Politics of Demonetization: Its effect on the Village Economy in India

Abstract

The Government of India` s call for demonetization on 8th November 2016 banning Rs500/-and Rs1000/- notes was originally accepted as a positive step to discourage the black marketers and the rackets in hoarding to rule over the society. Unfortunately the long term effect of such a hurried decision became a boom to the agri-business based on soft cash. The agribusiness chain became the worst effected group. The chain included non-formal agricultural sector small earners in the agricultural field the farmers as the fragmented land holder and the producers thriving on the instant sale of their products and also those depending on middleman for the disbursement of funds and purchase of products for storage and dispersal of the same to the consumers` market for constant supply. Demonetization discouraged the middleman to put cash in the producing and disbursement. Thereby demonetization dismantled the overall economic chain of production and distribution resulting havoc in agro business market. The small farmers became the main victims of the circumstances. The banning of money economy on the one hand created scarcity in the families based on ancillary agro-production and it also hampered the family income of the rural farmers. Considering the boom in the village economy as an outcome of demonetization the present article makes an effort to gather firsthand information on the position of rural farmers and other non-formal rural occupation group as an outcome of demonetization announced by the Prime Minister of India. The focused area of the study include the selected villages in the northern part of West Bengal. They are rich in agro-based products run by the self-contended but marginal women farmers group thriving on export of their products to the Nepal Market. Their family males are involved in other ancillary employment like pendal making for marriages and other social gatherings running grocery shops and hawkers selling garments and cloths. The women in their families are involved in the varieties of occupation like working as Anganwari preparing mid-day mill working in the road side motels run by the Government (Pother Sathi ) and also working as a liaison of the Government Agriculture Department of the District through their Farmers` Club. The region marked as the second best agro-production area in West Bengal but their business thrives on cash transaction. Keeping in mind the PM`s speech on November 8th 2016 as a pro-poor program the present study focuses on the effect of demonetization on the poor women farmers by reaching out to the farmers families.The survey was done on December 2017 to observe the post demonetization effect in the reality scenario. Interestingly a similar survey was carried out by the researcher in 2015- 2016 and the field survey report was presented in the form of a research paper entitled ` the Role of Women in Agriculture ` in University of Vienna Austria under the International Sociological Forum in July 2016.This has enabled the researcher to gather knowledge on the economy of women community in the rural areas of North Bengal and a part of the West Bengal State. The life and living of these enthusiastic women community gave an impetus to the researcher to visit them and to learn the effect of demonetization in their life.2 The present paper is the outcome of the survey made by the researcher for the second phase in December 2017 during the post demonetization period.