In the region marked by class and caste inequalities, where a cashless economy is a distant dream, there is some doubtful support for Modi’s move, but mostly concrete hostility.
Jhansi: Almost a month after Prime Minister Narendra Modi announced the scrapping of Rs 500 and Rs 1000 notes, the socio-economic fabric of Bundelkhand – one of the poorest regions in central India comprising parts of Uttar Pradesh and Madhya Pradesh – is slowly crumbling. The shortage of cash in banks, a parallel black economy, an illegal cash-barter system and deepening feudal repression have intensified the woes of this largely agricultural belt, which is already reeling under the impact of three consecutive droughts and then a flood this past monsoon.
The farmers had barely recovered from the devastating impact of climate change in Bundelkhand and ever-mounting cycles of debt, and now the government’s demonetisation move has come as a bolt from the blue for them. Not just farmers, but everyone associated with agricultural trading stands to lose out on a large portion of their incomes. The seasonal nature of agriculture and allied businesses means that the impact of the losses incurred over the next few months will have ripple effects on farms’ incomes throughout the next year.
Bundelkhand is a crucial microcosm of how demonetisation has affected poor regions of the country. With more than 45% of its people living under the poverty line – more than half of them fall under the Antyodaya category (extremely poor) – a majority of agricultural land owned by a small section of upper caste Hindus, an abysmal literacy rate, and starkly high malnourishment levels, Bundelkhand has been badly affected. The region, which is composed of 13 districts and spread across two of the most densely populated states, is an important signifier of how people are coping with the effects of demonetisation.
“Jab white nahin hai, toh kaala kahan se aayega (when there is no white money, where will the black money come from?),” Makhan Devi, an agricultural labourer in Shimariya village of Jhansi said. Devi’s statement summed up the overarching emotion that echoed in Bundelkhand. Most people in the region deposited the few old notes they had saved for emergencies in banks immediately after Modi’s announcement on November 8. However, since then, as banks have struggled to replenish their cash stocks, the rural economy in the region has derailed. Usually, each bank in the area caters to people from 30 to 50 villages, meaning that every person has to travel anywhere between two to 10 kilometres to get to a bank.
Every day since demonetisation was announced, people travel the distance, queue up for hours in front of the bank, only to go back with dashed hopes as bank officials express their inability to give people their own money. This has led to widespread chaos and frequent mob-like reactions, with many of them resorting to chakka jams, vandalism and abuse.
The majority of people complained of poorly-stocked homes, a failing health machinery and apprehensions of a famine-like situation.
The most immediate victim of the chaos is the farmer. Barring a few upper caste Hindu peasants, most farmers in Bundelkhand are either small or marginal, owning less than five acres of agricultural land. After three consecutive droughts, the extended monsoon destroyed most of the kharif crop this year. A lack of planned irrigation and scant water resources in the region means that the farmers are heavily dependent on the monsoon and as a result, kharif is their main cropping season. But the floods this year left the farmers to deal with the twin blows of low production and poor quality crops of urad dal and groundnuts.
The only silver lining was that the wells, ponds, rivers had abundant water after the rainy season. The farmers kept their spirits alive in hope to make full use of the stored water in this rabi season when most of them sow wheat, a crop that is bought by the government at a fixed price. Despite lower profits, the assurance that the government would buy their crops held the farmers together in a crisis-ridden market.
However, struck by demonetisation, the farmers have neither been able to sell their kharif produce smoothly nor do they have enough resources to sow wheat on time. The sowing season usually begins around the first week of November and ends around the second week of December. With that coinciding with the government’s demonetisation drive, the farmers are left with no coping mechanisms.
“Road pe aa gaye hum sab toh (We have all become street-dwellers),” said Mukesh Yadav, a marginal farmer in Kaudiya village in MP’s Tikamgarh. Yadav had stored some stocks of grain from the last harvest but is wondering how his family will survive the month of December, once the stocks finish.
