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Every action has an equal and opposite reaction. We saw this in action last year when the “masterstroke” of demonetisation announced by the Government of India on 8 Nov 2016 left India in shock. Journalists, academicians and industry experts, reacted with a flurry of writing taking diverse stands. A google search on ‘demonetisation India’ yields over a million results! These reactions ranged from open support, complete disdain, reportage on the misery citizens were facing, advice on how it could have been done better to optimistic pieces about how this could leverage long-standing change towards digitization, formalization and efficiency.
Over time, though, commentary on notebandi has become an entry point to discuss a large variety of problems and issues related with India’s economy. It is a testimony to how profound the impact of demonetization has been on Indian consciousness that months after it happened, we are still passionately analyzing it. Commentators are still writing about it, often continuing to use their analysis and arguments to support the exercise or reiterate its failure. Some, like Swaraj Editor R Jagannath have even dramatically changed their opinions, making for some unexpected media drama.
Others have used demonetisation as an entry point to delve deeper into questions that were already part of their frame of enquiry. At the Centre for Policy Research, for instance, we revisited old field sites across Delhi to understand how informal sector workers were coping . Qualitative research that sought to understand how informal sector workers coped with the absence of cash revealed to us linkages that were less obvious before. For instance, the impact of the supply chain on the livelihood of a small time grocer, was not something we had foregrounded in our studies on work and labour before. Neither had we dwelt on the strategy of migrant workers to switch from one type of work to another in order to survive in the city. [Hear our podcast and read op-eds on cash dependence and migration]. The results of a post-demonetisation survey of slum households in Mumbai published in January 2018 by Deepa Krishan and Stephan Seigel revealed a drop in income and consumption, yet showed overall support of the policy. This enquiry also appears to take forward the long-term interests of the authors in urban poverty and social issues in one case, and private savings and investments for the other.
To me, demonetisation has been useful to galvanize debate on three key interlinked issues, which I attempt to list here:
Invisibility of the informal economy: Beyond the immediate alarm bells that went out regarding the disproportionate distress the note ban caused to the informal economy basis anecdotal and prima facie evidence, the government’s report of 7% GDP growth over Nov-Dec 2016 and unchanged GDP forecasts rekindled debated about how the informal economy is measured by the Central Statistical Office while estimating the GDP of the country. This debate was particularly vibrant because the CSO had changed GDP estimation methods in 2015; ostensibly the new methods are better equipped to capture the informal economy. In retrospect it seems that the data machinery is simply not equipped to cater for a sever economic shock like demonetisation. As Kumar and Verma point out in their recent EPW piece on remonetisation:
“The impact on the unorganised sector does not show in the official data on the growth rate of the economy. This is because the methodology used by the government’s statistical organisation to measure the contribution of the unorganised sector to gross domestic product (GDP) is not valid when a big shock, like, demonetisation, is delivered to the economy. Hence government pronouncements on the economy’s rate of growth do not capture its true decline.
In brief, the unorganised sector of the economy employing 93% of the workforce remains hidden behind a veil by the GDP data and the monetary data. This can only be uncovered by alternative calculations. This is not just an economic matter but also a political and social one (emphases mine).”
Beyond the urgent need for “alternative calculations”, I would day there is also a need to understand deeply the linkages between the formal and informal economy. We should understand if informality is a choice at all and what forms of formalization, if at all, will benefit the majority of Indians. These are tough questions and will demand intricate answers.
The role of cash in the economy: Post demonetisation commentary yielded a rich discussion on the importance of eliminating cash and the benefits of digital payment systems, from tax collection and speedier transactions to hitting terrorism and other illegal networks. The cash ban was seen by some commentators as part of a global offensive against cash. Indeed, the note ban did boost the idea of digital transactions and sent fintech companies into a tizzy, though a spike in the actual figures is debatable. On the other hand, bank data also showed that cash was being withdrawn upto pre-demonetisation levels as early as March 2017. All in all, this transition will need a more sustained effort hinging on improved connectivity infrastructure, improved security and much more awareness.
