic history.
• QUESTION: How did ‘bodily interest’ hereditary debt peonage persist legally after independence, given formal abolition of bonded labor? Worth chasing the legal history.