Making of a mammoth tragedy

More than 90 per cent of India’s workforce still earn their wages in cash. These consist of hundreds of millions of agriculture workers, construction workers and so on. While the number of bank branches in rural areas have nearly doubled since 2001, there are still more than 600 million Indians who live in a town or village with no bank. Cash is the bedrock of the lives of these people. Their daily subsistence depends on their cash being accepted as a medium of valid currency. They save their money in cash which, as it grows, is stored in denominations of Rs.500 and Rs.1,000 notes. To tarnish these as ‘black money’ and throw the lives of these hundreds of millions of poor people in disarray is a mammoth tragedy. The vast majority of Indians earn in cash, transact in cash and save in cash, all legitimately. It is the fundamental duty of a democratically elected government in any sovereign nation to protect the rights and livelihood of its citizens. The recent decision by the Prime Minister is a travesty of this fundamental duty.

confuzzled dude wrote:

More than 90 per cent of India’s workforce still earn their wages in cash. These consist of hundreds of millions of agriculture workers, construction workers and so on. While the number of bank branches in rural areas have nearly doubled since 2001, there are still more than 600 million Indians who live in a town or village with no bank. Cash is the bedrock of the lives of these people. Their daily subsistence depends on their cash being accepted as a medium of valid currency. They save their money in cash which, as it grows, is stored in denominations of Rs.500 and Rs.1,000 notes. To tarnish these as ‘black money’ and throw the lives of these hundreds of millions of poor people in disarray is a mammoth tragedy. The vast majority of Indians earn in cash, transact in cash and save in cash, all legitimately. It is the fundamental duty of a democratically elected government in any sovereign nation to protect the rights and livelihood of its citizens. The recent decision by the Prime Minister is a travesty of this fundamental duty.

http://www.thehindu.com/opinion/lead/Making-of-a-mammoth-tragedy/article16779252.ece?homepage=true

MUMBAI: The mazdoor naka near Bhandup's Madhuban garden was once among the largest in the city, with nearly 500 construction labourers thronging here every morning. Masons, helpers, loaders, tile-polishers would spill onto the roads as early 7.30 am to strike a deal for a days' work with contractors.

Now there is just a trickle of 30 workers here. After demonetisation, job offers at this informal labour market have dried up. The currency crunch has meant contractors have no cash to pay daily-wagers. Incomes have dropped by 80-90% as a result. Mason's helpers who earned Rs 10,000-15,000 a month made just Rs 1000-Rs 2000 in November.

For many this means being down to one meal a day. Or doing without any food for a day or two each week. "From nake ke mazdoor, we have become nake ke bhikari," says Sanjay Kumar who has managed to get just 5 days' work in the three weeks since the note-ban. With a three year-old and five month-old at home, Kumar makes do with one meal a day.

"Should I pay my rent, feed my children or feed myself ?" he asks. Lahu Suradkar whose wife is 3-months pregnant has spent several days without food. "I can only afford to spend Rs 20 a day to buy grains," he says. The langar at two local gurudwaras has become the ticket to survival for many like him.

First, the aim was getting rid of the cancers of corruption, black money and counterfeit currency. Just suffer for fifty days, and the blow that will be delivered to the corrupt will be one they will never recover from, we were told.

Now that we know that most of the black cash that was expected to be ‘extinguished’ is back and does not look very black any more, we are being told that ‘extinguishing’ anything and getting windfall gains was never the idea.

What began as a surgical strike against black money is now a massive Yagna – a passage through fire we must all forcibly go through to learn how to behave in a clean ‘cashless’ society, which is the new normal.

So what will happen to all the 13 lakh crore (and more to come) which has come back into the system? First, a whole new window will have opened up for the taxman, the bank manager and their friend in the RBI and MOF to expand their rent seeking and extortion opportunities to hitherto undreamt of levels. Armed with Big Data and new algorithms, the extortion capacity increases manifold.

