How the poorest escaped Rs 500, Rs 1,000 note ban

Lakshmi Kadam 50 a vegetable vendor in Navi Mumbai made Rs 2000Rs 3000 per day before the noteban Her earnings fell by 50 since She has a bank account but saves money on a daily basis in a local credit society ldquoI support the noteban but what are we small businesses supposed to do These earnings are not enoughrdquo she saidDressed in a white dhoti or loin cloth with a bright pink tilak or mark on his forehead Chandu Kokre shepherded about 60 sheep along national highway 60 30 km southeast of Mumbai Indiarsquos financial capital ldquoIt doesnrsquot matter to usrdquo the thin 28yearold told IndiaSpend when asked about the Indian governmentrsquos delegitimising of Rs 500 and Rs 1000 notesndash86 of currency in circulation by value ldquoWe donrsquot have bills that exceed Rs 50 and Rs 100rdquo he explainedOn November 9 2016 the Indian government scrapped Rs 500 and Rs 1000 notes resulting in long queues to exchange these notes or withdraw money in lower denominations and reduced shortterm income for many smallscale businessmen But the poorest labourers farmers small business owners and shepherds like Kokre appear to have been affected less by the move because they either earn too little to save or survive on what they themselves grow found IndiaSpend reporters in rural areas of Pune Ahmednagar and Palghar districts and urban areas in Mumbai and Navi MumbaiAs many as 2693 million Indiansndashequivalent to the population of Indonesiandashlive below the poverty line of Rs 27 a day in rural areas and Rs 32 in urban areas About 2165 million of the poor live in rural areas as IndiaSpend reported in October 2015 In MaharashtrandashIndiarsquos richest state by gross state domestic product and the second most populousndash197 million 1735 of 112 million are poorSeveral farming households told IndiaSpend they were not affected by the governmentrsquos move because they depended on their own produce for sustenance That did not appear to be the situation in urban areas where various media reportsndashsuch as this in the Indian Express and this in the Hindustan Timesndashreported survival strugglesAs farming recedes across India poor labourers proliferateNarayan Deo Rinjad stood in the doorway of his brick house in the village of Pandre Pade in Palghar district about 120 km north of Mumbai as a hen and its chicks explored the surroundings ldquoIt hasnrsquot affected us much because we eat what we growrdquo said the 43yearold farmer who lives below the poverty line and grows rice lentils chillies and cucumbersRinjad said the family buys oil sugar and spices from the market but stocks up for 15 days to a month as the closest market is 5 km away When the government announced that old notes would no longer be valid the family had Rs 5000 that they deposited in a bank and withdrew Rs 2000 Rinjad added he didnrsquot plan to go the bank anytime soon because he didnrsquot have an urgent need or time to spare from the sowing season the last trip to the bank to deposit and withdraw money took four hoursBut the number of farmers in India is falling while the number of agricultural labourers is increasing Farmersndashknown as ldquocultivatorsrdquo in census parlancendashhave reduced by 7 from 1276 million in 2001 to 1186 million in 2011 as IndiaSpend reported in August 2014 Agricultural laborers rose by 368 million or 342 to 1443 million in 2011 over the decadeDaily labourers who work on farms and rural construction sites also said they had too little money to be affected hugely by the demonetisation of Rs 500 and Rs 1000 notes but some said they werenrsquot taking money until their employers gave them small changeEven if the poor have bank accounts they may not use themKrishna Bihari Shukla36 works as a hamal in the vegetable market APMC Vashi We hardly ever get 500 notes So I dont see a change pictwittercom6MjMyvhoidmdash swagata yadavar swagata_thinks November 22 2016Krishna Shukla 36 dressed in a faded shirt paired with blue pants and an orange scarf counted his wages for the day all in denominations below Rs 50 which he had earned as a porter at the agricultural market in Vashi south of Mumbai ldquoWhere do we get to see a 500 rupee noterdquo he said wryly explaining he spends 26 of his daily earning of Rs 300 He gives his savings to a friend who has a bank account to send back home to his village in BiharEven though several laborers and farmers said they had bank accounts many said they have zero or little money in the account as they earn just enough for their daily needs Out of the 2551 crore new accounts opened under the Pradhan Mantri Jan Dhan Yojana Prime Ministerrsquos Peoplersquos Wealth Programme until November 2016 23 had no money in them according to finance ministry dataFurther many still depend on informal family networks or moneylenders to send and borrow moneyRani Devi 34 came to Mumbairsquos Tata Memorial Hospital two months ago to treat her rectal cancer Her husband a daily labourer in the northern state of Bihar came with her and hasnrsquot had a job since The family spends Rs 200 a day surviving in Mumbai and borrowed Rs 5000 from moneylenders in the village at an interest rate of 36 per annumldquoWe have a bank account but there is hardly anything left to save at the end of the dayrdquo said Devi her back resting on two plastic bags lined against the wall on the footpath outside the hospitalndashtheir makeshift home She was unclear about how the ban of Rs 500 and Rs 1000 notes has affected their familyThough some daily wage workers were paid in notes of Rs 100 or less some werenrsquot Jitendra Bhurkud a daily wage farm worker in Palghar district said his employer didnrsquot have Rs 100 notes so he continued to work without pay ldquoWe will get money once the employer has changerdquo he saidOthers said they had too little money to care about the move but that their businesses were impacted by a paucity of small change ldquoWe donrsquot have money so it doesnrsquot affect usrdquo said Rasika Lohale 41 who owns a small store in Wade Pali in northern Maharashtra adding that her business has fallen from Rs 500600 to Rs 300400 a day ldquoWe donrsquot eat meat nowadays because we donrsquot have the money for itrdquoIndiaspend is a datadriven publicinterest journalism nonprofit