By Jelena Salmi
"I've heard that the new 2,000-rupee note has Modi's face on it," claims a middle-aged Muslim man outside a small informal shop on the outskirts of Ahmedabad, "but I haven't seen the note yet." A young woman standing next to him echoes his view: "Yeah, yeah, that's true", she says, nodding. A shopkeeper, who sells inexpensive biscuits, sweets and tobacco products, stretches out from behind his blue counter to contradict his customers: "No way, listen, only dead people's faces get printed on bank notes! I bet it's the Father of the Nation whose face is on that note. It's Gandhi's face, for sure. And that's the way it should be!"
It's November 21st and I am in Vatva, the largest concentration of slum resettlement sites in Ahmedabad. It has been thirteen days since the Indian Prime Minister Narendra Modi announced the nullification of all Rs 500 and Rs 1000 notes in a move to deal with the corruption, black money and counterfeit currency that according to Modi, is being used to finance terrorist activities in India. In his speech on Tuesday evening, November 8th, he assured that "the rights and the interests of honest, hardworking people will be fully protected" as all the smaller notes would remain legal tender and people could deposit their old notes of Rs 500 and Rs 1000 in banks or post offices during a period of 50 days ending on December 30th.
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| Sign in front of the Raipur gate in Ahmedabad announcing the fight against corruption, black money and counterfeit currency. |
Modi also announced that banks and ATMs would remain closed for the next two days, after which there would be daily and weekly cash withdrawal limits to ensure the dispersal of new Rs 500 and Rs 2000 notes to all. Towards the end of his speech, he reached out to the common people, asking them to bear with him through difficult times:
"Brothers and sisters, in spite of all these efforts, there may be temporary hardships to be faced by honest citizens. Experience tells us that ordinary citizens are always ready to make sacrifices and face difficulties for the benefit of the nation. [...] Ordinary citizens have the determination to do anything if it will lead to the country's progress. So, in this fight against corruption, black money, fake currency, fake notes and terrorism, in this movement for glorifying our country, will our people not put up with difficulties for some days? I have full confidence that every citizen will stand up and participate in this mahāyajña [great sacrifice]."
In this blog I examine the elusive, mythical mahāyajña and ask: What kinds of sacrifices have been required from urban and rural poor in the face of demonetization? What are the effects of demonetization on the lives of the poor? While on a monitoring visit related to a development cooperation project by the Finnish NGO The Swallows of Finland, I had the chance to discuss the consequences of notebandhi ("closed notes") on everyday life with villagers from Dungarpur, Chhota Udepur, Anand and Kheda Districts, as well as with resettled slum-dwellers in Ahmedabad. I also had several discussions with representatives of an Ahmedabad-based non-governmental organization (hereby referred to as "NGO"), which works to enhance the rights and livelihoods of low-income female workers in India.
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| At the State Bank of India. |
In Ahmedabad, the overnight nullification of 86 % of the country's currency was most concretely embodied in serpentine queues outside ATMs and banks. Throughout my sixteen-day stay, many ATM booths remained closed or had a "No cash" sign attached to the window. Everybody in the city seemed to be short of cash, both the rich and the poor. The rich, however, had a significant advantage: payment cards. I myself mostly dined in places that accepted cards, and due to their convenient payment system, I preferred to use Uber taxis instead of rickshaws. And, apparently so did many others who were fortunate enough to have plastic money.
At one of Vatva's slum resettlement sites, where many men work as rickshaw drivers, I was told that business had been very bad since November 9th. And not just for rickshaw drivers: also marginal traders, daily-wage laborers and everyone operating on cash had been hit hard. "There's been no work available since notebandhi", an elderly man named Dilpesh told me. "We cannot even afford to pay this month's rent." Dilpesh did have a bank card for an account opened under Modi's Jan Dhan Yojna, but he didn't know how to pay with it. Besides, he bought his daily groceries from traders that only accepted cash. Luckily, he was able to buy food on credit, as traders in the neighborhood were his friends and acquaintances. For Dilpesh, demonetization meant increasing indebtedness.
Migrant laborers, however, rarely develop long-term relationships of trust with traders, therefore they cannot buy food on credit like Dilpesh can. In a meeting with the NGO's Urban Union I learned that two of Ahmedabad's numerous construction sites have been temporarily closed because all the migrant construction workers have either gone back to their villages or—less obviously—are queuing for money. They are not, however, standing in line to withdraw money from their own bank accounts—many of them do not even have one. Instead, queuing has become a profitable business for them: one is able to earn Rs 400 to Rs 500 a day by holding another person's place in a line outside a bank. This is more than workers can earn at construction sites. But not everyone can make a living from queuing. Some migrant workers have been forced to return to their villages empty-handed.
Unfortunately, the situation that awaits migrant workers in their villages is far worse. In the Chhota Udepur District, our team met a farmer named Anitaben. She told us about a woman who had sold her patch of land just a day before the demonetization. During the weekend, the woman learned that her money had turned into a worthless pile of paper, and she was so desperate that she took her own life. Banks were closed for two days and information about the possibility to exchange old notes into new ones had not yet reached her village.
