Living without Cash in India
At 8:00 pm on the 8 November, the Indian prime minister, Narendra Modi, addressed the nation to announce that effective from 12:00 am, 9 November, 500 and 1,000 rupee notes will no longer be legal tender. Overnight, around 85% of the cash in circulation in the country became worthless in an effort to fight black money. The notes are to be submitted to the bank and replaced gradually by new 500 and 2,000 rupee notes. Circulating these would take time and citizens were asked to be patient. Since India’s economy overwhelmingly depends on cash transactions, helplessness and apprehension have spread like wildfire. The press reported critically and social media were flooded with images of people queuing up to change their old notes and of ATMs running out of money. A public debate has been sparked that directly concerns the questions raised in the SFB’s project A5 about the role of banks in poor people’s lives.
Among a set of new development measures, India is preparing to enhance cashless transactions and include poor people equally into the banking system. There has been massive investment in digital infrastructure in recent years. How far does it reach? Can the county support digital banking on a scale large enough to include all citizens? The experience of demonetization suggests otherwise. People have been stranded without cash. There are long queues, hassled shopkeepers, workers going without pay, and deserted markets. Prime Minister Narendra Modi countered his critics by insisting that fighting black money and corruption was a priority: “Today’s pain Forever’s GAIN”. From the governmental perspective, complaining about demonetization makes a person “selfish, suspicious and immoral” at best and “anti-national” at worst. The debate has quickly turned from questions of mismanaging demonetization or political failure to more general discussions of patriotism and the willingness to suffer for the greater good of the nation.
Pay cashless is the new slogan: “If you don’t have anything to hide anything from the state, why don’t you pay by card or use an online payment app? Why don’t you contribute to a transparent society?” Social transformation is on the way. More shopkeepers have most recently started to accept paytm, a digital payment tool. E-Wallet apps are just as common in India as debit and credit cards. So why do poor people not use them? The crisis of demonetization has thrown into sharp relief the unevenness of digital modernity. Which cities and which suburbs have the best electricity supply? Where can one get a broadband connection? How good is the telephone signal? Who has a smart phone? What is the quality of locally available computer and mobile phone hardware? Answers to these questions speak to the profitability of digital banking and expose its multiple exclusions. It speaks about a layered geography, in which territories are radically differentiated by citizens’ ability to participate in a world of digital globalization.
Image source: Personal (15 December 2016)