Was demonetization able to wipe out all the black money for ever?  55% respondents disagreed

demonSummary of the survey carried out by Act Now for Harmony and Democracy (ANHAD) on people’s response to demonetization, published in the book “Demonetization: Exorcising the ‘Demon'” (click HERE):

On the 8th of November 2016, Prime Minister Narendra Modi announced that Rs 500 and Rs 1000 notes would stand demonetised after 12 O’ clock midnight. Petrol pumps were exempted and so within minutes, pumps were thronged and witnessed long queues. There were panic purchasing at shops, especially jewellery and electronics good. ATMs stopped functioning even before the 12 O’ clock deadline.

Next day onward bank branches saw never shortening lines of those who wanted to exchange the currency or draw money in valid notes. At many places across the country violent clashes took place, ATMs were attacked, and employees of bank branches were beaten up. Media reports that new currency, instead of being distributed to those who were standing in queues, was being siphoned off to the rich secretly, and angered people.

To study the effect of demonetization on people, Act Now for Harmony and Democracy (ANHAD) carried out a survey of perceptions, attitudes, opinions and experiences in collaboration with 32 fraternal organisations. A draft questionnaire for conducting interviews was prepared out of the debates that followed declaration of demonetization. The questionnaire contained 18 socio-economic and demographic variables, such as age, gender, religion, caste, occupation, access to media channels, etc. The total number of questions was 96. These included open-ended questions and also statements which were closed-ended.

The survey started in the first week of January 2017 and took about a month and a half to collect data through interviews and filled-in questionnaires. Total number of valid questionnaires used for analysis is 3647. The data on demonetization was collected from 21 states and union territories of the country: Delhi, Andhra Pradesh, Bihar, Chhattisgarh, Haryana, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Nagaland, Odisha, Punjab, Rajasthan, Telangana, Tamil Nadu, Uttar Pradesh, Uttrakhand, West Bengal.

The highest percentage of respondents (about 33 percent) belonged to various colonies of Delhi: Rohini, Sultanpuri and Mangolpuri, in the North-West, Okhla, Badarpur, Shaheen Bagh, Jaitpur from South Delhi, Seelampur and Shahadra from East Delhi, Old Delhi Central and West Delhi. About 21 percent respondents belonged to Maharashtra, which included Jalgaon, Sonari, Fakrabad, Nasik, Nagpur and Akola Districts.

About 7 percent respondents belonged to Patna, Nevada, Sasaram and Araria districts of Bihar, another 6.3 percent were from Faridabad, Hodal, Palwal, Mewat, Kurukshetra regions of Haryana state and NOIDA. Ghaziabad, Jhansi, Badaun, Sultanpur, Azamgarh, Faizabad, Jaunpur and Allahabad districts of Uttar Pradesh constituted 4.5 percent. Other respondents are from Mehboobnagar and Hyderabad in Telangana (5.7 percent), Tonk and Jaipur in Rajasthan (2.2 percent), Bhubneshwar, Cuttack and Jatna in Odisha (2.0 xii percent). Few respondents are from Karera in Madhya Pradesh, Kozikode in Kerala, Mysore and Yadagiri in Karnataka, Solan and Una in Himachal Pradesh and Kanker in Chhattisgarh.

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Profile of Respondents

Average age of the respondents was 29.1 years – 3 percent were up to the age of 15 years; 45 percent from 16 to 25 years; 23 percent 26-35 years; 17 percent 36-45 years and 11 percent above 45 years. The sampled population was predominantly between 16 to 35 years, which is the most productive age. Surveyed population was skewed towards male respondents as about 62 percent respondents were male and about 38 percent female. Only 3.8 percent who responded had not received any formal education; 7 percent left formal education system after 5th standard; 9 percent were 6th, 7th and 8th standard pass; 17 percent received formal education till 9th or 10th standard; 30 percent passed 12th standard; 22 percent had attended college for their bachelor’s degree level (13-15 standard) and about 6 percent had attended post-graduation level education.

About 25 percent of all the respondents were students; 13.7 percent unemployed; 18 percent employed in private sector; 10 percent working as ‘labour’; 4.9 percent reported household work as their profession; 3.4 were in government job and 4.4 percent were involved in agriculture. The percentage of those who reported ‘Hindu’ was 65.0 and ‘Muslims’ were about 27.0 percent – constituting together about 92 percent. There were about 3 percent of Christians and about 2 percent were Sikh. About 3 percent said that they do not follow any religion or said humanity is their religion.

Caste-wise distribution showed that about 37 percent belonged to general category, about 29 percent were SC/ST and 30.7 percent belonged to OBC. As high as 80 percent of the total respondents said they have access to television, 29 percent listen to radio, about 50 percent read newspapers, 17 percent books/magazines and 33 percent had access to Internet as source of information. About 41.5 percent said they are the only earning member in the family while about 58.2 percent said they are not the only earning member in the family.

Almost 77.8 percent of the respondents reported that they have a bank account in their names, while the rest 22.0 percent said that they did not have any bank account. Almost 47.1 percent said that they have either debit or credit card with them; however, only about 53 percent knew how to use a debit/credit card and 47 percent said that they didn’t know how to operate such cards.

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Reactions to & Effects of Demonetization

“What was your first reaction just after the demonetization was announced?” 22.3 percent said that it was ‘bad news’, 29.8 considered it as ‘shocking’, only 15.5 percent took it as ‘ordinary news’. However, one in three of those who responded to the question (i.e. 32.2 percent) received it as ‘good news’.