It will also need a curious approach to implementing taxation rules. Many of those in the informal economy are insecure after notebandi. Landlords and small-time entrepreneurs in urban villages that we have interviewed recently, for instance, have brought up notebandi in nearly every conversation, with no instigation from our researchers. The context has almost always been a sense that the government is looking more closely at defaulters. People seem to feel that they need to comply with the system, own PAN numbers and file tax returns, for the government to leave them alone. Whether they intend to do this to truly fall in line or to do the bare minimum and find innovative ways to scout the rules is another matter!
We have to acknowledge that cash transactions and informality are deeply ingrained; unless digital is significantly cheaper and hassle-free it will likely be slow to take off. More importantly, the fuzziness around informality and the reading that informal is likely also illegal needs to be deeply understood. Scholars have written extensively about how, in practice, the rule of law in India is riddled with exceptions. Demonetisation and the subsequent efforts towards formalisation could be a unique opportunity to study how the average Indian’s perception and practice of the rule of law is changing at this time.
The jobs debate: The role of the cash crunch following notebandi has been a recurrent theme in the reportage and analysis on the recent farmer protests in Madhya Pradesh and Maharashtra. However, the real problem of agriculture is that too many people depend on it (R Jagannath calls it the farm crisis a jobs crisis in disguise) . There simply aren’t enough decent non-farm jobs going around! Demonetisation has opened the Pandora’s box on the jobs crisis. Of course, this has been an anti-Modi political scoring point by many, but the failure to create jobs for India’s has been an enduring problem that needs both immediate and long-term solutions.
The answers lie in busting a few myths around urbanisation, migration and urban-rural links, perhaps too many to list here. But I will try to encapsulate my thoughts on this. One, the majority of job seekers criss-cross between rural and urban locations in pursuit of work; a migrant-friendly view of urban development would help match jobs, skills and labour while leveraging improved connectivity to develop rural production centres is an important strategy too. The role of small towns is key in this. Two, and following from the above, rural and urban are not distinct spaces in the Indian geography. In reality, the boundaries are blurred. Dense villages and sparsely populated cities, megapolises and remote rural settings all have their place. So a place-based and spatial approach to planning for jobs—and related infrastructure, skill development, housing and amenities—is absolutely key.
Seeking opinions on parenting a teen….
A parent never does really know right from wrong. We think we do, but in my experience a lot of it is guesswork. There appear to be some broad rules and the rest is a matter of instinct. Most times, we draw from our own memories of what we remember from our childhoods. But neither does memory always serve us well, nor are circumstances always comparable.
What we do remember though, is a code of ethics, the rights and wrongs, the general patterns of our childhoods. Who set these patterns? Our parents, other elders in the family, our peers, our living environment- many elements went into that mix. For some of us, these rules were clear despite their complexities. For others, they changed with frightening regularity, which meant we never really knew whether we were breaking them, we never really knew when we might be in trouble.
Sometimes, when we…
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As a mom-investor, I am trying out something new to discover my children’s interests. Would you be open to this?
There is no doubt that we parents are deeply invested (arguably, over-invested!) in our children. The quality and extent of this investment is a constant subject for debate and introspection among parents across the world. In a changing India, where economic liberalization has meant new experiences in technology, lifestyles, aspirations and opportunities for a burgeoning middle class, parents are facing new challenges.
Right from the outset of our parenting journey, Indian parents grapple with a clash of tradition and modernity. We ask basic questions about child bearing and rearing- nappies or diapers, when do we potty train, alopathy or home remedies…you get the picture. As our children grow, we struggle to keep the balance between using parental authority and encouraging independent thought. We feel frustrated when the methods our parents used with us fail to engage our children. We worry about safety, education quality and how to nurture talent and…
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Introducing my all-new parenting blog!!
Much of the post below was written 5 years ago when I set up this blog, but for reasons unknown I never actually got going. Here I am now, reposting in the hope that I will reguarly contribute to the very important conversation around parenting.