Yadav is one of the relatively prosperous farmers in Kaudiya, a large section of residents being landless Adivasis. “With half of our urad destroyed, we were already full of anxieties. Now after notebandi, the bania (trader) has slashed the prices almost by half. Our urad dal is now selling for Rs 45 per kg, almost Rs 30 less than the market price,” said Yadav.
Yadav and many like him were forced to sell their Kharif crop for reduced prices as most of them are dependent on this cash to buy seeds for the next cropping season. This has either led to severely late planting or erratic watering of wheat in the sown fields. In most places within Bundelkhand, many farmers have either not sown crops on their farmlands or could only sow half of the land, contingent upon how much cash they could recover – on an average most could recover only a little more than 60% of their input cost (based on an informal survey), thereby incurring massive losses.
Consequently, the vicious cycle of debts that they were caught in because of the long-drawn agrarian crisis in Bundelkhand has only gotten worse.
The region is also home to a little more than 25% Dalits (2001 census). Mostly landless and living under poverty line, they have historically been surviving as agricultural labourers or sharecroppers. However, in the last three decades, many of these families have preferred migrating to cities which offer them better wages for unskilled work. All the 13 districts of Bundelkhand witness mass migration of Dalits to brick kilns, construction sites or small factories every year. Over time, they have become bound to labour contractors, who not only provide them work but also lend them money on interest during emergencies.
The crisis of agriculture over the last few years has moved them away from sharecropping. Poor returns, coupled with an ever-increasing feudal oppression by the upper caste landlords – Thakurs and a small section of Yadavs in this case – who have cornered most of the region’s resources, made migrating to cities more lucrative. This has transformed Bundelkhand into the biggest region of distress migration in north India. Some estimates claim that around 50-70% families migrate to cities for work, which means that the agrarian crisis has impacted a majority of families across caste groups.
For this section of the population, demonetisation has hit the hardest.
Forced to stay back in villages because of cash shortages in cities, they are struggling to get even their measly daily wage of Rs 200 or even a lesser amount in their respective villages. “The thekedaar (contractor) says that he has no cash and offers us old notes. We had no option but to accept old notes,” Ram Charan of Chandranagar village in Banda said.
Many said that the petrol pumps came to their rescue as they could exchange their old notes the labourers got as wages. But after 2 December, when the government stopped the petrol pumps to accept old notes, the miseries of labourers have escalated.
Clearly, demonetisation has altered the migration pattern of the region, and as a result, labourers are fighting to survive. “I do not have cash to buy even a bus ticket to Delhi. How will I survive in cities? In the last one month, many of my relatives have come back from cities. Our city thekedaar himself is short of cash. He wants us to work on credit but that is really difficult. At home, there are always a few who help with our daily needs, but that is not the case in cities,” said Om Prakash of Udhana village in MP’s Chhatarpur.
Experts claim that migration in the area has reduced by half. “In villages after villages, we are witnessing people coming back from the cities. Usually, this is the period in which they go out, especially after Diwali, only to come back after six months during the time of Kharif sowing season. Notebandi has disrupted the cycle. With no or little help from the rural economy or the government, one can only wonder how they would survive the next few months. I don’t know but this is a curious case of what we may call reverse migration,” said Jhansi-based Sanjay Singh, the national convener of the Jal Jan Jodo Abhiyan, a pan-India water literacy programme managed by various NGOs.
The labourers are now looking for agricultural work but given the distress levels of farmers, it may be hard to come by.
Arhityas are commission agents who help the farmers sell their produce. They also double up as traders (buyers), seed-sellers, and most importantly, money lenders. Usually, the chain of exploitation starts from this section of the population – a minuscule minority comprising mostly Banias (a caste group composed of mostly traders) who pull the price strings in agrarian markets. Faced with a cash crunch, many of them complained that their businesses fell anywhere between 40% to 70% but also felt that Modi’s demonetisation drive is for the greater national good.
Concentrated mostly in small towns across Bundelkhand, Banias are wealthy and own a substantial portion of real estate in the region – much of it as benaami properties. For them, demonetisation has been easier. Villagers in most places said that the Banias have become mules for exchanging cash in the last one month.
