ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Isabelle GuérinSubscribe to Isabelle Guérin

Insights on Demonetisation from Rural Tamil Nadu

Drawing on survey data from rural Tamil Nadu, the effects of demonetisation are documented. Serious concerns arise with regard to the achievement of its stated goals. The rural economy was adversely affected in terms of employment, daily financial practices, and social network use for over three months. People came to rely more strongly on their networks to sustain their economic and social activities. Demonetisation has probably further marginalised those without support networks. In a context such as India, where state social protection is weak and governmental schemes are notoriously subject to patronage and clientelistic networks, dense networks of supportive relatives, friends and patrons remain key for safeguarding daily life. With cashless policies gaining currency in various parts of the world, we believe our findings have major implications, seriously questioning their merit, especially among the most marginalised segments of the population.

Debt Bondage and the Tricks of Capital

Migrant labourers, free from rural bondage, are now bonded to other sources of debt, contracted from the agro-industry or construction sectors. The flows of migration in the brick-making and sugar cane sectors in Tamil Nadu, where bondage coexists with many public welfare schemes, illustrate the persistence and renewal of this phenomenon. The welfare schemes play the role of a safety net, but also contribute to low wages, and impunity on the part of employers. Alliances between capital and the state, through the politicisation of employers, are instrumental in the continuation of all forms of labour exploitation. When workers resist, employers tighten working conditions and start recruiting migrants from North India. And even if these forms of labour management obey a capitalist logic, they are inseparable from the caste hierarchy.
Back to Top