IN recent times, the prime minister of India has repeatedly termed the critics of demonetisation as backers of black money who work against the nation. The argument implies that all those who have cash income, even though legally acquired, are offenders who would have escaped had the government given more time to them to ‘prepare’. This aggressive campaign of the government has one fundamental flaw: it assumes that the only losers from the demonetization are the money hoarders not the mass of the labouring poor whose entire survival depends on wages paid in cash. This is especially true of the workers in informal employment who constitute over 80 percent of the workforce. Of this about 42 percent of the workforce in non-agricultural work can be categorised as ‘home-based workers’ who work on piece-rated work from their houses and are integrated into the labour markets through sub-contracting systems which are largely cash-based. Hence it is important to understand the implication of demonetisation on their lives and livelihoods.

HOMEBASED WORKERS AND

THE CIRCUITS OF SURVIVAL

In 2012, there were 37.50 million home-based workers in India of which 16.04 million workers were women. Between 2000 and 2012 almost half a million home-based workers were added to the workforce, comprising more than one third of the non-agricultural employment which was largely concentrated in three industries: beedi, textiles and apparel manufacturing. A survey of these women workers by the CITU in 2013 showed that more than 60 percent of the 3300 workers surveyed were dependent on weekly and daily payments of wages to meet their immediate needs. This is largely because of low wages and levels of income with more than 40 percent of the workers earning between Rs 50 and Rs 500 per month and about 75 percent of the workers earn less than Rs 1000 per month.

These findings are confirmed and augmented by the labour bureau survey of the application of the Minimum Wages Act in Madhya Pradesh (2015). The surveyors covered seventeen districts and showed that more than 80 percent of the workers were home-based beedi rollers who made an average of about Rs 68 per day for rolling at least 5600 beedis. About 87 percent of the beedi rollers are on piece rated systems of payment and hence wholly cash dependent. The cash is largely paid on a weekly basis through the contractor or the sattedaar who directly controls the supply of raw material, credit and wage payment. The dependence on the sattedar is further structured by the fact this is perhaps the only channel for taking debts in times of emergencies. Thus the cycle of cash payments which the sattedar makes are critical to the survival of home-based workers.

The third aspect of the survival of home-based workers is regular work from the export market through the contractor. The CITU all India survey of 2013 and the SEWA survey of 2014 in Ahmadabad both show that the home-based workers are integrated into global supply chains and produce for export. Further the level of their payments is also done depending on the quality of work that they do and therefore there is no steady or fixed income in home-based work. The same study from Madhya Pradesh, quoted above, shows that contractors giving raw materials to beedi rollers often curtail the supply of thread and yarn so that they could not produce the number of pieces they were required to produce for earning minimum wages. The SEWA study also quotes women saying that the contractor never paid full wages to them and always cut wages in case of delay in meeting his demand, even if they had a legitimate reason like illness. In all these cases, it is amply clear that the situation of the home-based workers is very precarious and dependent on a direct and regular supply of wages in cash.

IMPACT OF

DEMONETISATION

The impact of demonetisation on the daily life of home-based workers has to be seen in this context. The first possible impact is the drying up of work as the regular cash supplies (black money or legal white money) to even the contractors are interrupted by erratic and low levels of supply of money. This factor is confirmed to AIDWA by a group of home-based workers in old Delhi who stated that their work has virtually come to a standstill since the demonetisation drive started. The second possible impact is that the contractors and sub-contractors continue to pay the workers, but in expired and old notes. The women from old Delhi confirm that at the early stages of the demonetisation drive, the contractors paid them in ‘old’ notes which were not easy to exchange. But now that the note exchange is not being done anywhere, the women are being asked to deposit this money in their bank accounts. But most home-based women have no bank accounts. Further if they go to the bank to open an account the bank is now asking them to come back after two months when the time to deposit the old notes will get over. From this it is obvious that women are losing their precious labour time by standing in lines and also facing a severe cash crunch which is needed to meet their daily needs.

Another insight provided by the home-based workers of old Delhi is that they are not the only ones facing difficulties because of demonetisation. Since most of their husbands and family members are also on daily wages they face similar problems in realising their wages. The vulnerability of these households is seen by the fact that a majority of women do home-based work because of poverty or because their husbands are jobless. In this situation an already hand to mouth family situation has been made much worse by demonetisation where the wage-flow is adversely impacted.

We can draw some larger conclusions from the particular context of the home-based workers. The people who are the hardest hit by the demonetisation drive are those who depend on piece rates and daily wages. They not only receive irregular salaries, but also spend precious labour time in ensuring that they get their wages. Further, since contractors operate in a large measure through cash income from big businesses, it is possible that their links with the ultimate buyer of the products made by home-based workers is weakened considerably. Apart from this the demonetisation drive has shown that the penetration of the banks is very limited even in slum areas of Delhi where such workers live. In this situation it is pertinent to ask whether exploitative informal sources of loans are getting strengthened for home-based and other workers like them. If this is the case then the impact of the demonetisation drive will lead to more oppressive circumstances for such workers and will not ameliorate their conditions of work. Thus the rhetoric that demonetisation is pro-poor is nothing but a way of the further oppression of the vulnerable workers by a pro-corporate right wing government.