Migrant laborers, however, rarely develop long-term relationships of trust with traders, therefore they cannot buy food on credit like Dilpesh can. In a meeting with the NGO's Urban Union I learned that two of Ahmedabad's numerous construction sites have been temporarily closed because all the migrant construction workers have either gone back to their villages or—less obviously—are queuing for money. They are not, however, standing in line to withdraw money from their own bank accounts—many of them do not even have one. Instead, queuing has become a profitable business for them: one is able to earn Rs 400 to Rs 500 a day by holding another person's place in a line outside a bank. This is more than workers can earn at construction sites. But not everyone can make a living from queuing. Some migrant workers have been forced to return to their villages empty-handed.
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| Queue outside the State Bank of India Head Office in Ahmedabad. |
Unfortunately, the situation that awaits migrant workers in their villages is far worse. In the Chhota Udepur District, our team met a farmer named Anitaben. She told us about a woman who had sold her patch of land just a day before the demonetization. During the weekend, the woman learned that her money had turned into a worthless pile of paper, and she was so desperate that she took her own life. Banks were closed for two days and information about the possibility to exchange old notes into new ones had not yet reached her village.
Anitaben herself lost the profits from approximately 720 kg of tomatoes, because the vegetable bazaar was closed for ten days after Modi's announcement. She lost more than 7000 rupees (approx. 100 euros). A representative of the NGO told me that as bazaars have now been opened again, there's the problem of big traders exploiting small farmers by paying low prices for agricultural products, and by paying with cheques instead of the urgently-needed cash. To tackle the drastic situation, NGO employees have been writing letters to District Collectors, asking them to intervene. Following these efforts, traders in some districts have now started paying in cash. The prices, however, are still lower than usual.
At the same time that Anitaben's tomatoes went to waste, women in the village of Khajuria in Dungarpur, Rajasthan, did not have money to buy vegetables. Many men from Khajuria work as migrant laborers at construction sites in Ahmedabad and Mumbai. With demonetization, the men had not been able to send money to their wives and children. Normally, cash had been sent home every fifteen days via a bus driver who takes Rs 100 for himself as a commission for transporting Rs 2000 from Ahmedabad to Khajuria. Without this money, the women were desperate. In the hope of filling their stomachs, they picked gram leaves from the field, spiced them up and ate them. To quote a representative of the NGO: "The situation is very dire in villages. People are literally starving."
Sudden demonetization also gave rise to various rumours. In Dungarpur, information was passed from person to person that not only big notes, but also ten-rupee coins had been nullified, and for this reason, no one wanted to accept them as payment. At the same time in rural Anand, a rumor came through the grapevine that the price of salt will go up significantly, and as a result, some people began to stock up on salt. Moreover, people started exchanging food crops: wheat for vegetables, vegetables for wheat.
In the face of the Indian government's radical move towards a cashless society, the poor are the ones who have been forced to sacrifice the most. Some have even sacrificed their lives. In his demonetization announcement, Modi claimed that "ordinary citizens are always ready to make sacrifices and face difficulties for the benefit of the nation". I, however, could not bring myself to ask the people with whom I spoke whether they considered their sacrifices "for the country's progress" to be fair and just.
Some names have been changed or omitted to protect the privacy of individuals. At the same time that Anitaben's tomatoes went to waste, women in the village of Khajuria in Dungarpur, Rajasthan, did not have money to buy vegetables. Many men from Khajuria work as migrant laborers at construction sites in Ahmedabad and Mumbai. With demonetization, the men had not been able to send money to their wives and children. Normally, cash had been sent home every fifteen days via a bus driver who takes Rs 100 for himself as a commission for transporting Rs 2000 from Ahmedabad to Khajuria. Without this money, the women were desperate. In the hope of filling their stomachs, they picked gram leaves from the field, spiced them up and ate them. To quote a representative of the NGO: "The situation is very dire in villages. People are literally starving."
Sudden demonetization also gave rise to various rumours. In Dungarpur, information was passed from person to person that not only big notes, but also ten-rupee coins had been nullified, and for this reason, no one wanted to accept them as payment. At the same time in rural Anand, a rumor came through the grapevine that the price of salt will go up significantly, and as a result, some people began to stock up on salt. Moreover, people started exchanging food crops: wheat for vegetables, vegetables for wheat.
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| Anitaben's fields. |
In the face of the Indian government's radical move towards a cashless society, the poor are the ones who have been forced to sacrifice the most. Some have even sacrificed their lives. In his demonetization announcement, Modi claimed that "ordinary citizens are always ready to make sacrifices and face difficulties for the benefit of the nation". I, however, could not bring myself to ask the people with whom I spoke whether they considered their sacrifices "for the country's progress" to be fair and just.
Photos © Jelena Salmi.