While demonetisation has impacted the entire population in the country, Muslims are not particularly perturbed by it. They may be facing as tough times as others, but the community that makes more than 15 percent of the Indian population is not really complaining.
The demonetisation that was announced on November 8 by Indian Prime Minister Narendra Modi abolishing Rs 1000 and Rs 500 currency notes the same day came as huge surprise to 1.3 billion Indians. It came as a bolt from blue, not just surprising the whole nation, but also forcing the entire population to search for ATMs and bank branches to change the banned notes.
The high value notes, abolished by the Indian government on November 8, hit the people so hard due to the fact that the Rs 1000 and Rs 500 notes made 86 percent of the whole currency in circulation. The abolition meant that almost entire country became cashless.
The consequences of the notebandi, notwithstanding the brave face that the government is putting, have been adverse even in the short term. In the long term, economists suggest, the consequences may be fatal for the $2.25 trillion economy.
Labourers are retreating back to their villages in Bihar and West Bengal from states like Punjab, Haryana, New Delhi NCR besides Maharashtra and Gujarat. The long queues outside banks and ATM remain as long as they were immediately after the demonetisation announcement.
Ramesh Thakur of Crawford School of Public Policy, Australian National University, while writing in Japan Times says: “The move also confuses the black with the informal economy by conflating cash with black money. Demonetisation has the potential to permanently damage the latter, which comprises 45 percent of GDP and 80 percent of the workforce. Its main motor is the desire to escape the crushing burden of state taxes, regulations and bureaucracy. India’s formal and informal economies are not quarantined from each other, but form a seamless value chain. For example, almost one-third of the working capital of small businesses comes from the black economy. Can that lost capital be replenished with fresh credit?”
While the whole nation has been complaining about the notebandi, the 200 million strong Muslim community doesn’t seem very perturbed by it. While they may be part of the serpentine queues outside the banks and ATMs across the country, they are not unduly troubled by the whole exercise.
This is due to fact that Indian Muslims are economically among the most deprived sections of the population in the country. A large part of the Indian Muslim community lives outside the formal economy, in absolute poverty and deprivation.
Official surveys and data suggest the Muslims have the lowest living standard in the country on a per capita basis. A report by the National Sample Survey Organization (NSSO) suggests that Indian Muslims on an average spend merely 32.7 Rupees (less than half US$) per day.
The NSSO report while highlighting the extreme poverty among the Indian Muslims says, “At all-India level, the average monthly per capita expenditure (MPCE) of a Sikh household was Rs. 1,659 while that for a Muslim household was Rs. 980 in 2009-10”. The report titled “Employment and Unemployment Situation Among Major Religious Groups in India” was released in the year 2013.
MPCE actually reflects the living standard of a family and therefore lays bare the deprivation and economic exclusion of the Muslim community. The same report says that the average MPCE for Hindus and Christians stood as Rs. 1,125 and Rs. 1,543 during the same period.
There is no marked difference in the economic condition of Muslims, be it urban or rural area. Muslims MPCE in rural areas was Rs. 833, compared to Rs. 888 for Hindus, Rs 1,296 for Christians and Rs 1,498 for Sikhs. If the difference between Muslims and other religious communities was big in rural areas, in urban areas the difference was even bigger. The NSSO report adds that Muslim MPCE was merely Rs. 1,272 while it was Rs. 1,797 for Hindus, Rs 2,053 for Christians and Rs. 2,180 for Sikhs.
Muslims’ ratio in formal economy is abysmally low. A report by Government’s High Level Committee on Social, Economic and educational status of the Muslim Community of India says there is very low participation of Muslims in salaried jobs.
The report known as Sachar Committee Report says, “As employees, Muslims generally work as casual labourers. The participation of Muslim workers in salaried jobs (both in the public and private sectors) is quite low. In the aggregate while 25 percent of Hindu UC workers are engaged in regular jobs, only about 13 percent of Muslim workers are engaged in such jobs…Less than 8 percent of Muslim workers in urban areas are employed in the formal sector as compared to the national average of 21 percent”.
The economic deprivation of the Muslims in the country may be the reason behind the fact that while protests have been organised against demonetisation in many parts of the country, Muslims have been largely out of such protests.
Urdu media, that usually highlights the deprivation of the Muslims in the country, has largely remained silent on the issue, despite covering the general protests and dissenting voices from general population.