note demonetisation

Demonetisation will hit the cash reserves – and health – of millions of sex workers

The access to healthcare and contraceptives for women and transgendered people in sex work is linked to their financially stability.

Days after Prime Minister Modi announced on November 8 that Rs 500 and Rs 1,000 notes would no longer be legal tender, newspapers reported that sex workers at India’s largest red-light district, were “doing brisk business” as they were accepting old currency, and that Usha Co-operative Bank, operated by a multi-purpose society for and run by sex-workers in Sonagachi, had earned up to Rs 55 lakh in 48 hours after Modi’s announcement. The bank earlier saw deposits worth Rs 5 lakh in a day, on average.

It was not surprising that a story like this was picked up – the idea that the corrupt, in their desperation to get rid of de-valued cash, should try to blow up this ill-begotten wealth at brothels like those in Sonagachi fit in with the smug, moral crusade of demonetisation, which suggests that everyone who hoards cash is part of a black economy and supports corruption (and even terrorism).

But this simplistic narrative leaves out the poor – migrant labourers, farmers, domestic workers, among the biggest casualties of demonetisation, whose misfortunes have proved that it is not just the corrupt who hoard cash in India. Those from lower-income groups, many women and marginalised communities, in particular, lack sufficient documentation and do not trust the formal banking system.

But more crucially, this narrative fails to recognise sex-work as labour, performed by millions of undocumented labourers – women, transgenders and minor girls – who are only paid in cash and whose only recourse to economic stability are small co-operative banks like Usha, which had not been authorised to exchange demonetised notes for valid currency,

Three weeks since the move was announced, the rules have changed once again: as of November 24, people can no longer exchange their money over the counter – the earlier deadline was December 30 – and the co-operatives that farmers and sex-workers are reliant on are stuck with crores in old currency notes.

“We have 30,000 account holders and our daily deposit from sex workers used to go up to Rs 4-5 lakhs,” said Rita Roy, Secretary, Usha Multipurpose Co-operative. “Now it has gone down to a few thousand rupees. We also don’t have enough supply of cash from the bank to meet the demand for withdrawal from our members.”

As a result, several sex-workers cannot access their savings at the only bank where they are welcome. The effect of demonetisation on co-operatives has had a direct impact on large-scale red-light districts like Sonagachi, and Sangli in Maharashtra, where thousands of sex-workers are reliant on informal banking, to protect themselves against economic abuse by brothel owners, for healthcare, and to guard against sexually transmitted diseases.

Unrecognised labour

One of the reports that described the boom at Sonagachi quoted Bharati Dey of the Durbar Mahila Samanwaya Committee, India’s first organisation of sex workers, as indicating that after Modi’s announcement, customers eager to get rid of their Rs 500 and Rs 1000 rupee notes, were passing them off to sex workers.

This story found echoes across cities, where not just purported black money hoarders but even tax-paying citizens palmed off their devalued currency to domestic workers and vegetable vendors, to people who were reliant on cash, and did not yet know that notes of Rs 1,000 and Rs 500 were being demonetised. In this way, demonetisation affected sex-workers much the same way it affected various groups of poor – immediately reducing their capacity to pay rent and buy food.

“The cancellation of Rs 500 and Rs 1000 notes has killed us,” said Bulbul, a sex worker, in Sonagachi. “Customers have stopped coming as they don’t have change or new currency.”

Kundan, a pimp, estimated that trade had gone down by at least 60%. Now that banks are no longer exchanging old notes, sex-workers find themselves unable to pay rent or buy provisions.

“How can our girls accept invalid notes if they cannot use them for their daily expenses?” asked Kajal Bose, secretary of the Durbar Mahila Samanway Committee. “The customers are not willing to pay by the Rs 100 notes they are withdrawing from the banks or ATMs. They are holding it back and most of them are paying our girls with the new Rs 2,000 notes. How do you find the change to buy vegetables with a Rs 2,000 note?”

To cope, the women of Sonagachi and Sangli have begun to rely partially on barter, others are insisting customers carry small change. A few returning customers have been offered credit.

“Suppose I am charging a customer Rs 3,000, I am taking Rs 2,000 from him and asking him to pay the rest when he comes the next day,” Smita, a 29-year old sex worker said. “But this can be done only with the regular customers, and it cannot go on for too long.”

