Wednesday, December 8, 2021

Is it really ‘poor’ who are queued outside banks?

Opposition parties and media have cried themselves hoarse that poor are suffering and dying by standing in queues outside banks after the demonetization was announced by Prime Minister Narendra Modi on November 8.

Ten days later, on November 18, Honourable Supreme Court (SC) went to the extent of fearing “unrest among the masses” if queues continued any longer.

That the Supreme Court’s fear has come to pass—more or less since two weeks still remain to December 31,2016 deadline—and the “deaths” lament is bogus, it’s time we seriously analyse whether or how much the “poor” have suffered by standing outside banks in queues.

Krishnamurthy Subramanian and Prasanna Tantri in an incisive piece in Mint have argued that the “poor” wouldn’t have visited no more than 1-2 times to banks since the demonetization happened. Indeed, they’ve come to the startling conclusion that the queues outside banks are made up of those who are helping dishonest to “correct” their ill-gotten wealth.

The two academics associated with the Indian School of Business have arrived at the logic by irrefutable evidence. Unlike the whims and suppositions of opposition and media, the two have used date from the National Sample Survey Organization (NSSO) survey to come to this conclusion. This survey of 2011 comprised of 500,000 individuals across the country.

The data crunching has revealed that the bottom half of the population—which includes daily wagers, rural workers, weekly or fortnightly wage-earners—earns less than Rs 1,350 per week. Even the bottom half of the urban population makes no more than Rs 1,970 per week. As per this estimate, even if “poor” had saved all their earnings and spent nothing, they would still not have had more than 12,000-14,000 saved till December 30, 2016. It would thus necessitate only 1-2 visits to banks.

This of course goes with the caveat that this set of “poor” people must have been engaged for every single day in these seven weeks. We know though that such wage earners, in practice, are often under-employed.

Thus, who are the ones who are forming queues outside the banks? (not ATMs) could thus be one of the these two set of people:

(i)people who are not poor and;

(ii)people who are acting as fronts for dishonest people and assured of a commission/continuation of job etc.

Nobody is saying that the people of the first set who are forming queues are not inconvenienced. But to term them “poor” is disingenuous and over-the-top propaganda. As for the second set of people, no sympathy should be pro-offered. The din by Opposition and media might make them appear pro-poor but has little connection with ground reality. 

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