This article is the seventh section of a larger series that weighs up the reasons given for the demonetisation of 86% of Indian currency, and also seeks to uncover the true compulsions behind the monumental action.
The entire study can be viewed as one article. Link below.
50 days later, it appears that the bold & unprecedented ‘masterstroke’ has turned out to be more akin to ‘carpet bombing’ than any manner of a surgical-strike, as plainly observed by the Chief Justice of India.
Most of those reading this — with debit cards, mobile wallets & net-banking probably haven’t faced more than a few niggling pains. For the common man however, the best analogy for demonetisation would be — getting one’s teeth pulled out without anesthesia.
No one is denying the fact that India did have a massive black money problem, and that this act of demonetisation will cause the ‘black money hoarders’ (say ten thousand people) some losses. But, at the same time, for hundreds of millions — the poorest of the poor, who don’t have savings or electronic forms of payment — this destruction of the informal economy has led to immeasurable distress which will continue well into 2017.
“Most free societies would rather let several criminals go free than convict an innocent man” — Larry Summers, 21.11.2016
For years the debate will rage on — have the costs of demonetisation exceeded the benefits or vice-versa? Economists on by both sides will make tall claims to prove their arguments.
But, can you quantify the deaths of over a hundred people?
And at what point do we say it is too much a cost to bear? Is not even one life lost one too many? — Firstpost, Nov 12, 2016
Is it possible to compute the extent of human suffering and the trauma of the families whose lives have been permanently debilitated, of the millionswho for no fault of their own have lost their jobs, who have had to run from pillar to post just to keep afloat their cash-based farms and businesses, who have had to return penniless to their villages for lack of work, who have had to skip meals everyday since just to make ends meet, for the sick and the dying who needed medical care but were refused treatment at hospitals as they could not pay with the old notes.
“I and many others are skipping one meal a day to survive till employment returns,” said Kushwaha — a daily-wager, for whom even buying a detergent soap to wash clothes is a luxury now. — Business Standard, Nov. 20, 2016
Ours is an economy where 98% of all consumer transactions take place in cash; where 490 million, or 93 % of workers, are employed in the unorganised sector — which means the vast majority of them are paid in cash, don’t get any notice before being fired and don’t get any severance packages to tide them over in hard times.
Ours is a country — where only 130 million people, or 10% of the population are properly equipped for electronic payments of any sort; where the poorest 50% share only 3% of its wealth [value of all assets of worth owned by a person] — which works out to approximately 6,600 rupees each — and crucially, have no viable access to formal banking.
Theirs, is an ecosystem ravaged by two consecutive years of drought and crop failure, whose negative multiplier effect has led to a slump in the rural economy and beyond — a loss of over Rs. 2 Lakh Crore annually.
It is improbable that this government lacked knowledge of these harsh economic realities — and yet, to attempt a speculative move as turbulent and repressive as this, was to gamble with the lives and livelihoods of the weakest and the most disenfranchised.
“It is natural law that chaos takes its toll most heavily on those who are the weakest. The whole point of civilization and an ordered society… is to safeguard those who can’t defend themselves.” — Firstpost, Nov 12, 2016
As a counterpoint, it is definitely accurate to say that thousands of people die everyday in India due to lack of food, medicines, shelter.
Of course they do, as they have always done.
India is an immensely large and largely poor country. Life, for the wretched, has always been that way. So if you’re looking for someone to blame, you could start with the discriminatory nature of the caste system, failings of ancient rulers exacerbated by the British colonisers and then a series of successfully incompetent government policies, our general lack of compassion and so on.
But none of those issues can excuse the fact that, in this case, innocent citizens have died as a direct consequence of an act of government — one in which the clearly foreseeable outcome was one of tragedy.
It can’t ever be proved that demonetisation was in fact a cynical political calculation in the garb of a moral crusade towards social re-engineering. The double-edged sword that is our demographic dividend will ensure that Indian economy continues to grow steadily, but the true plight of the poor will never register as more than just a mere dip in the numbers.