12.22.2016

India's Cash Ban: The Poor Don't Care

India's PM Modi recently launched a policy banning high denomination cash notes. It had an immediate negative impact on the economy.

Rs 500 and Rs 1,000 notes scrapped: Govt releases FAQ to help you make sense of it all

Modi is sort of a Trumpian, populist figure. Progressive Indians do not like him or his party, the BJP. Is media coverage biased as a result?

CNN tells us India's cash crisis is 'a mammoth tragedy'
Reuters says Modi losing friends as anger grows over Indian cash crackdown

A couple of reasons for the ban were to end crime and tax evasion. The Guardian tells us India currency note ban sparks ‘dramatic fall’ in sex trafficking.
India’s rupee recall appears to have had “a massive impact” on the country’s human trafficking industry, according to advocacy and rescue groups, with some reporting reductions of up to 90% in the number of women and girls being admitted to their shelters.

But other activists said the illegal trade was already rebounding, and that the financial strain of demonetisation on poor communities was pushing new, younger girls into sex work, and forcing women already in the industry to work for credit or for free.
Hmm, true or not true? Probably true, but who knows.

Not everyone sees negatives though: Why the chattering classes can’t fathom the vast support for demonetisation
Despite a substantial drop in their earnings in the month since high-value Rs 500 and Rs 1,000 notes were invalidated overnight, autorickshaw drivers outside a Delhi mall said they still backed the government’s move.

“It is a good decision,” said Raghuveer, who is from Badaun in western Uttar Pradesh, and has been driving an autorickshaw in the national capital for 15 years. “If it works, well and good, and maybe something will be done for the poor. If it doesn’t work, it makes no difference to me.”

Others in the scrum around him agreed.

Said an auto driver, to chuckles from the rest: “People are complaining about bank queues. But we have nothing to put in the bank so where is the inconvenience? What we make in the day, we eat at night.”
The poor literally aren't affected:
A person paid Rs 15,000 a month to drive a car that costs what he would earn in 400 years does not expect there to be a sudden reversal in his employer’s fortune. What he feels about his employer’s discomfort is perhaps more akin to what college students once referred to as CTs or cheap thrills – momentary pleasure.

Economic growth has allowed bankers and other top corporate executives to earn six-figure amounts in a day, and for some people to buy cars that cost what the average Indian would need over 1,000 years to earn. But it has not created enough decently-paying work for the majority of people in the country.

Average incomes in India are so low that drivers like Manoj and Ram Charan, who earn Rs 15,000 a month, are in the top 10% of earning Indians, along with their employers and the prime minister, as well as most people likely to be reading this article. The majority of the rest of India subsists on between Rs 3,500 and Rs 7,500 a month.
15,000 rupees is $225 at the moment.
Explanations like Tiwari’s that the prime minister is talking about “the difference between the rich and the poor” have been likened by some to the political rhetoric that made the magnificently rich and famously uncaring Donald Trump the candidate of America’s marginalised people. But India’s poor are quite different from America’s marginalised – they have never been anything other than poor. They are not the detritus of deindustrialisation, but the survivors of persistent intergenerational and historical inequalities.

They do not see their current circumstances as those shared by all Indians in a bank queue. They see it as something shared by Indians, who are poor like them.
The conclusion:
There is empathy for the hardships suffered by those worse off. But there is rarely a full acknowledgement of the obscene and constantly widening gap between the tiny numbers of the rich (including almost anyone who is reading this) and the rest who are poor. This is at the root of the bewilderment about why those who have suffered the most through demonetisation remain devoted to the prime minister or at least to the idea that this is a fight against corruption. The prime minister, however, whom we can fault for his poor decision-making style and lack of policy acumen, has an unerring sense of where the social fault lines lie.

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