 You are watching News Made Easy, I am Anand Dev Chakravarty. Today I am going to talk about demonetization but I am going to look at it from a different angle. We all know about the economic disaster that demonetization unleashed. Economic slowdown, large scale unemployment and all that talk about black money etc. None of that happened because cash today is more than what it was in 2016 when demonetization took place. At that time it was 12% of our GDP, today it's 14% of our GDP. This is despite the growth in digitization, mind you, so cash held by public is back to where it is. And we know that how first demonetization and then GST completely derailed India's economy. But the mystery is that a policy decision, a sudden policy decision like that which affected so many people badly. How did that lead to the BJP gaining politically, electorally in many parts of India, especially Uttar Pradesh which had assembly elections within a few months of the event itself. And the reason for that is the large scale inequality in India. And if one looks at the data that is available from 2017, one of them that we have is the NAFIS, the survey of financial inclusion that is mostly for rural India. And we also have the PLFS or the labour force surveys that take place. We have data for that for 2017-18 as well. So these give us a certain sense about the level of income of a large number of people. And one of the things that we see that 70% of rural Indian families, rural Indian families in India earn less than 833 rupees per day, per month. And what does that mean? That means that if they actually went out and got about let's say 20 days of work, even then there is very little chance that they had seen a 500 or 1000 rupee note. And the lower down we go down that scale, I mean 20% of rural Indians earned families, not just Indian individuals, remember family of five people earned just 2500 rupees a month. There is no chance that they had seen a 500 rupee note at all. So a large chunk of rural Indians had no, every day interaction with 500 and 1000 rupee note. So that gives us a very clear idea as to why these people were not affected by demonetization. You might say alright but there are businesses that they deal with. They have their employers, their employers were affected by the sudden disappearance of 500 and 1000 rupee notes. And what happened to them? If the employers were affected they were not going to give jobs to these poorest of poor people. And ultimately they would be affected. What one could call the trickle down effect of demonetization. That would have happened. Well another piece of data should be interesting here which is that about 52% of Indian workers at that time were self-employed in 2017-18. And this is all government data. This is not data which is private data, not surveys, private surveys, this is government data. 52.2% were self-employed. Out of that about 4% were people who employed others. So you can imagine effectively 50% of people who had a job or work in India who were employed were own account workers. Own account workers means that they did not employ anyone. Maybe their family but no outsider. They earned their own living. And most of these people that I told you a large number would be in agriculture some in various trades. People who come to your house to fix your bulb or your fan or your tap that's leaking. These are all own account workers. Many of them were earning. And I'm not taking casual workers at all here. They were earning less than the daily wages, the daily earnings. And remember they earned daily was definitely less than 500 rupees. And therefore there was very little chance of these people actually seeing 500 rupee note ever. Because it's very unlikely that they were being paid in cash for more than a day. Similarly casual workers, a large chunk of Indians are casual daily wages who don't know whether they're going to have a job the next day. Many of them only get work maybe 10-15 days a month. On an average their wages in 2017 wouldn't have crossed 250-300 rupees. So again every day they were being paid in 100 rupee notes, 50 rupee notes, 10 rupee notes. So even though 86% of the value of currency that was circulating in India was just those 500,000 rupee notes 50-60% of Indians were not affected by that 86% of the economy. They were operating in the remaining 14%. That is the reality of India and for them, remember many people say for the poor demonization came as a moment of shard and fraud which means that they were affected, they were badly hit but they felt better that the rich were affected even more. So they were willing to take these losses because they thought the rich were losing even more. But that is not the case here. These people were simply not affected. A large chunk of Indians, even if you reduce everything, take a conservative estimate that would be 30% of Indians poorest people, India's poorest people who were simply not affected by the disappearance of 500,000 rupee notes. It made no difference to them. And for them, the Modi government appeared as a government which was in their favor just like Indira Gandhi in early 1970s. When she nationalized things and put an end to privy purses that's when the poor thought this is our person and you know what happened with that. And similarly, this particular move made exactly that impact and that is why in the UP elections and mind you in UP this 30% is going to be much, much larger probably double because there are many more poor people in UP. And that is why Uma Bharti in an election rally in February 2017 right before the elections in Babina, she had said effectively that you know Marx and Lenin brought about the biggest, most effective social revolution economic revolution in the world and Narendra Modi, Prime Minister Narendra Modi has done the same thing by through demonetization and that was bloody, this is bloodless. So very clearly the BJP was pitching it as an attack on the rich and for the poor. Again as I said the poor saw this as a government which is for them. It took some time almost two years for that triple down effect to affect the poor as well. By then the Modi government had worked out a system of handouts to keep them at that subsistence level so that the inroads that made politically through demonetization could be sustained for a longer period. And this method continues even now where the poorest are given basic handouts, very little money just enough to sustain themselves at their income level without any new jobs, without any economic opportunities and they feel gratified, they feel grateful that they're getting this and that is the way in which the BJP's economic policies which have disastrous for the overall economy still managed to win votes. That's the show today. Keep watching, news click and do subscribe to us, go to our website see there are various subscription options which is going to help us sustain this kind of journalism. Thank you for watching.