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We're back in 1993 in the Ayemenem house, which has become filthy and broken down.
Baby Kochamma and Kochu Maria sit watching TV and eating peanuts. A man is singing "Somewhere Over the Rainbow" on The Best of Donahue. This is the man's big dream. The narrator tells us, "there are big dreams and little ones" (3.13).
The narrator flashes back to one time when an old coolie (a derogatory English term for someone of the working class) who was carrying Estha's luggage on a school excursion said to him, "Big Man the Laltain sahib, Small Man the Mombatti" (3.14). This basically is supposed to highlight the difference between the important "somebodies" in the world and the "nobodies" who have to accommodate them.
We come back to the present. Estha has been out in the rain and comes back inside the house. Baby Kochamma remarks to Rahel about everything Estha's about to do, like a play-by-play of something that hasn't happened yet.
Estha goes back to his room to wash his clothes. Baby Kochamma's like "told you so!" Rahel follows Estha.
We learn about Estha's room (Ammu's old room), which is obsessively clean and tidy.
Estha undresses. Rahel watches him and wonders if he knows she's there. She thinks of how they're older now.
The narrator describes Rahel in physical terms – she's starting to resemble Ammu.
Rahel scans Estha's body to see if she can see signs of herself in him.
Rahel reaches out and wipes away a raindrop from Estha's ear. He doesn't look back at her. He starts washing his clothes in a bucket.