‘Government claims made as an afterthought’

A section of industry, namely big industry, has been jubilant over the government’s decision to demonetise 500 and 1,000 rupee notes and the drive towards a cashless economy, but it has been largely oblivious to the severe economic hardship imposed on the industrial working class and the unorganised sector. The president of the Centre of Indian Trade Unions (CITU), A.K. Padmanabhan, spoke to Frontline on the fallacy of the idea itself and the unfolding consequences of the decision to demonetise. Excerpts from the interview:

What has been the impact of demonetisation on the industrial working class?

Every section of ordinary working people has been put to difficulties never experienced before. The industrial working class, of which the majority are in the informal sector, have faced the brunt of this attack. There is no work and even the wages prior to November 8 [the day the Prime Minister made the announcement] are being denied. The government has put a hold on the payments to be made. Even those workers who had some savings have not been able to use that money even for emergency requirements. The impact of this action of the government will be very critical in the first two weeks of December as withdrawal of wages will become almost impossible.

The government claims that this move will mop up all the unaccounted wealth in the country? Is there any basis to this claim?

Financial experts in the country and also from many international institutions have said that this is not going to happen. The [fact that] unaccounted wealth is not kept in currency notes is well known. This demonetisation is not going bring out the unaccounted wealth within the country. Everybody knows that the larger part of the hidden wealth is kept outside the country.

With a huge informal sector that employs the largest number of people, how has this step affected work as well as livelihoods?

At least a section of the media has reported in detail how all the industrial centres of the country involved in textile, garments and many other labour-intensive sectors as well as the construction industry came to a standstill within 10 days of the government’s notification. Workers belonging to these sectors, including a huge number of migrant labourers, have been forced out of work.

The government announced that daily-wage workers will benefit once the money goes into their account as this will indicate whether they are getting paid minimum wages or not. Do you see this as a benefit for workers?

We have been on a struggle demanding that workers should be paid minimum wages and all other statutory benefits. Not only that these are being denied, there is no enforcement machinery to oversee all these. Whatever was existing in the form of enforcement machinery has been already dismantled.

If workers will be paid through their banks and records can be properly maintained, it can help them. But does this require demonetisation to ensure payment to workers through banks? Was it necessary that workers are put to such difficulties? How many months will it take to ensure that the millions in the unorganised sector are to have a bank account in a place where they can access it easily?

All these claims seem to be far-fetched and are being made only as an afterthought, following the severe crisis that has been thrust upon workers.

Do you foresee unemployment levels rising as a result of this and other negative social consequences of this decision?

From the reports that are available within this short period, it is doubtless that unemployment levels will rise. With the huge numbers of unemployed and those losing their jobs now, there is going to be a severe crisis in society with long-lasting impact.