Black money crisis inverts the old order between India’s rich and poor

Amrit Dhillon explores the possible long-term effects of India's cash crisis

Police detain activists of the youth wing of India's main opposition Congress party during a protest against the government's decision to withdraw 500 and 1000 Indian rupee banknotes from circulation.Show more

Is there an equivalent for Schadenfreude in any of India’s 22 official languages? If not, someone needs to coin one right away to describe the wave of pure pleasure at someone else’s misfortune that is coursing through the hearts of India’s poor. It’s a new emotion for them. The rich rule them, dominate and dictate to them.

So it was with a shiver of pleasure that, for the first time, poor Indians saw their government get tough with rich, corrupt Indians over “black money”. This is the widespread practice of taking cash as payment for goods or services, hoarding it and refusing to declare it to the tax authorities. One consequence of this corruption is that only 3 per cent of Indians pay tax.

Black money is a major blot on Indian society. Some corrupt Indians have so much cash that they keep currency counting machines, the kind used by banks, in their homes. On November 8, Narendra Modi declared war on black money and said his government will try to flush out this vast, undeclared wealth by abolishing high denomination bank notes – 500- and 1,000-rupee notes.

Overnight, the wads of notes stuffed inside steel cupboards, under mattresses and inside the storage drawers under beds, will became worthless unless they were deposited in a bank account. There was a catch, though. If anyone deposited more than 250,000 rupees ($3,765), the tax man would go to town with hefty taxes and penalties.

What to do? This was the plaintive cry heard in the living rooms and bedrooms of the rich. All those lovely, crisp, rustling, much-fondled notes rendered useless. Behind their backs, their domestic staff and employees laughed at their predicament. Finally, divine retribution. So often they had asked for a tiny pay rise of 1,000 rupees ($14) and been rejected, though they knew their employer’s cupboards were bursting at the hinges with cash.

Even more amusing was how their employers are turning to them for help. Suddenly their manner has become more humble, polite, almost considerate. That’s because anyone can deposit a sum of 250,000 rupees without any questions being asked. So, wealthy Indians are lining up their domestic staff to ask them to deposit this sum into their accounts, to be returned to them later.

Some are not offering anything in return for this huge favour. Others are offering between 10-25 per cent of the 250,000-rupees as a reward to the driver or maid who agrees to this.

Some employees have agreed. Why not get a lump sum from the misers who usually never open their wallets? Some have refused to go along for fear that they might get into trouble with the tax authorities later. Still others have refused to help out their employers because, for once, they can see the rich and powerful being discomfited and they want to let them squirm. Mr Modi’s message to the poor in a recent speech: “See how I make the powerful suffer with you” resonated strongly with them.

A driver in south Delhi who refused to deposit his employer’s money said: “They’ve enjoyed all that cash for decades. Now they’re having sleepless nights. Let them handle the mess themselves. Why should I lend a hand?”

A cleaning lady laughed out loud when she described how her middle-aged female employer had folded her palms together in an imploring gesture when she asked her to deposit some of her cash. “When I wanted leave to go and see my sick father in the village, she refused. My father died without my seeing him. Why should I feel compassion for her?” she said.

Even vegetable and fruit traders, who push their carts through rich neighbourhoods, are having a field day. Never have they been so popular with their wealthy customers who, instead of dispatching the maid to buy produce, have come out themselves to greet them warmly by name.

After the greetings, this is the request: deposit some of our cash in your account and, when it has become legal tender, return it to us. Or it is this: let me pay in advance for a whole year for the fruit and vegetables I will buy. In short, anything to exchange the cash rotting in their homes for something useful.

Chemists have reported customers getting rid of their expired notes by buying enough medicines to last a year. There has been a spike in the sale of sleeping tablets.

Mumbai hospitals have reported a surge in panic attacks. Mind you, doctors are feeling petty queasy themselves.

It’s estimated that about 40 per cent of doctors are paid in cash. They too have to find ways of turning their useless notes into legal tender.

The normal order has been thrown upside down. Instead of the poor and downtrodden feeling anxious, it’s the rich and powerful. This just desert is proving to be delicious.

Amrit Dhillon is a freelance journalist in New Delhi