Isn’t it already overcrowded, the parenting space? I tried several different names just to get this one for my blog! I have wanted to write about my experiences as a parent for a long time now. So many discussions with friends on other seemingly unrelated issues turn to parenting all of a sudden. I have realized, after a long struggle, that my parenting side has now got infused into everything else that I do. That instead of going to work, or going shopping and coming back to my kids, I actually look at work, chores, friends and indeed everything in life from the lens of…
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Another city in Ecuador, quite different from Quito. Nestled in a wide valley and not that high altitude-wise, this is a laid back city and a haven for retired expats. That means many more people speak English and it’s rather small, so it’s much easier to get around. We landed here early in the morning and ended up wandering the city for hours waiting for check in time. More on those wonderful and crazy wanderings later.
After check in and a much needed afternoon nap (call it stone-dead slumber!), we walked to the city centre. Breathtakingly beautiful and full of unexpected sights, Cuenca has stolen my heart in a way that few places have. In addition to the gorgeous churches and squares, endless colonial facades and graffiti, there’s an earthy reality to the city and a sense of pride that is very endearing.
Here are my shots from our walk around town tonight. Consider them placeholders till I get time to blog in detail about what we are seeing and doing. Much love from Cuenca, Ecuador…..
A journey from Delhi to Jakarta. What’s so special about that? Two flights, some time to kill at Changi. Ho hum….
I’m not one to think like this before a journey starts. I’m always super excited about travel but some journeys are made special by the people you meet and the conversations you have. This one certainly was. Trying to sum them the best I can….
Conversation #1 : book buying advice from a stranger
When someone stands next to you at WH Smith and proclaims that a particular title is ‘the best book in the world’, it’s hard not to pull his leg right? “The best book in the world?” I challenge him. “For now…” says he, with a twinkle in his eye. He is recommending to me Zorba the Greek by Nikos Kazantzakis and I’m skeptical as hell. It sounds very pseudo self-improvement to me, a genre I detest but he protests vehemently, saying it’s just the opposite. At this point we are joined by a 50-something Indian woman who announces her absolute dismay that the book section of the store has been slashed by half. “Change your name!” she cries, waving her hands about at the shop attendants, who launch into a long babble by way of explanations. As I bill and leave, I hear hip Aunty offer free book advice to the free book advice giver!
Conversation #2 : dreams never die
Looking for a place to drink my coffee, I end up sharing a table with X. I have no intention of chatting but his gentle face and curious smile draws me in and I venture to ask about where he is from and where he is going. Over the next half hour, I hear a story of innovation, ambition, pride and disappointment that moves me. X is from Sydney, Australia. After winning a food innovation award for odourless garlic in 1990, he embarks on a journey of entrepreneurship, manufacturing and selling cosmetic and food products made from garlic, which he believes has medicinal properties especially in regulating respiratory conditions like asthma among other diseases. From what I gather, the business environment changed and one way or the other he ended up losing his business. Now, in the end years of his working life, he is trying to revive his business and traveling to explore partnerships in manufacturing technology, marketing and distribution. He is thinking of new markets and is fascinated to hear about the popularity of Ayurvedic and natural cosmetics and food in india. X is well read and reasonably well travelled but old world, still hoping to sell his ideas basis a spiral bound documentation of his past success.
We talk about brain drain and economic policy, jobs and aspirations, the world order. I’m struck by his optimism and how his eyes light up when I ask if he has a sample of his product! He pulls out a small box of cream and I rub some on my arm. It’s anti ageing and full of garlic, all natural and aromatic too. He glows with pride as he sees how pleasantly surprised I am. “You gotta have a dream” he says “to do something for your country”. Clearly it’s not profit but something larger that drives him. And the fact that his beautiful wife and daughter have used his products for years is endorsement enough! His parting shot to me: “it was lovely to meet someone who thinks and cares”!
