How Demonetisation Crippled The Working Class

Posted on November 17, 2016 in Business and Economy

By Vivashwan Singh:

The citizens are enraged in India after the decision of the government to demonetise by eliminating the legal tender of the notes of ₹500 and ₹1000. Thousands of people have been queuing up outside banks and ATMs. The people most hit by demonetisation are from the poorer sections of society. Domestic workers, labourers and others who live their lives by using cash. I did not have money to eat on November 11, despite having notes of ₹500 and ₹1000. I had to depend on a friend of mine for food. So, I can imagine what would have been the situation of the working class. Children have died in hospitals because their family members didn’t have money. Some women have committed suicide because all their cash savings had become worthless pieces of paper. It is an important time for the farmers and they have no money to buy fertilisers. People have lost patience now.

A Subzi Mandi branch of IDBI bank branch was attacked by an angry mob in Delhi on the morning of November 12. Bank officials were attacked with stones and several of them were injured. People looted the Metro Mall in Seelampur, Delhi. The whole country is in chaos and turmoil.

In a nation where banks are not accessible to a large section of individuals and many poor people don’t have banking knowledge, such plans create more ruckus instead of a solid economy. The executive has made the poor man’s life miserable currently.

According to a UNDP report, 80% of Indian women don’t have bank accounts. Furthermore, 95% of transactions are still done in cash in our country.

Many women save all their income in cash regularly, without anyone else knowing about it. The cash gets them food for their kids and medications when they fall sick. Many women in India are victims of abuse by their husbands who spend unnecessary amount of money on products like liquor. Demonetisation has financially crippled them.

Economist and former RBI governor Raghuram Rajan had stated earlier that demonetisation as a means of alleviating the menace of black money had been thought of before but hadn’t been implemented as they were not thought to be effective. Apart from Rajan, the former World Bank Chief Economist and India’s former Chief Economic Advisor Kaushik Basu in the Ministry of Finance said that the Narendra Modi government’s demonetisation drive was not ‘good economics’ and that the damage it causes will be greater than its benefits.

The people who are rich and have black money send their drivers and other household staff to queue at the banks to change their cash for them. The people from the poorer sections of the population are facing bureaucratic harassment and are also left at the mercy of others to have their hard-earned income converted into legitimate currency.

This move has resulted in deaths of senior citizens in Maharashtra, Kerala and Madhya Pradesh till now. It is shocking that no provisions have been made for the elderly and pregnant ladies. Most people do not use net banking in India. Many keep cash at home for medical emergencies. Lots of people live alone as well. What provisions have been made for them? The monster of demonetisation has resulted in the death of 47 Indians till now.

The government has said that those who deposit money above ₹2.5 lakhs will have to pay tax and pay a 200% penalty in case there is a mismatch in income. Why would anyone possessing black money make such a deposit?

This government shows how it has no understanding of capitalism.The monetary policy of introducing new high-value notes has the potential to create more black money in the future. Many are also doing business by exchanging old notes for new ones.

What sins have the poor people committed for which they have to go through all this? On the other hand, the rich people who have black money are not going through any trauma at all.

According to this logic, we should arrest all citizens of a colony and put them through torture. The criminals who confess to the crime should be arrested, and the honest ones would have nothing to fear as they would eventually be set free. We can get rid of all criminals in the society like this. It will be a ‘surgical strike’ on crime and a genuine masterstroke! BJP supporters might say, “Can’t we just go to jail for a couple days for the sake of the nation? What is this ‘minor inconvenience’ in comparison to the long-term benefits of a crime-free society? Don’t we all love India?”

A few days back Baba Ramdev made a statement. He said, “During war, our soldiers fight sans eating for 7-8 days; so can’t we do the same for our nation?” Ramdev’s Patanjali is doing great business. Shouldn’t he distribute his products as a goodwill gesture and live without profit for a few days?

A fake copy of the new ₹2000 note has already been found in Chikmagalur. It shows the failure of Modi’s decision in the very first phase of demonetisation. In the end, it is the poor who will end up paying the price for the bad habits of the rich.

You can call me a communist, socialist, anarchist, ‘Congi’, ‘anti-national’. Call me whatever you feel like.


Image source: Gerry Popplestone/ Flickr