We always forget that corruption is directly and causally related to the opportunities that the coercive power of the State provides. More the government, more its policing powers, more the corruption. So whether or not the prime minister advises his taxmen to be soft and considerate, he has, unwittingly or otherwise, opened up opportunities for corruption in the guise of fighting corruption. The corruption of anti-corruption. The ultimate perversity.

Inside the small Jai Ma Ambe Metalworks, owner Omkar Sharma, 60, looks forlornly at the eight, ancient-looking metalworking machines in his primitive workshop. Until last month, his tiny enterprise had 12 workers making bolts and other door fittings for larger hardware makers. Today, most of Mr Sharma’s workers have disappeared along with the work — casualties of New Delhi’s decision to ban the use of 86 per cent of India’s circulating currency.

A month after the overnight ban, many have simply pulled down their shutters, paralysed by their inability to secure raw material, sell their wares or pay workers without cash. “At least 50 factories have closed down because of this,” says Mr Sharma.

Mohan Jain, a broker who supplied steel sheets to small workshops that then turned it into hardware, confirms that trade has collapsed. “The guy who has the material says he will only take new notes. The guy who wants to buy says he only has old notes. No business is happening,” he gripes. Workers, mostly rural migrants, have returned to their villages.

confuzzled dude wrote:

First, the aim was getting rid of the cancers of corruption, black money and counterfeit currency. Just suffer for fifty days, and the blow that will be delivered to the corrupt will be one they will never recover from, we were told.

Now that we know that most of the black cash that was expected to be ‘extinguished’ is back and does not look very black any more, we are being told that ‘extinguishing’ anything and getting windfall gains was never the idea.

What began as a surgical strike against black money is now a massive Yagna – a passage through fire we must all forcibly go through to learn how to behave in a clean ‘cashless’ society, which is the new normal.

So what will happen to all the 13 lakh crore (and more to come) which has come back into the system? First, a whole new window will have opened up for the taxman, the bank manager and their friend in the RBI and MOF to expand their rent seeking and extortion opportunities to hitherto undreamt of levels. Armed with Big Data and new algorithms, the extortion capacity increases manifold.

We always forget that corruption is directly and causally related to the opportunities that the coercive power of the State provides. More the government, more its policing powers, more the corruption. So whether or not the prime minister advises his taxmen to be soft and considerate, he has, unwittingly or otherwise, opened up opportunities for corruption in the guise of fighting corruption. The corruption of anti-corruption. The ultimate perversity.

https://www.thequint.com/currency-ban/2016/12/10/prime-minister-modi-note-ban-yagna-burns-the-poor-not-the-corrupt-rs-500-rs-1000-corruption-demonetisation-currency

confuzzled dude wrote:

Inside the small Jai Ma Ambe Metalworks, owner Omkar Sharma, 60, looks forlornly at the eight, ancient-looking metalworking machines in his primitive workshop. Until last month, his tiny enterprise had 12 workers making bolts and other door fittings for larger hardware makers. Today, most of Mr Sharma’s workers have disappeared along with the work — casualties of New Delhi’s decision to ban the use of 86 per cent of India’s circulating currency.

A month after the overnight ban, many have simply pulled down their shutters, paralysed by their inability to secure raw material, sell their wares or pay workers without cash. “At least 50 factories have closed down because of this,” says Mr Sharma.

Mohan Jain, a broker who supplied steel sheets to small workshops that then turned it into hardware, confirms that trade has collapsed. “The guy who has the material says he will only take new notes. The guy who wants to buy says he only has old notes. No business is happening,” he gripes. Workers, mostly rural migrants, have returned to their villages.

https://www.ft.com/content/02884aaa-bd35-11e6-8b45-b8b81dd5d080

confuzzled dude wrote:

