Azad Essa: A blatant disregard for India's poor

Prime Minister Narendra Modi declared that two of India's biggest currency notes - the 500 rupees (R100) and 1 000 rupees - would be discontinued with immediate effect. Picture: EPA

Prime Minister Narendra Modi declared that two of India's biggest currency notes - the 500 rupees (R100) and 1 000 rupees - would be discontinued with immediate effect. Picture: EPA

Published Dec 20, 2016

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The country's move towards a cashless society will strip them of their purchasing power and drive them further to the margins of society, writes Azad Essa.

In a surprise television address on November 8, Indian Prime Minister Narendra Modi declared that the two of the biggest currency notes - the 500 rupees (R100) and the 1000 rupees - would be discontinued with immediate effect.

Modi said the move was geared towards addressing the large swathe of “black money” - money that has not been taxed or is earned through illicit transactions. The Indian government requested 50 days before the new notes - 2000 and 500 rupees - would enter into full circulation.

At first the move may have been seen as a radical reform of the economy, but within hours reality set in for hundreds of millions of people living outside the formal structures of the Indian economy.

It threw the economy into disarray. With 80 percent of the country working in the informal economy, living outside the ambit of banks, formal employment and credit cards, an entire segment of society was driven further to the margins, stripped of their purchasing power.

Suddenly, millions of people were unable to purchase food and medical treatment became a luxury.

The government put a limit on ATM withdrawals at 2000 rupees a day and even six weeks later, banks are characterised by long queues outside the doors. Some stand for four or five hours waiting their turn. Those who need larger amounts to pay for expensive transactions are able to access a limit of 24000 rupees every two weeks. But most banks, especially the smaller ones, don’t have the cash. It isn’t a unique sight to see grown men weeping inside a co-operative bank. At least 50 people have died directly or indirectly because of the move.

The lack of foresight is at first startling. But on closer inspection, the move is deliberate in its disregard for the poor. While India has experienced phenomenal growth over the past 15 years, the country is more unequal than before. Wealth is concentrated in the hands of a few - 1 percent of Indians control 58 percent of the national wealth.

India is characterised by crony capitalism in much the same way South Africa is, except far worse. The attack on “black money” certainly doesn’t address the nexus between politician-corporates; corporations will still be given dubious access to public resources, substantial tax breaks and special economic zones. The move merely facilitates corporate-state power.

Then there’s the fairly obvious. Most “black money” isn’t kept as cash in India. Corruption doesn’t manifest itself as notes packed in duffel bags under mattresses but rather as properties, gold and fancy key-codes at Swiss banks.

India is known for its parallel worlds. Poverty and wealth at its most obscene extremes. Even then, the move to demonetise is exceptionally cruel, killing jobs at factories and stalling small-scale trade. On the street, vendors and traders - those who make up most of India’s economic actors, selling food, clothes, and services - speak of spectacular losses and desperate times. And there is little respite.

For the minority living off plastic money, who circulate their consumerism around high-end shopping malls, department stores and online boutiques - their life has barely been touched.

For this lot, Modi’s move may be an “inconvenience” for the majority but their purview is that the move amounted to a type of progress. They see the proposed switch to a cashless society as a step towards sharing the tax burden. Less than 4percent of Indians pay tax. It’s a statistic upper echelons hold with much resentment. Despite the pain of the majority, it’s their privileged voices, along with a buoyant upper middle-class media, that have helped manufacture consent for the prime minister’s policy.

“The demonetisation policy is clearly an upper middle-class aspirational exercise, completely oblivious to the pain and hardships of the people, already impoverished, who expend their labour to live by the day on small currency and small change, and many of whom have lost their lands to projects for ‘development’ or to the recurring crises in agriculture,” says journalist and author R Uma Maheshwari.

The Indian government has changed its reasoning several times since November 8. First, it was to weed out black money and to ward off terror funding. And now, it’s about creating a cashless society. Even then, considering the Kenyan example, mobile or digital money doesn’t solve corruption. Uma Maheshwari describes it instead as “a surveillance of the every day”.

The reasoning could change once more, but the targets won’t.

* Azad Essa is a journalist at Al Jazeera. He is also co-founder of The Daily Vox.

** The views expressed here are not necessarily those of Independent Media.

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