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Holes in the security net

Demonetisation shows India’s social welfare measures like MGNREGS to be worryingly patchy

Written by Anindita Adhikari , Inayat Anaita Sabhikhi |
Updated: February 23, 2017 10:01:36 pm
demonetisation, old notes, note ban, demonetised notes, NGO ActionAid, india news Being denied cash at the bank may not be entirely due to notebandi, but it reflects weak delivery systems, uncertainty and under-resourcing. (File)

Following the announcement of demonetisation, reports of its devastating impact on informal sector workers, farmers and migrants began to pour in from across the country. Seeking evidence on two questions — do social security measures work in the face of such an economic shock, and do these programmes themselves face disruption because of demonetisation — we conducted a survey of approximately 400 individuals, MGNREGS workers and old age pensioners. This was done in the second and third week of January in 15 districts across seven states, with 20 volunteers from these areas.

There are four important findings to our survey. Since notebandi, 57 per cent of people studied were turned away by banks, without their wages or pension. On average, people had been to the bank thrice since notebandi; 30 per cent had made more than three visits. After notebandi, 73 per cent of MGNREGS households and about 52 per cent of pensioners said they had a greater need for these entitlements. On notebandi as a whole, respondents were split halfway, between perceiving it as a good and bad move.

Discussing the number of visits people made to the bank since notebandi, we found that 10 per cent of respondents had not gone to the bank even once, reflecting the non-monetised economy our poorest citizens operate in. As Phulmani Devi, a brick kiln worker from Bero, Jharkhand, said, “Hum daily kamaney aur khaney waaley hain. Humein bank jaane ki zaroorat nahi hai” (we buy food from what we earn each day. We don’t need to visit a bank). Nevertheless, of those who did go to the bank, 30 per cent were able to receive their pension or wages — about 57 per cent were denied them at least once.

On being asked whether the need for these entitlements had increased post-notebandi, 73 per cent of MGNREGS households and about 52 per cent of pensioners said they had a greater need. This is corroborated by official statistics. According to the Ministry of Rural Development’s data, people worked more on MGNREGS than what was planned for in the past three months, while in the comparable time period in the previous year, it was consistently less than planned. This was perhaps possible due to the enhanced allocation via a second supplementary budget of Rs 4,000 crore to the MGNREGS, announced after demonetisation. The ministry released 43 per cent more funds to states over the last three months, compared to the same time period last year.

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Being denied cash at the bank may not be entirely due to notebandi, but it reflects weak delivery systems, uncertainty and under-resourcing. According to official data, 53 per cent of all MGNREGS wage payments were delayed in FY 2016-17 up to January; 60 per cent of these were delayed beyond 30 days. Pension payments, though comparatively better, were also delayed. According to survey respondents in Bihar, for example, it wasn’t unusual for pensioners having to wait upto seven months; this may reflect the greater uncertainty in wage payments, despite statutory requirements of payments to be made within 15 days of working.

Uncertainty and delays translated into high transaction costs; people made multiple trips to the bank to check whether their money had been deposited or not. On average, MGNREGS workers made more visits to the bank than pensioners, reflecting greater uncertainty in wage payments. And 70 per cent of workers who went to the bank returned empty-handed, compared to only 30 per cent of pensioners who were denied their pensions.

Significantly, on being asked whether demonetisation was a good or bad move, responses were split halfway. People viewed demonetisation as a disruptive measure which impacted access to social security. First, it was a push from post office to bank account, then to open multiple bank accounts, including Jan Dhan accounts, then to get an Aadhaar card, an ATM card and so on. Standing in line is routine, with bank trips setting workers back a full day. And there is the mandatory introduction of Aadhaar to access MGNREGS work from the next financial year, which has ridden roughshod over the orders of the Supreme Court and is likely to cause massive exclusion. As Mungo Devi of Torpa, Jharkhand, put it, “Notebandi is the least of our problems.”

The demographic is one that is used to being inconvenienced, if not harassed. Clearly, there is also an acute need to put up with such inconvenience, for even the limited social security available. But did MGNREGS and the National Social Assistance Programme (NSAP) provide social security in times of an economic shock like demonetisation? The answer is yes — and no. Yes, because these programmes have the potential to provide social security. No, because of patchy implementation. On whether the functioning of these programmes was disrupted, the answer would be no. But this does not imply that people who access these programmes weren’t affected by notebandi.

Instead, notebandi is one in a series of disruptions caused by constant tweaking that has instilled weariness amongst the poor. The split in perception perhaps shows the success of political rhetoric and coupled with the weariness of the vulnerable, may also explain the lack of organised resistance. But our survey reaffirms the need for enhanced social security entitlements and strengthening welfare systems, precisely to overcome such ill thought-out shocks like demonetisation. Adhikari is a doctoral student at the Sociology Department at Brown University. Sabhikhi is a fellow with the Tata Institute of Social Sciences and works in Bihar and Jharkhand on social welfare entitlements.

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