Last week the Indian Prime Minister Modi gave 4 hours
notice, late in the evening, that he was demonetizing the most used currency in
the country, 1000 and 500 rupee notes. This meant these notes would be accepted
for 4 more hours, then would be worthless, just paper. Then he closed the banks
for a day and the ATMs for 2 days.
This is a little like having no currency higher than a $5 bill in the
US, but then make it so hardly anyplace anywhere takes credit cards, and most
things cost at least 100 rupees.
Since then, the banks and ATMs have run out of money-there
are not enough 100, 50, 20, or 10 rupee notes in circulation. They say they
keep replenishing the banks and some ATMs, but it's now hard enough to get cash
that police presence is required at banks to keep violence at bay. The
newspaper says 500,000 people have been able to get money from the bank. 500,000 out of a population of 1.3
billion.
India runs largely on a cash economy. Probably 95% of the poor, lower and
lower middle classes’ spending and earning is in cash. For the middle, upper and wealthiest
classes, probably 70% of their spending is in cash, often more. So think about this, and then take away
the cash. The fruit and vegetable
vendors, the street markets, the street food, the small local shops that line
the streets everywhere, they work on cash. If they’re not getting cash from people buying their wares,
how can they spend? It’s a very
hard situation, one that will hurt the poor far more than the wealthy. As a "wealthy" expat, I am OK
because I can shop at the few shops that accept credit cards, including some
expat grocery stores. I have to spend 3-20 times what I would buying from local
vendors with cash, but I can do it.
It’s an option for me.
I currently have 2000 rupees in spendable cash. This is
about $28. So today we'd like to go out, but we don't have a driver on Sundays
so we have to take an Uber or taxi. Cash only. Chris has to go to the airport
to travel today, another Uber or taxi. Cash only. If we go out to the brunch we were invited to, we're
probably are down to 1100 rupees. I feel like I have to make my 2000 last until
we can get money, but I don't think it will. And here is why.
I have a new driver, Sushil. He's young and speaks English
pretty well, and he is lovely. He is kind and so clearly a good person. He is all alone here in Pune. His family lives in his village where
they are sugarcane and wheat farmers.
His two older siblings are married and live far away. If we paid him, we could offer him an
advance. But we don't pay him, he
is paid through the car company. And this week, while he has money in the bank
and had his last paycheck from the Marriott, he had no money for food. He
wanted me to give him food, not money. But I didn't have his kind of food, so
finally he was willing to take 200 rupees on loan for food (he wouldn't take it
if it wasn't a loan). But that won't last him long. So last night we had our
housekeeper, Dinesh, make extra food so we could send food home with him. But I
feel responsible for him, and may have to give him more of my last cash to take
care of him. I need to do this.
Then there is Dinesh. He is our new housekeeper. He is
lovely and married with two kids, one of whom Gracie plays with every day. We
do pay him. And if things don’t clear up soon, we won't have the money to pay
him. Luckily, he's not due to be paid until the first. I need to be sure his
needs are being met.
Then there is Balu, our wonderful caretaker, who lives in a
tiny house (a room) behind our garage.
He has a wife and baby. So
far he has assured me that all the people he buys food from have said,
"You pay me later." But if this takes weeks, will they be able to
keep saying that? And if it continues for weeks, how will we pay him? I need to
be sure his needs are met.
Keep in mind when you read this, that here in India we need
money for clean water. Everyone does. The municiple water, that is available for a couple hours a
day for most people, is not clean.
You cannot drink it without risking serious illness or death. So everyone has to buy water. And most of those places where you get drinking
water take only cash. So no matter
how you look at it, if you have no cash, you have no clean water. Imagine the possibility of 1.3 billion
people struggling to get water to drink.
Yesterday, Sushil waited in line to deposit his check and
get cash from 9 am to 4 pm. And
when he finally got forward in the line, they would not take his check for
cash. So he waited all day to get
money and came away empty handed.
Balu happened to see him in line, and saw his despair. Balu had been able to get 2000 rupees
in cash, also waiting all day, and he gave Sushil 1000. 2000 rupees is about 1/6th
of Balu’s monthly salary-and he happily gave half of it to a man he has known
for 4 days. This is kindness. This is trust. This is what we should all strive
for.
So my US friends, no matter who you voted for, it could be
so much worse. The amazing thing here is we have 1.3 billion people with no
access to money, and, for the most part, kindness is ruling, everywhere.