India’s demonetization is having a major impact on her people, especially the poor and middle class. In a society that remains cash-driven, the removal of a considerable portion of exchangeable notes in a short period of time resulted in significant and in some cases unrecoverable consequences for a large number of honest, hard working Indians. However, while people complain, there are a number of benefits to demonetization.
What is demonetization?
Demonetization is the act of stripping the value from a unit of currency, making it worthless. In November 2016, Prime Minister Narendra Modi announced the demonetization of 500 and 1,000 rupee notes, giving all 1.25 billion Indians—as well as a bunch of tourists and expats—a couple hours to spend what they had or face repercussions. The decision removed 85 percent of the currency from circulation, leaving people and banks struggling.
Although the benefits of demonetization may eventually be realized—greater tax compliance, higher tax revenues, increased use and tracking of digital transactions, higher national net worth, and less counterfeiting, to name a few—the near term impact on the majority of the people borders on the criminal.
Are there any benefits to demonetization?
Who cares if the poor can’t pay their rent or feed their families? Demonetization is not about them, it is about the four percent of Indian’s with net worth exceeding 10,000 US dollars—even though we are not Indian and therefore not included in that four percent, we are happy to act as if we are elite members of the Four Percent Club. Although aspects of demonetization are enough to make grown ups cry—and some Indians commit suicide—there are some benefits to instantly eliminating 85 percent of India’s currency. To prove this point, we’ve compiled twelve great things about demonetization:
1. No more tipping. The cash shortage means tipping is becoming increasingly difficult. Prolific tippers find themselves with insufficient cash on-hand to engage in the gratuitous recognition of excellent service. It is possible demonetization will eliminate tipping in it’s entirety.
2. A chance to experience more of India. In the past, if an ingredient was needed for a particular recipe, it was enough to pass some money to the driver who would pick up the elusive spice. Since cash is no longer available, there are more trips to the grocery, gas station, and bread store with corresponding opportunities to experience traffic and road noise.
3. Less guilt over forgotten gifts. Souvenirs, tchotchkes, and knick knacks are things of the past. Small vendors at Shilparaman don’t have credit card readers so family gets fewer gifts for Christmas and we get to blame Modi.
4. Sonam Gupta is reborn. Sonam Gupta, who apparently may not actually exist, was discussed early in 2016 after a series of Indian currency with the hand written phrase, “Sonam Gupta is unfaithful,” went viral—the phrase was written in Hindi. The same phrase on a new 2,000 Indian rupee also went viral, along with discussions of its meaning: “She represents the frustration of every Indian in today’s time.” Sonam Gupta ranked third as most googled person in India in 2016.
5. Greater personal savings. If something can’t be purchased with a credit card, it just can’t be purchased. As a result, there is less spending on luxury items—and also less money going into the economy.
6. Time-saving opportunities. A cash-driven society requires cash, which means trips to the bank or an ATM. No cash means no more time-wasting visits to faceless ATM machines.
7. Points, points, and more points. All these credit card charges add points for future credit card-only purchases. By spending a couple hundred rupees a few days a week you’ll be able to afford that trip to Goa before the next demonetization effort.
8. Improved national health and security. The worlds two oldest professions, spying and prostitution, rely heavily on cash exchanges. Demonetization will slow the spread of sexually transmitted diseases, as well as information.(1)
9. A chance to arrange marriages. The long lines may seem to some an inconvenience, but to others, they are opportunities to arrange for their children’s nuptials. While standing for hours in line to deposit their Modibucks, people make new friends, negotiate dowries, and consult the stars for auspicious wedding dates.(2)
10. Get to relive history. This isn’t the first time the government of India has decided to ignore notes guaranteed by the central government. India made 1,000, 5,000 and 10,000 rupee notes worthless in 1946 and 1978—predictions of success back then were also skeptical.(3)
11. A positive impact on climate change. There are two aspects to this unforeseen benefit of demonetization. First, not all gas stations take credit cards—you can’t drive a car without cash. Fewer vehicles mean less pollution. Second, many people are paid in cash, which is in short supply—people not getting paid don’t need to drive to work. The net loss in traffic is a gain for the environment.
12. An increased sense of euphoria. Most of the plant nurseries are cash-only businesses. Since cash is no longer readily available, people will not be buying plants, which means vendors will stop selling plants, and producers will stop growing plants. Through photosynthesis, plants convert energy, carbon dioxide, water, and minerals into oxygen used by animals—including humans. No cash equals fewer plants, lower oxygen levels, and a pleasant sense of light-headed bliss. In addition, lower oxygen levels are accompanied by decreased concentration, reduction in problem solving skills, potential heart failure, and memory loss—allowing us to forget about demonetization.
As an added bonus, demonetization reinforces the caste system. Although most of the country waits in queues for hours to get a few thousand rupees, those with money and bank connections arrive after the bank closes, shake hands with the manager, and cash checks for ten to twenty thousand rupees per visit. Once again the people who need the most help are left wanting while the elite get more than they need or deserve—leaving the the country’s poor and middle class struggling to pay rent, bills, and groceries from what is left.
Demonetization continues its major negative impact on most of the population of India. People can’t buy groceries, put fuel in their vehicles, or complete renovations—if anyone needs a haircut, my barber is coming over on Saturday rather than lose business due to his inability to pay contractors. Although there is some levity to be gleaned, demonetization is a serious issue. Hopefully the long term results of demonetization will be worth the suffering of the many honest, hard working Indians whom the government seems to be ignoring.
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Unless otherwise noted, I drew or took the photographs in the article—as lame as they may look. Any resemblance to persons living or dead is probably planned. Copyright can be found here for my original work.
- Item number 8 inspired by Akash, Queen of the Damned.
- Item number 9 submitted by Carlos Danger, Future Supreme Deputy Commander of Nanakramguda. He is also credited with coining the term, ‘Modibucks,’ for which we are eternally grateful.
- Item number 10 inspired by Carlos Danger, Future Supreme Deputy Commander of Nanakramguda—his wife, Pequena Danger, is the Future Supreme Commander of Nanakramguda. We expect them to be kind, benevolent leaders with high expectations and a taste for all things Indian.