More than 90 per cent of India’s workforce still earn their wages in cash. These consist of hundreds of millions of agriculture workers, construction workers and so on. While the number of bank branches in rural areas have nearly doubled since 2001, there are still more than 600 million Indians who live in a town or village with no bank. Cash is the bedrock of the lives of these people. Their daily subsistence depends on their cash being accepted as a medium of valid currency. They save their money in cash which, as it grows, is stored in denominations of Rs.500 and Rs.1,000 notes. To tarnish these as ‘black money’ and throw the lives of these hundreds of millions of poor people in disarray is a mammoth tragedy. The vast majority of Indians earn in cash, transact in cash and save in cash, all legitimately. It is the fundamental duty of a democratically elected government in any sovereign nation to protect the rights and livelihood of its citizens. The recent decision by the Prime Minister is a travesty of this fundamental duty.

http://www.thehindu.com/opinion/lead/Making-of-a-mammoth-tragedy/article16779252.ece?homepage=true

Merlot Daruwala wrote:

confuzzled dude wrote:

Inside the small Jai Ma Ambe Metalworks, owner Omkar Sharma, 60, looks forlornly at the eight, ancient-looking metalworking machines in his primitive workshop. Until last month, his tiny enterprise had 12 workers making bolts and other door fittings for larger hardware makers. Today, most of Mr Sharma’s workers have disappeared along with the work — casualties of New Delhi’s decision to ban the use of 86 per cent of India’s circulating currency.

A month after the overnight ban, many have simply pulled down their shutters, paralysed by their inability to secure raw material, sell their wares or pay workers without cash. “At least 50 factories have closed down because of this,” says Mr Sharma.

Mohan Jain, a broker who supplied steel sheets to small workshops that then turned it into hardware, confirms that trade has collapsed. “The guy who has the material says he will only take new notes. The guy who wants to buy says he only has old notes. No business is happening,” he gripes. Workers, mostly rural migrants, have returned to their villages.

https://www.ft.com/content/02884aaa-bd35-11e6-8b45-b8b81dd5d080

All these guys insisted on doing business in cash all this while just to evade paying taxes. Nothing stops them from making payments online or with checks (although there are many businesses are founded on tax and regulatory arbitrage, which just won't be viable now). So no sympathy for their whining.

I was very disappointed by my favorite restaurant, Cafe Mysore, in Matunga. They have put up a black board defiantly declaring they only accept cash (new notes) and won't entertain cards or PayTM or any other mode of digital payment. Just because they know that their loyal clientele will keep coming and spending, they want to continue with their old tax evading ways.

I wish I could say I will never patronize them after this. But alas, my palate rules over my moral outrage.

garam_kuta wrote:

Merlot Daruwala wrote:

confuzzled dude wrote:

Inside the small Jai Ma Ambe Metalworks, owner Omkar Sharma, 60, looks forlornly at the eight, ancient-looking metalworking machines in his primitive workshop. Until last month, his tiny enterprise had 12 workers making bolts and other door fittings for larger hardware makers. Today, most of Mr Sharma’s workers have disappeared along with the work — casualties of New Delhi’s decision to ban the use of 86 per cent of India’s circulating currency.

A month after the overnight ban, many have simply pulled down their shutters, paralysed by their inability to secure raw material, sell their wares or pay workers without cash. “At least 50 factories have closed down because of this,” says Mr Sharma.

Mohan Jain, a broker who supplied steel sheets to small workshops that then turned it into hardware, confirms that trade has collapsed. “The guy who has the material says he will only take new notes. The guy who wants to buy says he only has old notes. No business is happening,” he gripes. Workers, mostly rural migrants, have returned to their villages.

https://www.ft.com/content/02884aaa-bd35-11e6-8b45-b8b81dd5d080

All these guys insisted on doing business in cash all this while just to evade paying taxes. Nothing stops them from making payments online or with checks (although there are many businesses are founded on tax and regulatory arbitrage, which just won't be viable now). So no sympathy for their whining.

I was very disappointed by my favorite restaurant, Cafe Mysore, in Matunga. They have put up a black board defiantly declaring they only accept cash (new notes) and won't entertain cards or PayTM or any other mode of digital payment. Just because they know that their loyal clientele will keep coming and spending, they want to continue with their old tax evading ways.