Demonetization has wiped out all the black money for ever”:  55 percent disagreed and only 26.6 percent agreed, while more than 17 percent did not answer the question. About 35.2 percent of the younger respondents agreed with the statement, as the age of the xiii respondent increased the percentages dropped consistently. At the age 46 to 55 years these were as low as 15.5 percent.  Religion-wise distribution quite clearly showed that almost 50 percent among all four categories refused to accept the claim. Of all, 49.6 percent Hindus, 70.1 percent Muslims, 50 percent Sikhs and 63 percent Christians said that they did not believe that demonetization would eradicate the menace of black money. Similarly, caste-wise distribution also showed that 56.1 percent of ‘General’, 49 percent SC/ST and 60 percent of OBC ticked the option ‘Incorrect’.

Effect on terrorism & infiltration:  Analysis of the data shows that 48.2 percent of the respondents did not believe that it would have any impact on terror attacks. About 25 percent remained noncommittal.  Of all those who responded 45.4 percent said that they do not believe that demonetization has stopped infiltration from Pakistan, and that it continues unabated. 22 percent were non-committal and 32 percent said they think that it has stopped cross-border infiltration.

Why the government shifted the focus to building a cashless society:  About 34 percent thought that creating a cashless society is a right step therefore government is trying to convince people to switch to cashless transactions. About 17 percent believed that the entire exercise of demonetization was done to push the society in that direction.  Age had a strong positive correlation with the opinion that the entire exercise of demonetization was undertaken with the aim of diverting attention from the real issues.

The percentage of those respondents who believed it was merely a diversion increased from 44.1 percent at 16-25 years to 58 percent at 46-55 years. The older respondents were more sceptical compared to the younger ones.  Acceptability of cashless society was more among the young, 37.4 percent of the respondent among the age group 16-25 said that a cashless society is good for the country, however as the age increased percentage of those who agreed with the statement reduced progressively to a low of 24.9 percent at 46-55 years age group.

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Who benefited from cashless transactions?  About 36 percent believed that it would only benefit the corporate, 26 percent said government, about 20 percent said the public or the common man would benefit, rest 18 percent said ‘don’t know’.  Of all the ‘Professionals’ 60 percent said that demonetization has benefitted the corporate sector, 26.7 percent held the opinion that government was the sole beneficiary and only 6.7 percent thought that common citizens were benefitted.  A fairly high percentage of Businessmen (47.7%), Agricultural Workers (46.2%), Government Servants (42.4%), Labourers (40.4%), and Household Workers (46.1%) thought that demonetization has benefitted the corporate sector.  About 20 percent of the Drivers, Rickshaw Pullers and Skilled persons ticked the option Corporate Sector, they in large numbers thought that ‘Government’ was the main beneficiary.

When asked whether ‘farmers, labourers, household workers, rickshaw pullers and vegetable hawkers would be able to manage without cash’, interestingly, the percentage of those who agreed with the statement came down to 23 percent. An overwhelmingly high percentage of the respondents, (68%) thought that it would not work. xiv On being asked whether ‘cashless society would be corruption free’, 47 percent did not believe in the statement. However, 39.3 percent said that a cashless society would be free of corruption.

On being asked whether they witnessed a marriage being postponed due to demonetization, more than 65 percent of the sampled population said ‘yes’. Most families were forced to postpone planned marriages or faced serious hurdles. Even the very seriously sick patients were left unattended because they could not pay in new currency. 83.8 percent of respondents in the Northern Region reported that they witnessed people in serious problems because of demonetization, followed by Delhi (71.8%), Eastern Region (68.7%), Central Region (54.2%), Western Region (52%), and Southern Region (45.8%).

About 50 percent of the respondents knew someone whose job was terminated due to demonetization. The data shows that loss of jobs was particularly high in Delhi, Northern and Eastern regions. When asked whether they saw any politician standing in the queue for changing old notes or for drawing money from ATM, the percentage of those who said ‘yes’ in answer to this question dropped to about 28. More than 65 percent said they did not see any politician or a rich person standing in any bank or ATM queue. About 65 percent felt that the rich did not face any problem due to demonetization.

How much time did people spend in queues to withdraw money?  About 15 percent of the respondents spent 2 hours, about 10 percent reported one hour and an equal number reported three hours. The respondents who spent less than three hours constituted about one third of the sampled population.  About 30 percent of those who were interviewed reported that they had to stand in queues between 4- 8 hours. Rest, about 20 percent, reported that they spent more than 8 hours in the lines.  Shockingly, about 6 percent reported that they had to stand in queues for more than 24 hours. An overwhelming majority of those who supported the move said that it lacked necessary preparations. Majority of the respondents thought that it was an ill-conceived project.

More than 60 percent disagreed with the statement that demonetization did not have any impact on farmers. Only 27 percent agreed with it and 11.5 percent said ‘don’t know’. More than 44 percent were sceptical and did not think that demonetization would lead to betterment of villages, 34 percent thought that it would, and about 21 percent ticked the option ‘don’t know’. Data analysis showed that 30 percent people were happy with demonetization, about 41 percent categorically said that they were angry, 5 percent said they were laughing at the act of demonetization, 9 percent said that they still support demonetization and 14 percent said that people earlier supported the move and now are angry.

Loss of trust in government agencies  51 percent respondents agreed that now citizens would store small denominations, for fear that they might not be able to take out their own money from the bank or ATM suddenly again in the future.  While 47 percent of the respondents agreed that demonetization had resulted in loss of trust in banks, about 50 percent felt that demonetization had resulted in loss of trust in the government.  After demonetization all political parties were exempted from the limits of exchange prescribed for the xv public. This move further angered the public. About 70 percent of the respondents agreed that all political parties should make their accounts public.

Source: “Demonetization: Exorcising the ‘Demon'”. Click HERE to download  

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