The war against the parallel economy in India has taken a new turn with the momentous decision of the Indian government of banning Rs 500 and Rs 1000 notes. While the path-breaking move of Prime Minister Narendra Modi is not the panacea for all evils (nothing can be!), it definitely seems to be one of the most decisive beginnings ever made. It signals a tectonic shift in the country’s monetary and fiscal path.
Even as the full ramifications of the decision unfold over the next months, there is going to be short term pain for many – the poor, the elderly, the illiterate, the rural folks, the small farmers, traders, et al – ordinary Indian citizens who cannot be found at fault for the creation of this black money. If you are reading this, you are probably better placed than most of them to tide over this temporary crisis. We have tried to put together a guide of quick and immensely doable steps that you can take to help the community – people around you – the elderly, your domestic help, your office staff, your society staff, drivers, security guards – people you know and trust and those who help you all the time. This is our chance to help and support them. They come first – most of us can afford to stay calm and not rush to deposit the money stashed as emergency cash in our homes. I am sure, the banks can do without that cash for a few days more – they are already going all out to restore normalcy.
We have divided the measures that we can possibly take into two time frames – short-term and medium term.
Short Term Measures (10-15 days)
-Part with extra change if we have it and try to survive without it.
-Educate and explain: There are people who may not understand what is happening. You can provide them with information and answer their queries. However, you should be short and simple since no one knows everything and by providing wrong information, things would become more complicated. You should also warn them against various fraudulent schemes that have mushroomed across. There is simply no need to convert one’s hard earned cash to gold at a premium or use temples, trusts, NGOs among others to get new currency.
-Help the people around you in understanding the process of depositing cash or exchanging their currency. Facilitate it if you can.
-Your help or others you know may have an emergency for which they have no cash – you can use your digital wallets or cards to pay their electricity bills, recharge their phones, buy or order groceries and medicines. The ticket sizes are usually tiny and no tax-man will come after us because we used our credit card to recharge a couple of extra mobiles for small denominations.
-Many of them may have bank accounts and linked ATM or debit cards, (all Jan Dhan account holders gets a RuPay debit card) which they have never used or do not know how to use. Demonstrate how to use these cards but please do tell them the dos and don’ts lest one may end up facilitating fraud.
Medium Term Measures
Education and financial inclusion are among the most important ways of long term empowerment.
-Help your domestic help in opening Jan Dhan accounts if they don’t have one already. Remember that they may hesitate in walking into a branch to get one or may have queries which need to be answered.
-It is not enough to have an account – financial inclusion in the true sense of the term can happen only when people understand the usage and benefits of having an account, are cognizant of how to protect their confidential information and operate that account. We can support each of these.
-Mobile penetration in India is growing at a rapid rate and is a tool for financial inclusion. There are many enablers that each person can use depending on their comfort levels including the National Unified USSD Platform (NUUP) and digital wallets among others. We can guide people we know through that process.
-Life and medical insurance are critical components of empowerment. There are government schemes which can be availed as soon as one has a bank account and the private players also have some affordable options. We can assist people in choosing what works for them with adequate research and with the help of certified financial consultants.
However, we need to make sure that before educating others, we are educated ourselves and that we do not ask anyone to dispense with ATM pins/passwords or other information that is confidential and can be misused.
The list given above is indicative only. Each one of us can use this opportunity to come up with our own ways and means of supporting the community and supporting financial inclusion. If we are unsure of how to help, we can ask for help too.
Retired banker Namita Lahkar and her former colleague decided to help the Narengi Tiniali Branch after witnessing the chaos. They saw that the cashier and the branch manager were having a hard time and therefore, decided to use their long experience in the banking sector to help them out.
The author has held leadership positions at the Tata Group (TAS), Citibank and Network18. She is now an independent business and strategy consultant and mentors startups.