Insights on Demonetisation from Rural Tamil Nadu: Understanding Social Networks and Social Protection

NEW paper by Isabelle Guérin, Youna Lanos, Sébastien Michiels, Christophe Jalil Nordman and Govindan Venkatasubramanian, published in Economic and Political Weekly, Vol. 52, Issue No. 52, 30 Dec, 2017.

Queue in front of ATM in Chennai, January 2017
Photo credit: Santosh Kumar.

Drawing on survey data from rural Tamil Nadu, the effects of demonetisation are documented. Serious concerns arise with regard to the achievement of its stated goals. The rural economy was adversely affected in terms of employment, daily financial practices, and social network use for over three months. People came to rely more strongly on their networks to sustain their economic and social activities. Demonetisation has not fought, but has largely  strengthened the informal economy. Demonetisation has also probably further marginalised those without support networks. In a context such as India, where state social protection is weak and governmental schemes are notoriously subject to patronage and clientelistic networks, dense networks of supportive relatives, friends and patrons remain key for safeguarding daily life. With cashless policies gaining currency in various parts of the world, we believe our findings have major implications, seriously questioning their merit, especially among the most marginalised segments of the population.

Download PDF version of the full paper.

Isabelle Guérin (isabelle.guerin@ird.fr) is at the IRD-Cessma  (French National Research Institute for Sustainable Development, Centre d’études en sciences sociales sur les mondes américains africains et asiatiques), Paris, France and is associated with the French Institute of Pondicherry (IFP), India. Youna Lanos (lanosyouna@gmail.com) is a doctoral student at University Paris Dauphine, DIAL (Développement, Institutions et Mondialisation), and is associated with IFP. Sébastien Michiels (sebastien.michiels@ifpindia.org) is at IFP. Christophe Jalil Nordman (nordman@dial.prd.fr) is at the IRD, Paris and is associated with IFP. Govindan Venkatasubramanian (venkat@ifpindia.org) is at IFP.

A group of women complaining to a clerk office that their labour welfare benefits cannot be withdrawn from the bank, January 2016. Photo credit: Santosh Kumar.

This paper follows and explores arguments made in the Special PERSPECTIVES Series on Demonetization in India last year, take a look at Part 1 and Part 2 below: 

The dangerous liaisons between demonetization and the Indian informal economy (Part 1)

The dangerous liaisons between demonetization and the Indian informal economy (Part 2)

Read more about Isabelle Guérin, Santosh Kumar and G Venkatasubramanian's IMTFI-funded research here.