I wish I could say I will never patronize them after this. But alas, my palate rules over my moral outrage.

hahaha..thamashikelidhrEnu, neevu mAduvadhu holledhE, mAraiya...yAkEndre, avaru kalasadhavurughe samblAna, bari cAshalli mAthra koduthAyidArO EnO.. and this may just be their way of expressing their protest. yArugothu?

Merlot Daruwala wrote:

garam_kuta wrote:

Merlot Daruwala wrote:

confuzzled dude wrote:

Inside the small Jai Ma Ambe Metalworks, owner Omkar Sharma, 60, looks forlornly at the eight, ancient-looking metalworking machines in his primitive workshop. Until last month, his tiny enterprise had 12 workers making bolts and other door fittings for larger hardware makers. Today, most of Mr Sharma’s workers have disappeared along with the work — casualties of New Delhi’s decision to ban the use of 86 per cent of India’s circulating currency.

A month after the overnight ban, many have simply pulled down their shutters, paralysed by their inability to secure raw material, sell their wares or pay workers without cash. “At least 50 factories have closed down because of this,” says Mr Sharma.

Mohan Jain, a broker who supplied steel sheets to small workshops that then turned it into hardware, confirms that trade has collapsed. “The guy who has the material says he will only take new notes. The guy who wants to buy says he only has old notes. No business is happening,” he gripes. Workers, mostly rural migrants, have returned to their villages.

https://www.ft.com/content/02884aaa-bd35-11e6-8b45-b8b81dd5d080

All these guys insisted on doing business in cash all this while just to evade paying taxes. Nothing stops them from making payments online or with checks (although there are many businesses are founded on tax and regulatory arbitrage, which just won't be viable now). So no sympathy for their whining.

I was very disappointed by my favorite restaurant, Cafe Mysore, in Matunga. They have put up a black board defiantly declaring they only accept cash (new notes) and won't entertain cards or PayTM or any other mode of digital payment. Just because they know that their loyal clientele will keep coming and spending, they want to continue with their old tax evading ways.

I wish I could say I will never patronize them after this. But alas, my palate rules over my moral outrage.

hahaha..thamashikelidhrEnu, neevu mAduvadhu holledhE, mAraiya...yAkEndre, avaru kalasadhavurughe samblAna, bari cAshalli mAthra koduthAyidArO EnO.. and this may just be their way of expressing their protest. yArugothu?

Naansense! The servers have been around for years and years and all have bank accounts from where they remit their savings to families back home in villages around Mangalore. So nothing stops Cafe Mysore and their sorts from switching over from cash-based transactions. They just want to avoid paying due taxes for as long as they can.

Maria S wrote:From all that I have heard from family and friends in Chennai, especially in the aftermath of Cyclone Varadha indicates that the hardships have really worsened *(if possible)..with damages to homes, power outages, banks and ATMs closed..swipe machines not working etc.

Am quite concerned about them...also the uncertainties ahead.

Maria S wrote:Sure Garam.

OPS seems so relaxed, and not into competitive politics. He does not seem to care that Chinnamma will take over (if she has not already). Who knows what deals are made! Strange to see Sasikala being elevated to the stature of Jayalalitha so soon, by many of her supporters. 

May be it's the fast times we live in, everything moves so quickly..people move on quickly too..everything seems..surreal.

Merlot Daruwala wrote:
Naansense! The servers have been around for years and years and all have bank accounts from where they remit their savings to families back home in villages around Mangalore. So nothing stops Cafe Mysore and their sorts from switching over from cash-based transactions. They just want to avoid paying due taxes for as long as they can.

confuzzled dude wrote:

Merlot Daruwala wrote:
Naansense! The servers have been around for years and years and all have bank accounts from where they remit their savings to families back home in villages around Mangalore. So nothing stops Cafe Mysore and their sorts from switching over from cash-based transactions. They just want to avoid paying due taxes for as long as they can.

But there are many folks that suffered, for example, domestic workers they can't afford the luxury of standing in long lines for hours and hours. Some of them were paid in old currency and ended up going through brokers to exchange for new bills, ended up paying them 20% commission.