Coming To Terms With Demonetization, And Its Aftermath 

Mahesh Vijapurkar

It is almost a month since demonetisation. Your cash suddenly became trash – who kept the 100s when 500s were just about enough for buying anything, anyway? So, did your life change? It did – you couldn’t withdraw from your ATM, nor from the bank where you had an account. One had to struggle to draw some, because life without cash is so different, so terribly inconvenient. You are ready to tell Narendra Modi his was a wrong decision.

The sudden absence of ready cash is so unlike for those who are not used to a life without cash, period. Like the maid, the driver, the cook, the farm labour, the plumber, the cobbler, and the long list. By the time the second part of the month begins, they are without what we know is the stuff of life. It didn’t matter to them so far, but life has begun to hurt much more. Their salaries have been paid, but they cannot use the Rs2000 banknote.

It doesn’t fetch them the stuff they want because small change is so acutely scarce. There are not enough 100s, 50s and 10s for ease of day-to-day transactions. Their modest requirements are bought not from one source but are shopped from outlets scattered around their place. They don’t pay their mobile bills by plastic money and the Rs50 recharge is overdue, cutting them off from the world.

These low-earners in the service sector were amused at your embarrassing ‘cashless’ status, because in their own lives, money in hand after the 10th of a month, or any month, is an aberration. They never had enough to see themselves through the month. Their salaries paid in the past week in Rs2000 bank notes were notional – they couldn’t use it with ease. It is hurting, but they are resigned to the reality. After all, life is a hardship anyhow. This was another topping.

Your grocer who generally refuses credit may be ready to accept a credit or a debit card, with some heartless among them loading the 2 – 3 percent, which is his cost for the facility, on your bill. In many a transaction, the big notes required a lot more to be bought before the change would be provided. Instead of your requirement of stuff worth Rs350, you had to lengthen the list to some Rs700 to get Rs1,300 back.

Life is coming to a new normal. People are speaking of how their expenses came down – November was not like October. They are grateful demonetisation happened after the first week was past and moneys drawn and spent as usual. Yet the pinch was felt. The small coins which went into the kids’ piggybanks. The wily shopkeepers had always insisted they were without it even when you proffered a ten-rupee note.

Who had thought that the Re1, Rs2, 5, 10 coins which weighed down your trouser pockets or the clutch bags would suddenly become so important? The other day, the only denomination less than Rs2,000 my bank could provide was a packet of 10 rupee coins. They became respectable. And those who have it spend it with care for who knows when the currency supply flow would ease?

There has been a drop in the middle class’ expenses but it is only transient, for sooner or later, the banks would honour a cheque drawn on self without batting an eyelid. Most purchases were postponed, not entirely abandoned. After a slowdown, life would return to what it was, but to many others, it was as it was, and probably would remain as was. They are the unbanked who regret not having opened the Jan Dhan bank accounts.

Prime Minister recently said that if the account holders held on to the cash which came from others for laundering through their accounts, he may come up with ideas of how to ensure that it remained in their accounts. Do not return it, he has said, for it was ill-begotten cash which belonged to some tax evader. But to the poor, cash now is better than cash later – the birds in the bush are not that attractive.