Demonetisation: How You Can Help Your Domestic Staff & Marginalised People Badly Affected By The Change

That demonetisation has obviously affected people living on the fringes of society who do not have the access or the financial literacy to know what just happened and how to overcome this chaos, is now well-documented and proven news. Whether it’s the women who hide their hard-earned cash to feed their children or escape abuse, or the millions upon millions of Indians who survive only via the cash economy and do not have ID to open a bank account. However inconvenient this act has been for many of you, few of us can imagine the sheer terror many marginalised people we interact with daily for different needs are experiencing right now. Their hard-earned cash savings are a lifeline for many and considering most are not a not a part of the credit banking system, the queues outside each bank are isolating to say the least.
With articles upon articles talking about the pros and cons of this move, the only thing that’s extremely clear at such an early stage is that the move has proved highly detrimental and even fatal for women. The need of the hour is to help these people who make your lives easier. By helping them exchange their currency, filling their forms, taking them to the bank and explaining the whole situation, each one of us can do something to address the fear and confusion of the marginalized. The least we can do to secure the people who work in our homes as domestic help, drivers, watchmen, daily wage labourers and others who offer their services to us. We spoke to an economic researcher, as well as a deprivation studies professor for advice. Here is what they told us.

An economic researcher from a financial daily has been sharing money with her domestic help with demonetization causing chaos all over the country. Lack of financial literacy about important matters has been most harmful.
According to the economic researcher, women are the most affected by this move. This article by Scroll spoke about how even going to the bank can be a fearful and hostile experience for women. Since most of the women who work as domestic help in homes and unorganized sector, they tend to keep their savings in cash instead of bank accounts. They also often tend to rely on the male members of the family for financial decisions. Many don’t even have ID cards to make an account. Her guidelines on helping them are:

1. See to it that your help has liquidity. Share as much liquid cash you can with them to get them by.
2. Work on a credit basis. Open a credit with your trusted, local or regular grocer for them. Help them buy daily necessities and you can cut it from their salaries next month.
3. You can give them an advance salary since their current salary, if in five hundreds or thousands, is not going to work.
4. In the long run, you can help them open a bank account either with Jan Dhan Yojana Program or PSUs, Gramin Banks or private banks. That is after the whole tide has receded. You can help with providing reference and your KYC details to help them open an account.
5. Since migrant workers don’t have proper documents, you can try to open their accounts with your KYC (Know Your Customer) if it is good enough when the rush dies down.
6. Talk about financial independence when it comes to banking and commerce with them as much as you can.
7. On a long term basis, the government can try to dilute KYCs for vulnerable people who don’t have proper documents or we can give our KYCs as a guarantee.

She said that since most of us have credit and debit cards, we can go to malls and buy essential items. The domestic workers aren’t aware enough to hold cards even if they have accounts. “I have three maids and one of them has a card. She doesn’t use it much and has given it to her husband to withdraw money. We transfer the money into our male drivers account directly but pay these women in cash. Many of them have a small BC collection within their community where all of the women gather their savings and put it in a fund. That fund is given to one of them on a lottery or need basis. I wonder what will happen to that now since these channels are unconventional and unreliable. I think this will wake them up and urge them to create an account. People who made their Jan Dhan Accounts before this are in luck,” she said.
“Private and Public banks have reach and do take workshops or create awareness about schemes but not at a scale that is needed right now. I would like to spend 10 to 20 minutes daily on teaching my domestic help to financially independent not just by earning her money but by depositing and withdrawing it by herself and making decisions by herself. They will be influenced by their employers than bankers explaining it to them. We see a lot of talk on social media but it needs to translate to actual ground work if we are to make any difference,” she said.

Nagaraj Karkada teaches Deprivation studies as an adjunct faculty at Asian College of Journalism. He has been a part of the Madras Institute of Development Studies in the past. He said that this Demonetization is not the complete demonetization but just exchange of currency.
“There have been three demonetisations in the past since Independence. They were carried out properly unlike this rushed and crude way. Rs.1000 currency was also banned as a legal tender in the past but people in possession of it had to explain the source of that note. The man in the streets suffers the most here. A vegetable vendor who has a credit system works on the hundred rupees he makes on the Rs.500 credit. His costing is rotated and if that chain is broken he will have to restart the whole cycle after ten days now. That is a huge loss for someone like him. So many people like him work in the unorganized and informal sector who are a not a part of the cashless economy,” he said.
Short term solutions he could think off on the top of his mind were:

1. One thing you can do is make sure that his livelihood isn’t affected for a few days. You can keep his operation running for a few days on credit basis.
2. You can also stand as guarantee at a pharmacy or a grocer, shopkeeper for these people and make sure they are not turned away because they are not credit worthy like us.
3. Make sure his organized capital earning activity is not shut because of lack of liquid capital. A break of even a few days can become a death trap.
4. Many of them use money in small denominations, make sure you can help them acquire that.

Long term solutions that we can apply are:

1. We need to formalize their sector and organize their economy in the long run
2. We need to raise their minimum wages.
3. We need to make sure they have formalized pay structure and their salaries are wired directly to their bank account just like we have ours.
4. Build better infrastructure and create more banks in rural villages and urban poor settlements.
5. Documenting how they suffer consistently also has an effect.

[caption id=”attachment_64211” align=”aligncenter” width=”800”] Image Courtesy: Rupak De Chowdhuri/Reuters[/caption]
K Nagaraj also added that demonetization has never really solved the black money problem and it has only risen. “Black money is a flow not a stock. The value of cash declines over time as inflation rates always remain positive. Nobody in their right mind would hoard hard cash. Black money will be found in the land, bullion and foreign currency investments. A person would invest in an activity where the value of the money increases over time. The government should curb these activities. Have strict regulation on urban real estate, regulate gold, crack open the Hawala system and bring back black money stashed abroad. Replacing currency is not going to solve anything. When I was in the queue yesterday I did not see any people like Mittal and Ambani, they were middle class and working people. Anybody going gaga over this move is misplaced. This is a very foolish move which affects millions of vulnerable Indians,” he said.
While only time will tell how good or bad this move has been, it’s clear that demonitisation has hit these people the hardest and we can do something about it by educating ourselves and others about basic financial transactions.

Feature Image Courtesy: Avishek Mitra IBNS/ Indiablooms.com