Conversation #3 : fearless parenting
The guy sitting next to me asks to borrow some part of my gigantic copy of The Strait Times and I comply. We start talking. Careers, business, the state of Indian roads, politics…staple conversation for two educated urban Indians meeting on a plane. We even speak about cultural aspects of doing business in south east Asia and I hear him eagerly, soaking in information that might help the project we are starting in Indonesia. And then I ask him about his family. It’s a different guy talking now. A father with a five year old son and a two month old daughter. And we talk about how it’s fear and paranoia that drives modern parenting. To my utter surprise, he agrees with me about how we need to change that and give our kids the chance to find their own survival mechanisms. We argue as well. He loves the tech solutions- get the kid a phone and data card and google maps will be the solution! I argue for a belief system that trusts people, even strangers. It is a delightful and intelligent conversation that I enjoy.
I end the long day with another long conversation with my dear friend and project partner Greg. This one meanders all over the place like it does with us but hovers somewhere around the themes we work on nevertheless. We can’t be blamed for losing focus! I go to bed and wake up a few times at night, excited for dawn. And here it is….
We live in a deeply divided world. Significant shifts in global economics and geopolitics have meant that countries are desperate for economic growth and increasingly intolerant of any events that derail them from achieving their targets. In this milieu, migrants have been caught in the crossfire. No one seems to want them, but what’s more, the unwillingness to include migrants has severe repercussions on how nations are planning, managing and financing their cities.
What is inclusion? Attitudes towards internal migrants shift, very very gradually
At Prepcom3 in Surabaya, Indonesia in the last week of July, I was disappointed to see India join the European nations and the United States to object to the inclusion of the Right to the City framework in the New Urban Agenda, which will be further negotiated by United Nations member states in New York a few days from now. Allegedly (see Indian Express report), while Europe’s concerns stems from the migrant crisis and the US is loath to recognize immigrant rights, India is also worried about the repercussions of taking on the responsibility to provide social justice to all, extending the already thin benefits of State welfare and largess to those who might not be legally recognized citizens.
This is the heart of the problem. In a policy environment in which the word ‘inclusive’ is bandied about rather casually, the meaning of inclusion bears repeated and deep exploration. Gautam Bhan put a spotlight on this issue of citizenship recently with reference to the Delhi Jal Board’s historic decision to provide universal access to water.
Who does India consider illegal and what are the various kinds of non-citizenship that people experience has been a subject of much study. Internal migrants, despite a Constitutional right to mobility anywhere within India, have been described as ‘illegal’, ‘encroachers’ and ‘polluters’ in numerous policy documents and court judgements. Even where policy has recognized their economic contribution, migrants have been steadily excluded – or inadequately considered – from provision of basic services (like water, sanitation), housing (negligible supply of affordable housing, no focus on incremental housing), transportation services (low priority to affordable public transport including NMT), health, education, subsidized food (no access to PDS at destination) and even conditions for livelihood (harassment of street vendors, regulations that prevent home-based work).
The good news is that this seems to be changing. We can see now the very humble beginnings of a new mindset that sees migration less as an intrusion and more as an inevitable consequence of economic transition (and climate change). Parliamentarians have been debating migration in a more healthy manner and that has resulted in the creation of a Working Group on Migration particularly to assess linkages with housing, infrastructure and livelihood. I understand the debates within this group comprising several ministries and government department, academics and industry representatives have been encouraging.
Inclusive housing takes heartening steps forward
Besides changes like the Delhi government’s inclusive stand on water, there is much progress in the field of housing as well. At a consultation co-organized by the Ministry of Housing and Urban Poverty Alleviation (MoHUPA) along with Magic Bricks and GIZ this past week, I was pleasantly surprised to see not only more supply of lower income group (LIG) and economically weaker section (EWS) housing by state governments (representatives from Rajasthan, Maharashtra, Gujarat and Tamil Nadu spoke), but also much movement on progressive housing policy.
