We are now back in Washington after a three-week trip to India. I was visiting after two years; my wife was there for the first time. As an non-resident Indian with strong roots in India, I followed the demonetisation developments closely, but what we faced during our travels shows the disconnect between government rhetoric and reality.
Leaving the U.S., we were nervous about not having Indian currency notes. It was perhaps the first time that I felt that the mighty dollar may not be worth much, in reality. Even though the exchange rate was close to a historic high of Rs.68 to a dollar, there were warning signs that it wouldn’t translate into real conversion rates anywhere close to this. We tried to change money in the U.S. and were promptly told it wasn’t possible.
During our short stay in Doha we tried the same. Trips to money exchanges were fruitless, and one of the cashiers actually laughed me off, saying I should read the newspapers.
On landing in the New Delhi airport we were told we could both get Rs.4,000 each. The sign that had this amount written on was badly deformed, with three or four scratch marks with Rs.5,000 written over it; with a final ‘4’ replacing the ‘5’, showing just how many times the rules had changed, over a short period of time. The Reserve Bank of India gave a record number of directives to banks starting November 8, I was informed.
In Agra we heard sad stories from tour operators, who claimed that tourism had been decimated. We read of tourists doing menial jobs and dancing and singing in certain parts of India, just to pay their bills. While we didn’t have to do any of this, we could sense the tension in the air. The stash of rupee notes in my wallet reassured me much more than the smaller stash of dollars I had alongside it. The country seemed to be on edge, with front-page reports of people in queues, and someone having a heart attack.
Jugaad at work
I was witnessing the ‘jugaad’ mentality at play all over again, with autorickshaw drivers and even vegetable vendors resorting to cashless means of payment. But what about those who can’t afford a phone, I often kept asking myself. How can Prime Minister Narendra Modi assume that everyone will have a bank account, much less a smartphone? Isn’t this bourgeois middle-class thinking, to assume that the whole country will leap-frog to online and digital banking, without even having basic banking infrastructure, such as bank accounts?
Nothing illustrates the situation better than our experience at a popular café in Bangalore, my hometown. One evening after coffee and snacks, when I paid the Rs.650 bill with a Rs.2,000 note, the cashier replied he didn’t have change. “I need change, sir” he said.
I opened my wallet before him and told him that I didn’t have any change and that it was his duty, or responsibility, to make sure they had change, given it was a business establishment. This didn’t fly well, and we went back and forth for a while. Ultimately we agreed amicably that I would come pick up the change the following day — after he wrote the balance amount on my bill.
As with most things in India, it boiled down to having a ‘well-connected’ friend, who sent us enough money to manage. This experience demonstrated to me once again that even though a democracy, India operates by rules that are often unwritten. The ones who suffered the most were those who were outside the system and had no way of ‘getting in’. The real pain was felt by those who earn their living in cash, have no bank accounts and are in fact ‘invisible’ in India’s economy.
khanpgg@vt.edu