Her neighbour Nisha agreed. “Yes, we are now spending our money sparingly,” she said. “Earlier we used to indulge in some spending which was not necessary but now we are counting every single rupee.”

Non co-operative government

For her book Dangerous Sex, Invisible Labour, published in 2011, Dr Pratibha Kotiswaran divided time between the sex-workers of Sonagachi and the temple-town of Tirupati in South India, and found several different types of sex workers, each with their own economy and place in society. These were:

  • Women who have been trafficked into sex work and are paying off a debt.
  • Women who work almost like contractors, splitting their profits with their brothel keepers.
  • Independent sex workers, including secret sex workers.  

She also discovered that sex workers had different social positions depending on their location. In Sonagachi, workers were typically better protected from attacks and corrupt police, due to their high numbers, but were shunned by the public for working in a red-light district. In spaces like these, community owned and run co-operatives are essential. For instance, thanks to the Usha Co-operative Society, 70% of the sex workers at Sonagachi have Aadhaar cards.

But before 1995, when the Durbar Committee was first formed and floated the idea of community-run co-operative banking, sex-workers in Sonagachi were unable to open bank accounts because they could not produce the requisite documents – banks required identifying documents like rent receipts, electricity or phone bills, but sex-workers were prohibited by law from renting rooms to conduct commercial sex-work.

In the absence of rental agreements, sex-workers were asked to produce husbands or fathers to vouch for them, and failing to do even this, became vulnerable to abuse from bank employees if their identities as sex-workers were discovered.

The inability to enter the formal banking system had other more violent repercussions. Most sex-workers kept their money in unorganised financial institutions like chit-funds or stored it with brothel owners. Frequently, they were robbed or cheated of this money, and the inability to repay debts meant that they were reduced to living like bonded labourers in brothels.

The fear of being robbed was so acute that the Durbar Committee found several sex-workers refusing to save money at all, immediately spending whatever they had earned for the day, studies over the years have shown.

With the demonetisation, we are seeing a repeat of such patterns in areas like Gokulnagar in Sangli, where sex-workers have gone back to borrowing money from their brothel owners.

“Modi sarkar should have brought [back] money from foreign banks, this is creating a lot of pressure on us,” said Seema, 29. “We are borrowing money to meet our daily needs.”

In areas where the Veshya Anyay Mukti Parishad, a collective of female sex workers, is active (such as in Sangli) there is no rate of interest on the money borrowed, but this is not the case everywhere. Roopa, a sex-worker from Swaroop Theatre area in Sangli, said her brothel owner lent her money for her daily needs, but her friends were being asked for a commission of 10% and 20% to exchange Rs 500 and Rs 1,000 notes.

Immediately after Modi’s announcement, Roopa said Ramesh, the son of her brothel owner, helped nearly 20 women exchange their demonetised cash at the bank. Now that the over-the-counter exchange of old currency notes has come to a halt, women are helpless.

Demonetisation and sexual health

But the most crucial impact of demonetisation on sex-work is linked to their access to healthcare and contraception, enabled through co-operatives like Usha. A study by the United Nations in 2014 estimated the population of sex-workers in India to be approximately 8,68,000 women, of which 2.8% were HIV+.

By encouraging savings among sex-workers (including minor girls and transgender people), running a micro-credit programme, creating job alternatives for retired or ageing sex-workers, co-operatives like Usha have been able to provide some economic stability to sex-workers, which is under threat because of demonetisation.

Depleting savings directly affect the negotiating power a sex-worker has over customers – strapped for cash, particularly if she has debts to pay or a family to feed, a woman is less likely to insist that her customer use protection during sex, if it means she might lose him.

While prostitution is illegal in India, a study in 2014, on the economics behind commercial sexual exploitation, found that the money generated through sex trade in India stood at 343 billion dollars, benefitting several agencies such as traffickers, brothel owners, money lenders, law enforcement officials, lawyers, judiciary and to an extent, the victims of commercial sexual exploitation.

If women from low-income groups, like domestic labourers, or women facing abuse find it hard to access formal banking because they view it as a hostile space, this is especially true for sex-workers, who are often from the most backward classes and castes in society, trafficked as minors without documentation, and now, without the protective shield of a co-operative.

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