Benefits of Demonetization & cashless economy for Poor

Ever since #Demonetization was announced on Nov 8th , there has been lot of hue & cry  from different sections of  the society. People who never bothered about the well being of poor, farmers & the downtrodden have become their messiah overnight and have been wailing &  beating their chests at top of their voice ,  as if someone in their families have died.  Well , let me clarify that I  am not generalizing all the people in our country but the corrupt politicians, businessman, tax evaders, terrorists, Maoists and Modi haters who actually have been hurt hard due to demonetization but cannot their agony in open. As a  result the best excuse to go after this decision , Modi government and Indians who are supporting this step is to raise & hide behind  the suffering of the poor people.

I am not raising objections against all those people who have genuine concerns and feelings for the poor, especially daily wage laborers, small farmers ,  etc. who have been hit hard by this move. I too understand the pain & challenges of poor and have deep sympathies for the families who lost their near and dear ones due to demonetization ( Still an open topic for discussion ).

But with due respect I would like to disagree with all such people who are arguing that poor will be adversely affected by this move. In my opinion this particular move will be beneficial to this particular section of the society. Here are the reasons why :

  • Economic Inclusion:   No doubt, India is the  fastest growing economy in the world and have made tremendous progress over the years, there has been greater urban-poor divide. On one hand sizeable portion of population has moved in the middle and upper middle class, considerable section of society still lives below poverty line. These include laborers , farmers etc. who need to be brought in the formal sector of economy. These people may be poor & illiterate but they are not stupid enough to understand the benefits of being part of formal economy. Instead of waiting for the perfect day & perfect condition ( which will never happen ) , demonetization & subsequent step of government  to go cashless are bold steps which will leapfrog & align them to this growth trajectory.
  • Reduce impact of corruption : The poor has always been the victim of corruption. And he has been deliberately kept poor & illiterate so that he can be continued to be exploited as fodder for votes and milk the system in his name. What we are failing to understand is; the more we go for digital transactions , bringing poor in the banking system, encouraging cashless transactions, the more we are plugging the loopholes in the system which allows corruption to spread its root.
  • More social welfare schemes for poor : Reduction or parallel economy and increase of cashless transactions will help in  reducing the tax evaders and hence result in swelling of revenue coffers of the government. This money in turn can be used to spend on social welfare schemes like rural healthcare , education, electricity, roads etc. Ultimately it will benefit the poor for whom we are so concerned about. It’s win-win situation for both economy and the poor.
  • Reduce exploitation : Most of us must have seen that wherever payments and wages are paid in cash, people are being exploited. Even though minimum wages have been declared by government, people are made to sign on X amount but paid Y amount, where Y <X .When the owners will be asked to pay their workers through banks , they will have to abide by the rules of minimum wages , PF account etc. Also there will be digital trail to track the  actual earnings of such businessmen, thus tax evasion will be much difficult. Again there will be counter question that people will be asked to part with their earnings to their owners in cash once they are paid in full. But again the probability of doing so will not be as high as it is now.
  • Technology as an enabler : Remember the time when we had to wait for years to get a landline telephone in our homes ? No one thought this would change but with advent of mobile phones and the reduction in tariffs it changed the picture of society. What are was termed as privilege of rich has become just another item in the hands of even a rickshaw puller. The impact &  change is evident in the society. Similar kind of revolution is what I foresee now in terms of UPI, USSD, netbanking, Aadhar based transaction, mobile wallets, Paytm etc..Technology has the power to change our lives and believe me , technology will play a major role in elevating poor from their current situation.
  • Cheap loans : Being denied access to banking  system, it’s the poor who have to rely on sahukaars for loan who charge them interest ranging from 50%-100% p.a. Though there are several schemes of government to provide collateral free loans to poor but increase in tax revenue will help govt. to provide loans at much reduced rate of interest. Again its the poor who will be benefitted.
  • Security & convenience : The poor without banks have to keep money insecurely with them in their house which is prone to being stolen and also is dead money since it doesn’t fetch them interest. Having bank accounts will help them manage their money well and securely and also money in circulation is good for economy and banks.
  • Social Independence : It will provide financial and social independence to the poor & needy ; especially women who have to rely on males for financial planning  & help. eg: my maid in Noida used to earn but it was her husband who spent money, major part going for his drinking habits.
  • DBT ( Direct Benefit Transfer ) : The money provided in the schemes like MNREGA and other subsidies can be directly credited in the bank accounts of poor & farmers. This will also help reduce pilferage and reduce corruption where earlier money was directed to few corrupts whereas the deserving poor didn’t even get the minimum wages.
  • Windfall gain for poor : We all know that bank accounts of poor has been used to launder money of the rich. I agree it’s illegal but the poor has been paid commission for doing so. So in a way, it’s a windfall gain for the poor and has resulted in redistribution of wealth from rich to poor.

Let’s not deny the fact that in the short run there will be some amount of pain & suffering for  the poor but in the long run they will be one of the biggest beneficiaries of the  move. And all those who are crying hoarse for the suffering of poor should ask themselves – Haven’t these people suffered the most for past 70 years  ? Do you want them to continue to suffer them for next 70 yrs more or make them suffer for next few months which will eventually turn things in their favor in coming months and days. So instead of cribbing day & night, let’s try to help these people in adopting technology in their day to day life.

One saint  ( popularly known as Mauni Baba)  has rightfully saidIn the long run we all are deadbut before dying don’t you want to leave a legacy for coming generations which they can be proud  of ?




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