This morning’s interview of Mr Sriram Kalyanaraman, MD and CEO of National Housing Bank, who also spoke at the event, offers much hope. We see the confluence of the government’s flagship housing scheme Pradhan Mantri Awas Yojna (PMAY) and technology solutions (e-gov, m-gov, intergated MIS) that work to educate housing buyers and link them with accessible bank branches. The uptake of low ticket size home loans is especially encouraging. Kalyanaraman reports that home loans for under Rs 10 lakh comprised a whopping 30 percent of the total in FY 16! I have a personal sense of victory in this regard, having been involved with organizations like mHS City Lab that persevered long and hard with the government and finance sector to push changes that allowed banks to devise means to underwrite loans to informal sector workers. A huge change indeed that will have rippling effects going forward.
MoHUPA’s support of rental housing and attempts to bring in some policy reforms to encourage it are also heartening. Particularly brave are its efforts to understand the informal rental market, for any discussion that talks about the middle ground between the formal and informal pushes us towards a deeper understanding of how human beings survive, negotiate realities and experience the world; the exercise reveals the limits of defining people through their economic functions and shifts the focus on aspects of human dignity, safety and livability. Even more, it shows us that our understanding of their economic realities is also deeply flawed at present. These discussions are critical if we are to move towards long-term inclusive growth.
The contradictions must remain on the table, in plain view
And so, even as we celebrate the early wins, we need to highlight the contradictions in our approach. For example, those in the field know that any discussion on subsidized housing inevitably leads to the question of tenure and title. This consultation was no different. One cannot logically argue with the traditional defense of no-sale and no-lease clauses stipulated for a period of time (5, 10, even 15 years). This defense rests on the logic that people have no right to profit from something the government has subsidized entirely or partially. But if we happen to be in that moment when we are looking at market realities and the reality is that mobility of labour is a defining feature of India’s (rather painful) structural transformation, isn’t it a tad discriminating that we continue to devise schemes that tie the poor down to a specific location, disallowing them full tenure and denying them rights to sell or rent their properties? Is there no way around this? Could rent-to-own schemes be a solution so that the poor pay their way to ownership if they want to? Could private sector rentals that are currently in the informal domain be legitimized and even supported by mutually developing frameworks that ensure minimum quality standards and provide mechanisms to redress grievances?
Any number of questions come to mind, but if the government were to truly engage, solutions are also just as many. Beginnings have been made and now its a question of innovation, experimentation and perseverance.
I look at my son running around the office. He giggles and laughs and takes forty rounds around the printer console. Plays with the calculator, block sections, paint catalogues. And I wonder why must I choose. The thought came from another article which a working mother friend forwarded to me about being a working mother. […]
Nothing like books to bring alive people and places! A lovely post indeed
I have watched with fascination the obsession that revolved around the Harry Potter series. I remember the pictures of the lines outside stores for the release of each new book and my sister-in-law using all her contacts to get a pre-release copy sneaked out for my niece. These compelling, addictive series seem to be the fashion of the day, especially for young and young adult fiction. I watch my own grandson, addicted to various mythology based series – Maybe at that age I too went through the rage of the time – various Enid Blyton series, Bily Bunter and a great favorite, the William books.
Even for a fairly rapid and compulsive reader, I have not been obsessive about a series or a fictional character for a very long time. The first Henning Mankell book I read was Daniel which I picked up one of my increasingly infrequent visits to…
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2nd part of the sci fi fantasy series
OoGoOg was running round and round the thing blocking his escape. There seemed to be a massive place outside. “There must be a way outside, it seems that we are trapped over here,” OoGoOg thought. “I might have to break the barrier to get out of this place to escape my clan and hopefully find another one. I have to make something which is sharp, sharper than most things we find in our food from the gods (also contains other items). Hmmmmmm……..”. OoGoOg was in deep thought.
Mr. Menidzher was elated when he read the text message of Dr. Hiburgerihatu. He started speed-walking to test lab #1 where he saw Dr. Hiburgerihatu observing one of the specimens assuming it was the human. Dr. Menidzher said, “So, you have finally succeeded Dr. Hiburgerihatu after 3 tests and a year”. “Yes, but the human may not survive, he is being hunted by…
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