note demonetisation

Demonetisation: In a hamlet in Bihar, income and expenditure is down, but hopes are up

Despite great difficulty in the month since Narendra Modi withdrew old Rs 500 and Rs 1,000 notes, there is support for the demonetisation policy.

The last 30 days have not been easy for the people of Bhindu Paimar.

The standard demonetisation narrative has played out in this tola (hamlet) in Karjara panchayat in Gaya, Bihar, about 20 km from Gaya city, on the road that leads to the ancient Buddhist university of Nalanda.

Earnings have fallen. Most people in the village work as daily-wage workers in Gaya, earning anywhere between Rs 225 and Rs 250 a day.

Before demonetisation, we used to get work 20 days in a month, said Bhim Kumar, a young man in the village. However, the demand for labourers has dried up in the town since November 8 when the demonetisation announcement was made. At the same time, the local grameen bank is not letting people withdraw more than Rs 2,000 a week. “We are borrowing from here and there to make ends meet,” said Kumar.

Talk to others in the village – like Lallan Paswan, who has a small shop selling household provisions right next to the highway – and you hear a similar narrative. The monthly turnover at his shop is down by half. His monthly income has dropped from Rs 5,000 to Rs 2,500.

Despite these difficulties, support for demonetisation is high in this village, which is what this reporter also saw while travelling southwards from Raxaul, on the India-Nepal border, towards South Bihar. In Raxaul, Bettiah, Gopalganj, Darbhanga, Patna and now Gaya, public opinion has split over demonetisation.

This split is not easy to understand. Not everyone hurt by demonetisation opposes it. Similarly, not everyone relatively insulated from its worst fallouts supports it. In short, there are complex reactions to demonetisation.

What Bhindu Paimar thinks

Shopkeeper Lallan Paswan is in favour of the entire exercise.

“This country has been lying spoiled for 70 years now, it is filled with corruption and cheating,” he said. “Demonetisation will bring equality. There will be no poor, no rich. Everyone will be equal.”

But why does he think demonetisation will bring equality?

First, Paswan said, the government has put a cap of Rs 2.5 lakhs on deposits of old currency into bank accounts. “Any amount you declare above this will be heavily taxed,” he said. Due to this, he added, two things will happen: black money will either come into the banks or, if not declared, the rich will have to burn or bury their stashes of it.

Either way, the outcome will be good, he said.

“Taxes levied on black money coming into banks will be used for nation building,” said Paswan.

He added that the money left undeclared will reduce the gap between the rich and the poor – and help bring down prices.

Right now, “if I have Rs 5, someone else has Rs 1,000, they can pay much more than me to buy something that I need too”, he said. But with demonetisation “mehangai kam hogi”. Prices will come down.

This link between demonetisation and a reduction in prices has been drawn by others too. Three weeks ago, Sachidanand Singh, a wholesaler at the vegetable mandi near Patna’s Gandhi Maidan had said this as well.

Also, the anger in Bhindu Paimar about inequality is the rage of people who have suffered because of it.

A question of inequality

Paswan pointed towards a bridge to the left, just before the road reaches the village. “All the land from there till 2 km ahead belongs to one zamindar in our village,” he said. This is about 1,200 acres. In contrast, the rest of the households in this hamlet and the adjoining hamlet – about 140 households, according to Bhim Kumar – have no land at all. There has not been any land redistribution here.

Members of the Paswan, Prajapat, Bania, Manghi and Yadav community live in this hamlet.

In the old times, each had different occupations. The Paswans worked as guards, said Brahmadev Prajapat, an old man around 60, who was sitting at Paswan’s shop reading a Hindi newspaper. The previous day, the Union government had announced that it was going to print new Rs 20 and Rs 50 notes. Prajapat was reading the news report closely to check if the old notes were still valid. The Prajapats, he added, were potters. Banias were small businessmen. The Manghis and Yadavs worked in farms.

As old caste and economic relationships crumbled, everyone gradually began working as sharecroppers in fields owned by local zamindars – there are three or four families here who own large tracts of land.

However, in the last 10 years, said Paswan, the big zamindars have stopped giving out land for sharecropping. He said that this happened after the government proposed a new law on sharecropping.

The zamindar with 1,200 acres gets people from outside to come and work on his fields, said Bhim Kumar, or he lets it lie fallow. As the old moral economy that protected everyone in the village fell apart, the people of Bhindu Paimar have been hit hard.

Some have begun migrating to work in brick kilns at Delhi, Kanpur and Banaras. It is hard work, said Paswan. “People have to work 12 to 15 hours a day,” he said. “And if they migrate, education is good as over for their children.”

Others, as Bhim Kumar said, go to the four labour chowks in Gaya. This, again, is a precarious existence as it is far from certain that people will get work every day. Further, the probability of finding work falls as one nears 40 and the body’s ability to do hard physical work erodes. These are precarious lives.

Prajapat agreed. “Should we educate our children or eat food?” he asked.

And all this while, as Paswan said, “The land lies fallow and uncultivated in front of us.”

Given this, anger about inequality has mounted in the village.

“He has 100 cars rotting in his garage, and a house over 12 acres,” said Paswan, referring to the local zamindar, adding, if the government gave an acre each to 1,200 families imagine how many families would benefit. “With that, this problem of migration will be fixed.”

For that reason, he is hoping that Prime Minister Narendra Modi will follow up on demonetisation with land redistribution. “If Modi picks up land redistribution after demonetisation, then we will have Ram Rajya.”

A slender hope

That is the calculus of this moment at Bhindu Paimar.

A mix of anger, and hope, is resulting in villagers’ support for demonetisation. They applaud Modi for having taken a decision that no one else did in all these years. But they also wonder how long they can wait.

Right now, as Bhim Kumar said, villagers are managing by borrowing from here and there. Their expenditure has fallen so much that the local vegetable seller has stopped visiting their village. “ATM queues in Gaya are not as long as before,” said Kumar. “Maybe that means things are about to improve.”

It is a slender hope. The money supply is improving slowly. In Gaya, nationalised banks are now allowing account holders to withdraw up to Rs 24,000 a week. But the condition is still the same in Grameen banks and in villages serviced by banking correspondents. In this part of Bihar, the first is unable to pay more than Rs 2,000 a week. The second, about Rs 1,000 a week.

A month down the line, a waiting game continues. Accompanied by ever-tightening belts.

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