“For every 500 we give, the Bania pays us Rs 400,” said Dhaniram Raikwar of Bhagwan village in Chhatarpur. In other villages of UP, the rate of exchange was more than 50%, with farmers getting only Rs 250 for an old 500 rupee note. The illegal cash-barter system has mushroomed dramatically in Bundelkhand, something that every villager complained about.
Money-lending businesses run by Arhityas have also flourished. A swelling need for credit has chained the farmers and labourers to Arhtiyas further.
In most villages, the farmers also said that the Arhtiyas have imposed their own conditions for purchasing crops. “The Bania told all of us that if we sell our urad dal at Rs 40 per kg, he will pay us in new notes. But if we sell it at the market price of Rs 45, he will give us old notes,” said Mukesh Yadav of Shimariya village in UP’s Jhansi.
The emergence of a parallel black economy due to demonetisation, and a tightening of the age-old unregulated, exploitative credit network has clutched Bundelkhand’s economy by its neck. Inadequate institutional lending infrastructure in the region has only made matters worse.
Is there a change in the political narrative of demonetisation?
According to many initial reports, the thought that the rich will be severely affected made the poor embrace prime minister’s move. However, a month after demonetisation, the upper class in Bundelkhand have evidently exploited their powers to secure themselves from any adverse effects. The poor in Bundelkhand have slowly but consistently been realising this aspect of demonetisation.
“Bade logon ko koi nuksaan nahin hua, jo hua hamara hi hua (The rich did not lose anything, only we suffered), said Geeta, a resident of Nasaini village in UP’s Banda. In most districts of the region, this was the constant refrain.
“We don’t know whether notebandi erased black money or not but we can only see the Banias profiting from it,” said Rahmat Singh of Udhana village in MP’s Chhatarpur.
While people may not be aware of the larger change in the government’s narrative on demonetisation – from an attack on black money and terrorism to rhetoric about a cashless economy – they are increasingly seeing only the Banias and known BJP activists supporting the move. This has made them suspicious, if not antagonistic.
Even when they were unsure of their opinion on the scrapping of Rs 500 and 1000 notes, they alleged the bank officials were laundering new currency for the Banias. In village after village, this was a common charge – although unsubstantiated – against bank officials.
“It is not as if the bank does not have money but all of it is made available only to the big (rich) people,” said Mahoba’s Prakash Khushwaha as he scowled with hostility. Khushwaha and many others have been lining up for money at the Gramin bank for the last seven days, but with no success, and everyone has the same allegations to make.
While many of them blame the government for such poor preparations, several others under the influence of BJP, blamed the bank officials solely. “Modi is honest but he must fix these bank officials. They should be immediately punished like it happens with criminals in the Arab countries,” said Prashant Gupta, a small trader and a BJP supporter in Mahoba.
The change in the government’s narrative on demonetisation is accompanied by the demand for greater authoritarian measures on ground. Such demands, according to political adversaries of the BJP, have surfaced only in the last one week. They allege that the BJP activists have realised that demonetisation has clearly not worked and thus, they have made scapegoats out of bank officials.
“Bank official is the fall guy now. Queues have only been growing as banks do not have cash. We have seen the BJP activists campaigning in villages about corruption in banks,” said Ramesh Yadav, a block level Samajwadi party activist in Chandranagar, Banda. Similar arguments against bank officials emerged in most villages of Bundelkhand, especially in poll-bound UP.
Building ground for authoritarianism to hide a government’s failure, many commentators say, is politics at its cynical worst. However, despite these political tractions from all sides, in the caste and class-unequal Bundelkhand, where a cashless economy is a distant dream, the larger dialogue around demonetisation is characterised by doubtful support, if any, but definitely concrete hostility.Now that the revenue secretary Hasmukh Adhia has accepted that most of the demonetised notes may be back in the banking system, undermining all prospects of any windfall gains, the whole exercise seems only like a cruel joke on Bundelkhand’s poor.